Which statement is true regarding PMSI in inventory collateral?

The correct assertion about Purchase Money Security Interests (PMSIs) in inventory collateral is that it requires notification of existing secured creditors. This requirement stems from the UCC provisions that govern PMSIs. When a creditor provides financing to a debtor to acquire inventory, the PMSI allows the creditor to have a priority claim over that inventory, but to attain that priority against existing secured creditors, the PMSI holder must notify those creditors. This notification ensures that all secured parties are aware of the new security interest, thus protecting the rights of existing creditors and maintaining the integrity of the secured transactions framework.

This is particularly important since the priority of secured interests is crucial in collateral situations, and the failure to notify may result in a loss of priority.

In contrast, the other statements do not hold true in the context of PMSIs. While a PMSI might have special priority rights, it is not inherently preferred over all secured transactions by default without the required conditions. The perfection of a PMSI in inventory must occur before the debtor takes possession of the inventory, not after, which distinguishes it from the general rules applicable to other types of security interests. Moreover, a PMSI can apply to future inventory acquisitions if the financing structure and notification requirements are appropriately managed.