Problem
Recently, Guy Bailey recently opened a one-person consulting firm which he owns and operates and is doing business as Valley Consultants. The business was blessed with some initial success and Bailey decides to go on a shopping spree. First, he buys a state-of-the-art Bose surround-sound audio system for his home from Texas Sound and Electronics. Next, he buys a Trek Fuel Ex 9.9 mountain bike and Rhino Rack from Bicycle World. Later he purchases a brand-new BMW 428i from the local BMW dealer. Finally, he goes back to Texas Sound and Electronics and buys a high-end iMac desktop with a color printer/scanner and lots of bells and whistles. Each of these items was purchased under installment sales contracts. Alas, all good things must come to an end. After the initial hot start, things slowed down for the consulting business, Bailey was unable to make any of the required monthly payments, and defaulted on all of the loans within a year of purchase.
I. For which of the purchases would the creditor need to file a UCC financing statement to perfect its security interest?
II. Assume that all of the purchases were made in the name of the company. What would bebathe consequences, if any, if Texas Sound and Electronics filed a financing statement that listed the purchaser's name as Valley Consultants?
III. Which of the purchases, if any, would qualify as a PMSI in consumer goods?
IV. Suppose that after Texas Sound and Electronics repossessed the sound system, it decided to keep it rather than sell it. Can it do this under Article 9 of the UCC? Why or why not?