Question

First Financial Corporation is a secured party with a security interest in property owned by Retail Sales Company. Perfection of this security interest may not protect First Financial against the claim of:___________.a. a bank.b. a buyer in the ordinary course of business.c. a subsequent lien creditor.d. a trustee in bankruptcy.

Answer 1

d. a trustee in bankruptcy.

Step-by-step explanation:

Generally secured creditors are the first creditors to be paid, but there are some expenses that need to be paid before any creditor actually receives any money. Bankruptcy expenses, e.g. lawyers, accountants, court, and the trustee. After the bankruptcy costs are paid, then the money is distributed among creditors. First Financial Corporation would be included in the list of creditors to be paid first.