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of a secured party’s security interest in collateral is dependent
on the time of filing a financing statement in relation to the
filing of other secured interests. See generally Cal. Com. Code
secs. 9302, 9312, 9105(m), 9401 (West 1990).10 The purpose of a
financing statement is to inform existing or prospective
creditors of the extent to which an existing or prospective
debtor has encumbered assets. Borg-Warner Acceptance Corp. v.
Bank of Marin, 111 Cal. Rptr. 361 (Ct. App. 1973).
Petitioners and their corporations have engaged in a series
of transactions prior to defaulting on several loans. The
vending machines owned by petitioners’ corporations were the
security for the loans. Petitioners and the financial
institutions entered into settlement agreements in which the
security interests were assigned from the lenders to
petitioners.11
10 California law provides that a financing statement is a
document which satisfies the requirements of Cal. Com. Code sec.
9402(1) (West 1990). This section provides:
A financing statement is sufficient if it gives the
names of the debtor and the secured party, is signed by
the debtor, gives an address of the secured party from
which information concerning the security interest may
be obtained, gives a mailing address of the debtor, and
contains a statement indicating the types, or
describing the items, of collateral. * * *
11 In the settlement with NBSC and petitioners, the security
interests were assigned from NBSC to Hollis Bowden, who in turn
assigned them to Mrs. Bowden. In some of the settlement
(continued...)
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