{"data":{"id":"us-ky/krs-355.9-330","jurisdiction":"us-ky","citation":"KRS 355.9-330","heading":"Priority of purchaser of chattel paper or instrument.","body":"(1) A purchaser of chattel paper has priority over a security interest in the chattel paper\nwhich is claimed merely as proceeds of inventory subject to a security interest if:\n(a) In good faith and in the ordinary course of the purchaser's business, the\npurchaser gives new value, takes possession of each authoritative tangible\ncopy of the record evidencing the chattel paper, and obtains control under\nKRS 355.9-105 of each authoritative electronic copy of the record evidencing\nthe chattel paper; and\n(b) The authoritative copies of the record evidencing the chattel paper do not\nindicate that the chattel paper has been assigned to an identified assignee other\nthan the purchaser.\n(2) A purchaser of chattel paper has priority over a security interest in the chattel paper\nwhich is claimed other than merely as proceeds of inventory subject to a security\ninterest if the purchaser gives new value, takes possession of each authoritative\ntangible copy of the record evidencing the chattel paper, and obtains control under\nKRS 355.9-105 of each authoritative electronic copy of the record evidencing the\nchattel paper in good faith, in the ordinary course of the purchaser's business, and\nwithout knowledge that the purchase violates the rights of the secured party.\n(3) Except as otherwise provided in KRS 355.9 -327, a purchaser having priority in\nchattel paper under subsection (1) or (2) of this section also has priority in proceeds\nof the chattel paper to the extent that:\n(a) KRS 355.9-322 provides for priority in the proceeds; or\n(b) The proceeds consist of the specific goods covered by the chattel paper or\ncash proceeds of the specific goods, even if the purchaser's security interest in\nthe proceeds is unperfected.\n(4) Except as otherwise provided in KRS 355.9 -331(1), a purchaser of an instrument\nhas priority over a security interest in the instrument perfected by a method other\nthan possession if the purchaser gives value and takes possession of the in strument\nin good faith and without knowledge that the purchase violates the rights of the\nsecured party.\n(5) For purposes of subsections (1) and (2) of this section, the holder of a purchase -\nmoney security interest in inventory gives new value for chattel paper constituting\nproceeds of the inventory.\n(6) For purposes of subsections (2) and (4) of this section, if the authoritative copies of\nthe record evidencing chattel paper or an instrument indicate that the chattel paper\nor instrument has been assigned t o an identified secured party other than the\npurchaser, a purchaser of the chattel paper or instrument has knowledge that the\npurchase violates the rights of the secured party.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55695","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:48Z","sha256":"1262fac2cdd485d1998f816f427525b6501804ec87d71d7e7b3a0bfa23f304ae","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.9-329","next":"us-ky/krs-355.9-331"},"notice":"GroundRules: Original legal text. Not legal advice."}