Introduction

Abstract A creditor that holds a security interest over its debtor’s assets enjoys considerable ad- vantages over those creditors of the debtor that do not. Foremost amongst these advantages is the preferential status or ‘priority position’ conferred by the security interest on the creditor’s claim against the debtor. Thus, on the default or insolvency of the debtor, the secured creditor is entitled to have its claim met in full, out of the assets encompassed by the security interest, ahead of the debtor’s unsecured creditors.