This is a three-hour examination. It consists of two questions. Each question will be given equal weight when calculating the final grade for the course. Allocate your time accordingly.

This is an open book examination. During the examination you may consult any written materials except materials checked out of the law library.

Assume that the 1995 official text of the Uniform Commercial Code is in force in all relevant jurisdictions unless you are otherwise expressly directed. Where the text sets out alternate provisions (e.g.,  9-401(1)), assume that the second alternative is in force.

Read each question carefully. Organize your answer before you begin to write and emphasize those points you think are most significant. If you find an ambiguity or if you need more facts, make reasonable assumptions and state these clearly in your answer. Be concise. Be clear. Good luck!

This problem involves the following persons:

 Apex Printing Company ("Apex"): a partnership created under Texas law that operates a printing business in Dallas, Texas.

 American Business Corporation ("ABM"): a Delaware corporation with its headquarters and principal place of business in Pittsburgh, Philadelphia. ABM manufactures heavy equipment, including printing presses.

 Dallas Finance Company ("Finance Company"): a finance company incorporated under Texas law that operates in Texas. Among other things, the finance company is engaged in the business of brokering personal property leases.

 Steady State Bank ("Bank"): a bank created under Texas law that operates in Texas.

In January Apex enters into a contract to purchase a printing press from ABM for a price of $950,000. It is understood that ABM would not deliver the press until Apex has arranged for financing.

On February 5 Apex assigns its rights under the ABM contract to Finance Company. At the same time Finance Company agrees to lease the printing press to Apex for 20 years, the projected useful life of the press. Finance Company also agrees that, at the end of the 20 years, Apex will have the option to purchase the press for its then market value. Finance Company retains possession of the lease agreement.

One week later Finance Company borrows $600,000 from Bank for the purpose of making the down payment on the purchase price of the press. Finance Company signs a promissory note and a security agreement granting to Bank a security interest in the press and in the lease payments to be made by Apex. On February 21, Bank files a financing statement with the Texas Secretary of State listing itself as secured party and Finance Company as debtor, giving their addresses, and describing the collateral as "printing press, personal property leases, and lease payments."

Upon payment of $600,000 from Finance Company, ABM agrees to deliver the press if Finance Company signs a promissory note for the remaining purchase price ($350,000) and a security agreement granting ABM a security interest in the press to secure payment of the note. Finance Company does so on February 26. The following day ABM delivers the press to Apex in Dallas from ABM's plant in Pennsylvania. On March 10, ABM files a financing statement with the Texas Secretary of State listing itself as secured party and Finance Company as debtor, giving their addresses, and describing the collateral as "printing press."

On August 1 Apex fails to make its monthly lease payment to Finance Company. After negotiations with Apex, Finance Company repossesses the printing press on August 21.

(A) Assume Bank consults you on August 28. It asks you to advise it on the status and relative priority of its interest in the printing press, personal property leases, and lease payments. Advise it.

(B) Assume Bank consults you on September 28. Bank informs you that Apex filed for reorganization under Chapter 11 of the Bankruptcy Code on September 17. What changes, if any, would you make to your answer to part A of this problem?

On November 1, 1995 Brideshead Fuel Oil Company ("Old Brideshead") sold all the assets of its fuel oil business to Texas Venture Capital, Inc. ("TVC"). The purchase terms required TVC to make a down payment of sixty percent of the purchase price and to sign a promissory note for the remainder of the purchase price. The note was payable to the order of Old Brideshead and was payable in full on November 1, 1996. To secure payment of the note, TVC signed a written security agreement granting Brideshead a security interest in the purchased inventory of fuel oil, equipment, fixtures, and accounts. TVC also signed a financing statement naming TVC as debtor, Brideshead Fuel Oil Company as secured party, and giving their addresses. The financing statement listed the collateral as "inventory, equipment, fixtures, accounts, and general intangibles."

Old Brideshead and TVC executed the sales contract, note, security agreement, and financing statement on November 1. On the same day TVC gave Old Brideshead a cashiers' check in the amount of the agreed down payment. Old Brideshead filed the financing statement on November 8 with the Secretary of State.

The November 1 written sales agreement included, inter alia, two additional terms.

 It authorized TVC to use "Brideshead" as a trade name and prohibited Old Brideshead from using the name in the future.

 Old Brideshead agreed to subordinate its security interest to any security interest TVC should grant to another creditor in order to secure additional financing of the purchase of the Old Brideshead assets. If TVC did obtain such financing, TVC agreed to deliver to Old Brideshead a statement on TVC letterhead outlining the terms of this financing. On receipt of this statement, Old Brideshead undertook to file a UCC-3 termination statement and a new UCC-1 financing statement. The parties understood that this arrangement would carry out Old Brideshead's agreement to subordinate its interest under these circumstances.

On November 25, 1995 Dallas Finance Company agreed to lend to TVC an amount of money equal to the down payment that TVC had made to Old Brideshead. On that date TVC executed a promissory note payable to the finance company and signed a written security agreement granting the finance company a security interest in all the assets purchased from Old Brideshead.

On December 1, 1995 TVC changed its corporate name to Brideshead Petroleum Company ("New Brideshead").

On December 3, 1995 Dallas Finance Company filed a financing statement listing itself as secured party and Brideshead Petroleum Company as debtor, giving their addresses, and describing the collateral as "inventory, equipment, fixtures, and accounts."

At no time did TVC inform Old Brideshead of its change in its corporate name or of the new financing from Dallas Finance Company. Old Brideshead did not amend the existing UCC-1 financing statement to reflect the change in name of TVC. Nor did Old Brideshead file a UCC-3 termination statement or a new UCC-1 financing statement.

On September 1, 1996 New Brideshead defaulted on an installment payment due Dallas Finance Company. With the approval of the finance company, New Brideshead sold some equipment to the Petroleum Exploration Company and turned over the proceeds to Dallas Finance Company on September 15.

On October 1, 1996 New Brideshead again defaulted on an installment payment to the finance company. After unsuccessful consultations with New Brideshead, the finance company declared New Brideshead in default.

On October 18, 1996 New Brideshead turned over to the finance company the assets covered by its security agreement.

Without further notice to New Brideshead, the finance company sold approximately one half the assets in a private sale to Petroleum Exploration Company on October 28, 1996. After applying the proceeds of this sale to the amount owed by New Brideshead to the finance company and to the expenses incurred by the finance company on repossessing and disposing of the assets, there was a deficiency of $200,000.

On November 1, 1996 New Brideshead defaulted on the note payable to Old Brideshead. Old Brideshead then learned of the repossession and disposition of New Brideshead's assets. On November 6, 1996 Old Brideshead sent a letter to Dallas Finance Company requesting that company to turn over to Old Brideshead (1) the repossessed assets still held by the finance company, and (2) the proceeds of both the September 15 and October 28 sale of assets.

The president of New Brideshead promptly consults you as her attorney. She asks you what rights and obligations New Brideshead has. Advise her.