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United States V Quality Stores, Inc 572 U S Form

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the united states often acquires security interests for debts owed to it sometimes federal law doesn't specify the priority of the government's security interest meaning the courts need some rule of priority the supreme court faced this problem in united states versus kimball foods okay supermarkets borrowed from kimball foods giving security interests in ok's equipment and merchandise for present and future advances the following year ok borrowed from a bank giving a security interest in the same collateral the small business administration or sba guaranteed 90 percent of that balance ok used this loan to pay off kimball later ok incurred more debt to kimball on which it defaulted ok also defaulted on the sba guaranteed loan the sba took assignment of the security interest and paid its guarantee with creditors approval ok sold its equipment and escrowed the proceeds pending resolution of competing claims to the money having prevailed in state court kimball sued

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