On June 1, Cody granted Ben’s Bank a security interest in “all inventory, now owned and after-acquired.”  Ben’s Bank promptly filed a UCC-1 covering the inventory.  On July 1, Cody granted a purchase-money security interest to Conor’s Financing to finance the purchase of new inventory.  On the same day, this purchase-money security interest is perfected by filing, and Conor’s Financing provided Ben’s Bank with an written letter in which it advised Ben's Bank that it was taking a purchase-money security interest in particular inventory (which was described in the letter).  Cody took shipment of the new inventory two weeks later. 

The new inventory is subsequently sold by Cody to his customers on open account, all of whom agreed to pay for it in 30 days. In a dispute between Ben's Bank and Conor's Financing over who has priority in these accounts, who prevails and why?

1. Conor’s Financing, because it complied with the requirements of § 9-324(b) and thus had priority as to the inventory.

2. Ben’s Bank, because it was the first-to-file-or-perfect; while Conor's Financing complied with § 9-324(b), its priority did not extend to accounts received as proceeds of the inventory.

3. Ben’s Bank, because it was the first to file or perfect, and Conor’s Financing did not comply with the requirements of § 9-324(b).

4. Conor’s Financing, because a perfected purchase-money security interest alwas has priority over a conflicting security interest in the same collateral.