Grant bought a washer from Frank's Appliances on an installment contract under which he promised to pay in 12 monthly installments. Unde the express terms of the contract, Frank's Appliances retained a security interest inthe washer. Frank's did not file a UCC-1. Six months later, Grant filed a chapter 7 bankruptcy petition. Can the bankruptcy trustee set aside Frank's Appliances' security interest in the washer?
1. Yes, Frank's Appliances had an unperfected security interest in the washer which a lien creditor could take priority over.
2. No, a bankruptcy trustee cannot set aside a valid security agreement.
3. Yes, because Frank's failed to file a UCC-1 to put the bankruptcy trustee on notice as to its interest in the property.
4. The answer depends on Grant's use of the washer.