Link is in the giant killing business. Link grants a security interest in “all swords now held or hereafter acquired” to Zelda in May 2010. Zelda makes a proper filing on this collateral at the time. On June 2, 2011, a sword catches Link’s eye at a street vendor’s shop. The vendor sells the sword to Link on credit, as he is short on cash. Link gives the vendor a check for a portion of the price of the sword, and signs a note detailing the payment plan of monthly installments. Link also signs a security agreement granting a security interest in the sword to the vendor. Link files for bankruptcy on June 18, 2011. The vendor files a financing statement on June 19, 2011. Which of the following is true regarding the priority of each party’s interest?
1. Zelda has first priority, the vendor has second priority, and the bankruptcy trustee has third priority.
2. The bankruptcy trustee has first priority, the vendor has second priority, and Zelda has third priority.
3. The vendor has first priority, Zelda has second priority, and the bankruptcy trustee has third priority.
4. None of the above.