Lewiston State Bank v. Greenline Equipment, L.L.C., 147 P.3d 951 (Ct. App. Utah 2006), involved the issue of whether a creditor had refinanced an obligation, which was part of the court’s determination of whether the creditor held a purchase-money security interest (PMSI) in the collateral. Professor of Law Ingrid Michelsen Hillinger discusses the Lewiston case and suggested paths for creditors wishing to retain a PMSI when refinancing. Professor Hillinger writes:

A refinancing does not occur if a new creditor pays off a purchase-money obligation and does not take an assignment of original creditor’s PMSI. The court’s holding identifies a clear path for creditors wishing to retain a PMSI. If they are the original creditor, a refinancing will not destroy their PMSI. If they are a new creditor, they need to take an assignment of the PMSI from the PMSI creditor.

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