Lauren is an artist and is a bit starved for cash. Sloane, an old coworker of Lauren’s, has some extra cash from her gardening business, and decides to make Lauren a personal loan. Sloane doesn’t normally loan out money but decides to make an exception for Lauren. Sloane loans Lauren $5,000, but in exchange takes a security interest in all of Lauren’s consumer goods, including after-acquired. Sloane and Lauren sign a security agreement on May 5th. Sloan gives Lauren the loan money on May 5th, and perfects this interest by filing a financing statement on May 10th. The financing statement also lists Sloane as having a security interest in Lauren’s consumer goods, including those after-acquired.

In December, Lauren ends up defaulting on her loan. She spent all of her income on presents! At the time of Lauren’s default, Lauren owns four particular items: a TV she bought in January, a sofa she bought May 12th, a mini-fridge she bought May 18th, and a lawn mower she bought September 20th.

Assuming no other party has superior rights to Sloane in Lauren’s consumer goods, what can Sloane repossess?

1) Sloane can only repossess the sofa or the mini-fridge, but only if she took a purchase-money security interest in either item. She cannot repossess the TV or the lawn mower.

2) Sloane can repossess the TV, the sofa, and the mini-fridge, but not the lawnmower.

3) Sloane can repossess the TV and the sofa, but not the mini-fridge or the lawnmower.

4) Sloane can only repossess the TV.