Debtor (a corporation) borrowed $2 million from 1Bank, which perfected an enforceable security interest in Debtor's only asset worth $5 million if unencumbered by any liens or security interests. Two months later, Debtor borrowed $1,250,000 from 2Bank, which failed to perfect its enforceable security interest in the asset. Six months later, Debtor borrowed $1,750,000 from 3Bank, which perfected an enforceable security interest in the asset. One year later, Debtor borrowed $575,000 from 4Bank on an unsecured note. Six months later, Debtor borrowed $275,000 from 5Bank, which perfected an enforceable security interest in the asset. Two years later, the asset declined in value and Debtor defaulted on all loans. At the time of default, the asset was worth $3.25 million. At default, Debtor owed $1,250,000 to 1Bank, $950,000 to 2Bank, $525,000 to 3Bank, $475,000 to 4Bank, and $225,000 to 5Bank.

If 1Bank, properly following the requirements of UCC Article 9, holds a sale of the asset at/near the time of default, how is the $3.25 million in proceeds allocated amongst the parties?