Shonda Mowers Ltd has supplied Glebe Gardens Pty Ltd with lawn mowers for them to resell in their retail stores. Shonda has registered a security interest in the goods, to protect their rights.

Glebe Gardens has also granted a security interest to Great Big Bank Ltd, as part of a $4 million loan. When established, the security interest was drawn up to include present and future assets of Glebe Gardens. Additionally Glebe Gardens borrows $400,000 each month from Mid Bank Ltd, to provide cashflows and finance inventory purchases. This financing arrangement also includes a security interest.

Required:

Assume Glebe Gardens encounters difficulty paying their debts, and becomes insolvent.

• Which 'secured' lender/creditor outranks the others, and why?
• Who gets paid first, if Glebe Gardens is liquidated?
• How are the various security interests ordered and/or dealt with?