the question about Secured Transaction in united state.

Arthur is in immediate need of cash. Arthur was involved with an accident where the other party was at fault. Arthur has a pending suit against the other party. The suit has been filed. Arthur goes to a finance company and the finance company agrees to lend Arthur $10,000.00 and to use the suit as collateral. They prepare a financial statement containing all the relevant information. However, the finance company does not file the financial statement with the Recorders Office. Arthur then goes to another finance company and the second finance company using the same suit loans Arthur $20,000.00. Furthermore, the second finance company states in the financial statement that “any property purchased by Arthur with said funds shall be used as collateral to satisfy the loan. Arthur purchases a new car with the funds. The second finance company files the financial statement with the Recorder’s Office. Arthur then sells the new car to Henry for a reasonable price.