If inventory is sold on credit, what happens to PMSI super-priority in the resulting account?

When inventory is sold on credit, a purchase money security interest (PMSI) that was attached to that inventory does not retain its super-priority status in the resulting accounts receivable. The PMSI super-priority is lost once the inventory is sold because the PMSI is associated specifically with the goods while they are held as inventory.

After the sale, the inventory has been transformed into accounts receivable (payment owed by the buyer) rather than remaining as collateral for the original security interest. The security interest in the accounts receivable does not automatically continue to reflect the super-priority that PMSI can have in the context of the original inventory. Instead, the seller generally becomes just another creditor with respect to the account receivable, and previously granted PMSI rights do not follow the inventory into its new form of an account receivable.

This principle allows other creditors potentially to step in without interference from the PMSI, reaffirming the reasoning behind the loss of that super-priority upon the sale of the inventory on credit.