Mikhail and Dana Jackson, doing business as M&D Enterprises, Inc., bought a retail electronics store under a franchise agreement from a national company, Tunes Hut. The Jacksons borrowed from State Bank to pay for the business and signed loan documents and a financing statement, which identified the Jacksons as "Debtors." Elsewhere on the financing statement, the bank identified "M&D Enterprises, Inc., Tunes Hut, Dana K. Jackson, Mikhail C. Jackson" as "Debtors." The statement covered, in part, the store inventory. The bank filed the financing statement with the proper government agency. Three years later, the store closed. Tunes Hut terminated the franchise and took possession of the inventory, claiming the Jacksons and M&D owed Tunes Hut $6,394.73. State Bank filed a suit in a state court against Tunes Hut, claiming a perfected security interest in the inventory with priority over Tunes Hut's claim. Did the bank's security interest take priority over Tunes Hut’s claim? Pick the word that fills in the blank To perfect a security interest in personal property, the lender may file a fincancing statement. The purpose of this document is to give third parties public notice of the security interest. (An unsecured, a perfect security) interest has a higher priority than an unperfected. State Bank had (a perfected security interest, no security interest, an unsecured interest) in the inventory, whereas Tunes Hut had (secured interest, a perfected security interest, no security interest) in the inventory. Because of this, State Bank's claim did take priority over Tunes Hut's claim

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

See similar textbooks

Related questions

Question

Mikhail and Dana Jackson, doing business as M&D Enterprises, Inc., bought a retail electronics store under a franchise agreement from a national company, Tunes Hut. The Jacksons borrowed from State Bank to pay for the business and signed loan documents and a financing statement, which identified the Jacksons as "Debtors." Elsewhere on the financing statement, the bank identified "M&D Enterprises, Inc., Tunes Hut, Dana K. Jackson, Mikhail C. Jackson" as "Debtors." The statement covered, in part, the store inventory. The bank filed the financing statement with the proper government agency.

Three years later, the store closed. Tunes Hut terminated the franchise and took possession of the inventory, claiming the Jacksons and M&D owed Tunes Hut $6,394.73. State Bank filed a suit in a state court against Tunes Hut, claiming a perfected security interest in the inventory with priority over Tunes Hut's claim. Did the bank's security interest take priority over Tunes Hut’s claim?

Pick the word that fills in the blank

To perfect a security interest in personal property, the lender may file a fincancing statement. The purpose of this document is to give third parties public notice of the security interest. (An unsecured, a perfect security) interest has a higher priority than an unperfected.

State Bank had (a perfected security interest, no security interest, an unsecured interest) in the inventory, whereas Tunes Hut had (secured interest, a perfected security interest, no security interest) in the inventory. Because of this, State Bank's claim did take priority over Tunes Hut's claim

Expert Solution