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Q: You are the chief executive officer of Money Games Inc.(MGI), which has begun to market Borrow & Spend, a video game set in the world of finance. To buy ads, MGI borrows $50,000 from First Savings
Bank. On MGI's behalf, you sign a note for the loan and offer its accounts receivable as collateral. You sign a security agreement that describes the collateral. The bank does not file a financing statement. Has the banks security interest attached? If so, when?
A: The bank's security interest has attached, but it has not perfected its security interest. [ Typically in a closing for a secured loan, the borrower executes and delivers the note and security agreement and then the bank authorizes the release of the funds to the borrower. When the funds are released, the bank's security interest has attached because it has an executed security agreement
describing the collateral and has given something of value for the secured interest (the loan). While the bank has a secured claim on the borrowers accounts receivable if there is a default on the loan, it has not perfected its security interest until it files the financing statement in the proper jurisdiction which would be the jurisdiction of incorporation of the corporation. Until it perfects its security interest, its claim against the accounts receivable will be subordinate to claims of other secured creditors who have perfected their security interest and it may lose priority to other creditors who perfected ahead of it. ]
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Original conversation
User: You are the chief executive officer of Money Games Inc.(MGI), which has begun to market Borrow & Spend, a video game set in the world of finance. To buy ads, MGI borrows $50,000 from First Savings Bank. On MGI's behalf, you sign a note for the loan and offer its accounts receivable as collateral. You sign a security agreement that describes the collateral. The bank does not file a financing statement. Has the banks security interest attached? If so, when?

Weegy: The bank's security interest has attached, but it has not perfected its security interest. [ Typically in a closing for a secured loan, the borrower executes and delivers the note and security agreement and then the bank authorizes the release of the funds to the borrower. When the funds are released, the bank's security interest has attached because it has an executed security agreement describing the collateral and has given something of value for the secured interest (the loan). While the bank has a secured claim on the borrowers accounts receivable if there is a default on the loan, it has not perfected its security interest until it files the financing statement in the proper jurisdiction which would be the jurisdiction of incorporation of the corporation. Until it perfects its security interest, its claim against the accounts receivable will be subordinate to claims of other secured creditors who have perfected their security interest and it may lose priority to other creditors who perfected ahead of it. ]
Koolsum|Points 226|

User: As company ombudsman, your task is to investigate complaints of wrongdoing on the part of corporate directors and officers, decide whether there is a violation of the law, and deal with the wrongdoers accordingly. Jane, a shareholder of Goodly Corporation, alleges that its directors decided to invest heavily in the firm's growth in negligent reliance on its officers' faulty financial reports. This caused Goodly to borrow to meet its obligations, resulting in a drop in its stock price. Are the directors liable? Why or why not?

Weegy: Maybe, But I think not, Jane must be the one who's liable of the drop in the stock price, because shes the one who alleges to a director,
kruzial|Points 85|

User: Agile Corporation borrows $1 million from Hi Finance Company (HFC). Agile signs a financing statement that describes the collateral, its inventory and proceeds, and HFC files the statement in the appropriate state office. Using the same collateral, Agile later borrows $500,000 from Metro Bank, which files its financing statement. Agile defaults on the loans. Metro claims that at the time of its loan it was unaware of HFCs interest. Between these parties, who has priority to the collateral? Discuss your answer.

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Asked 9/21/2011 10:26:23 PM
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