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0538452803_269403 - party He has met all the necessary...

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BLTC-9e Sample Answer for End-of-Chapter Hypothetical Question with Sample Answer Chapter 24: Security Interests in Personal Property 24–2 Hypothetical Question with Sample Answer Marsh has a prize horse named Arabian Knight. Marsh is in need of working capital. She borrows $5,000 from Mendez, who takes possession of Arabian Knight as security for the loan. No written agreement is signed. Discuss whether, in the absence of a written agreement, Mendez has a security interest in Arabian Knight. If Mendez does have a security interest, is it a perfected security interest? Explain. Sample Answer: Mendez has both a security interest in Arabian Knight and is a perfected secured
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Unformatted text preview: party. He has met all the necessary criteria listed under UCC 9–203 to be a secured creditor. Mendez has given value of $5,000 and has taken possession of the collateral, Arabian Knight, owned by Marsh (who has rights in the collateral). Thus, he has a security interest even though Marsh did not sign a security agreement. Once a security interest attaches, a transfer of possession of the collateral to the secured party can perfect the party’s security interest without a filing [UCC 9–310(b)(6); 9–313]. Thus, a security interest was created and per-fected at the time Marsh transferred Arabian Knight to Mendez as security for the loan....
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