Legal Question in Business Law in Florida

secured transactions review

Y corp., a furniture retailer, grants a security interest in its equipment and inventory to bank one as part of a revolving credit agreement. Bank one immediately files a financing statement. Y corp. sells a computer server to z corp for cash. If y corp. defaults on its payments to bank one, can bank one attach the cash? Y corp. then sells a bedroom set to a couple on credit. Does bank one have a perfected security interest in y corp.'s account?


Asked on 5/15/07, 9:05 am

2 Answers from Attorneys
Johm Smith tom's

Re: secured transactions review

If this is for a law school class, do your own work. If this is a genuine business issue, then we can be retained to consult regarding security interests and other business legal needs. This is not the kind of question you want to be in business very long and still not have the answer to.

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Answered on 5/15/07, 9:14 am
Thomas Shigo The Shigo Law Firm, P.A.

Re: secured transactions review

I agree with Mr. Nance. The specific terms of the security agreement (and filed financing statement) will control and should be carefully reviewed with an attorney before you take any further actions. The sale of the server was not in the ordinary course of Y's furniture business. Therefore, the sale itself may actually be a violation of the security agreement giving rise to a default. Finally, most security agreements of the type you suggest include receivables. Presuming that the credit sale was in the ordinary course of business, yes they most likely can get to that account in the event of a default.

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Answered on 5/15/07, 9:40 am


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