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. This portion of your assignment should be 1/2-1 page in length.
Eagle Sales Company owns a warehouse, subject to a mortgage obtained from First National Bank. Separately, Eagle and First National obtain insurance policies from Good Hands Insurance, Inc., to cover the warehouse. Later, Eagle sells the property to Interstate Distribution Corporation but keeps the insurance policy. First National agrees to act as Interstate’s mortgagee, and Interstate obtains an insurance policy from Good Hands to cover the property. A fire totally destroys the warehouse. Who can recover an amount for its loss? This portion of your assignment should be 1/2-1 page in length.
You will be assessed on the rationale you use in addressing the questions/issue posted, and how well you justify your argument regarding the issues. Your response must be thought provoking, have well developed ideas and/or opinions, and should reference any supporting material from the text, lecture or other sources you have used to complete the assignment.
You may use your text or the internet as a reference, but remember to cite your sources according to APA guidelines. For citation guidelines, please refer to the table in the APA Style section of the Tools & Resources page.