25. Chen has a line of credit from International Bank in the amount of $500,000. This loan is secured by Chen's equipment. On day 1, Chen draws down on the loan in the amount of $10,000. On day 45, Chen draws down on the loan in the amount of $25,000. Which of the following is true? a. Both "draws" are secured by the same equipment. b. Neither "draw is secured by the same equipment. C. This type of loan is never allowed. d. Because Abe did not pay the first $10,00 he is not allowed to take the second draw. 26. Sears finances the sale of a John Deere tractor to Ricardo so he can cut the grass at his business office. Does Sears need to file a financing statement to perfect? a. No because John Deere is the primary creditor. b. No because Ricardo purchased the tractor as a consumer good. c. Yes because Sears is a junior creditor to John Deere. d. Yes because Sears loaned Ricardo the money to purchase the tractor for his business. 27. Mary loans money to her son Marvelous Marvin for college. In exchange, he gives her his valuable Honus baseball card. Mary's interest in the card a. Attaches and perfects immediately. b. Attaches but is not perfected. c. Is perfected but not attached. d. Attaches and perfects only after she files a financing statement. . .. nce forklifts 28. Woodie Bank loans Lumber Liquidators, Inc. $50,000 to purchase forklifts, taking a security interest in the forklifts. One month later, Lumber Liquidators borrows $20,000 from Plywood Bank, giving Plywood the same forklifts as collateral. Neither Woodie Bank nor Plywood Bank files a finance statement. Lumber Liquidators defaults on the loans. The party with priority is a. Woodie Bank, because its interest was the first to attach. b. Woodie Bank, because its interest was the first to perfect. C. Plywood Bank, because its interest was the second to attach. d. Plywood Bank, because its interest was the second to perfect a PMSI in equipment and per ILLIUI 34. Meal Dash, a food delivery service, borrows $75,000 from Culinary Bank to purchases a truck. When Meal Dash fails to make payment on the loan for several months, Culinary Bank hires Repo Mann to repossess it. Mann tows the truck from a public street. If Meal Dash sues Culinary Bank (and Repo Mann) for breach of the peace, it will probably a. Not prevail, because Quality Auto did not use judicial process. b. Not prevail, because the repossession was not a breach of the peace. c. Prevail, because did not default on the loan. d. Prevail, because the repossession was a breach of the peace. 35. Bully Bank repossesses the jet ski that Schwim gave as collateral for a loan. Bully Bank a. Must sell the jet ski in a commercially reasonable manner. b. Must sell the jet ski at a private auction, scheduled so that Schwim is able to attend. C. Must return the jet ski to Schwim within a reasonable period of time. d. Must keep the jet ski, but the bank officers may use the jet ski so that it remains in good repair. 24. GM finances the sale of a truck to Bubba. The collateral for the loan is the truck. GM files a financing statement describing the collateral as "a vehicle." This is a. Not sufficient. b. Sufficient c. Sufficient if the financing statement also includes Bubba's signature, d. Sufficient if the financing statement also includes the location of the collateral. E 40. Mafia Bank loans $500,000 to Billy Bob, taking a security interest in his $1,000,000 yacht and properly perfecting. A week later, Premier Bank loans $400,000 to Billy Bob and takes a security interest in the same yacht. If Billy Bob defaults on both loans and Mafia Bank repossess and sells the yacht, which of the following is true: . a. Mafia Bank gets $500,000, Premier Bank gets $500,000 and Billy Bob gets nothing. b. Mafia Bank gets $1,000,000 and Premier and Billy Bob get nothing. c. Mafia Bank gets $500,000, Premier Bank gets $400,000 and Billy Bob gets $100,000. d. Mafia Bank gets $500,000 and the remaining $500,000 is split between Premier Bank and Billy Bob. 25. Chen has a line of credit from International Bank in the amount of $500,000. This loan is secured by Chen's equipment. On day 1, Chen draws down on the loan in the amount of $10,000. On day 45, Chen draws down on the loan in the amount of $25,000. Which of the following is true? a. Both "draws" are secured by the same equipment. b. Neither "draw is secured by the same equipment. C. This type of loan is never allowed. d. Because Abe did not pay the first $10,00 he is not allowed to take the second draw. 26. Sears finances the sale of a John Deere tractor to Ricardo so he can cut the grass at his business office. Does Sears need to file a financing statement to perfect? a. No because John Deere is the primary creditor. b. No because Ricardo purchased the tractor as a consumer good. c. Yes because Sears is a junior creditor to John Deere. d. Yes because Sears loaned Ricardo the money to purchase the tractor for his business. 27. Mary loans money to her son Marvelous Marvin for college. In exchange, he gives her his valuable Honus baseball card. Mary's interest in the card a. Attaches and perfects immediately. b. Attaches but is not perfected. c. Is perfected but not attached. d. Attaches and perfects only after she files a financing statement. . .. nce forklifts 28. Woodie Bank loans Lumber Liquidators, Inc. $50,000 to purchase forklifts, taking a security interest in the forklifts. One month later, Lumber Liquidators borrows $20,000 from Plywood Bank, giving Plywood the same forklifts as collateral. Neither Woodie Bank nor Plywood Bank files a finance statement. Lumber Liquidators defaults on the loans. The party with priority is a. Woodie Bank, because its interest was the first to attach. b. Woodie Bank, because its interest was the first to perfect. C. Plywood Bank, because its interest was the second to attach. d. Plywood Bank, because its interest was the second to perfect a PMSI in equipment and per ILLIUI 34. Meal Dash, a food delivery service, borrows $75,000 from Culinary Bank to purchases a truck. When Meal Dash fails to make payment on the loan for several months, Culinary Bank hires Repo Mann to repossess it. Mann tows the truck from a public street. If Meal Dash sues Culinary Bank (and Repo Mann) for breach of the peace, it will probably a. Not prevail, because Quality Auto did not use judicial process. b. Not prevail, because the repossession was not a breach of the peace. c. Prevail, because did not default on the loan. d. Prevail, because the repossession was a breach of the peace. 35. Bully Bank repossesses the jet ski that Schwim gave as collateral for a loan. Bully Bank a. Must sell the jet ski in a commercially reasonable manner. b. Must sell the jet ski at a private auction, scheduled so that Schwim is able to attend. C. Must return the jet ski to Schwim within a reasonable period of time. d. Must keep the jet ski, but the bank officers may use the jet ski so that it remains in good repair. 24. GM finances the sale of a truck to Bubba. The collateral for the loan is the truck. GM files a financing statement describing the collateral as "a vehicle." This is a. Not sufficient. b. Sufficient c. Sufficient if the financing statement also includes Bubba's signature, d. Sufficient if the financing statement also includes the location of the collateral. E 40. Mafia Bank loans $500,000 to Billy Bob, taking a security interest in his $1,000,000 yacht and properly perfecting. A week later, Premier Bank loans $400,000 to Billy Bob and takes a security interest in the same yacht. If Billy Bob defaults on both loans and Mafia Bank repossess and sells the yacht, which of the following is true: . a. Mafia Bank gets $500,000, Premier Bank gets $500,000 and Billy Bob gets nothing. b. Mafia Bank gets $1,000,000 and Premier and Billy Bob get nothing. c. Mafia Bank gets $500,000, Premier Bank gets $400,000 and Billy Bob gets $100,000. d. Mafia Bank gets $500,000 and the remaining $500,000 is split between Premier Bank and Billy Bob