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Ace Grocery buys a shipment of frozen yogurt from Wholesaler. Wholesaler gave a security interest in its inventory to Grocers Group, Inc. (GGI). GGI perfected

Ace Grocery buys a shipment of frozen yogurt from Wholesaler. Wholesaler gave a security interest in its inventory to Grocers Group, Inc. (GGI). GGI perfected that security interest. The president of Wholesaler disclosed the security interest to Ace Grocery's president before selling the yogurt. If Wholesaler defaults on its obligation to GGI, what result?

A.

GGI can exercise its rights as a secured party against Ace because Ace had knowledge of the interest .

B.

GGI can exercise its rights as a secured party because it has a perfected security interest.

C.

GGI cannot exercise its rights as a secured party against Ace because Ace is a buyer in the ordinary course of business, so long as ACE did not know that buying the goods violated any third-party rights.

D.

GGI cannot exercise its rights as a secured party against Ace because of a continuing line of credit.

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