Question
Bill an amateur musician, wants to buy an expensive violin from Violin Express (VE). VE wont sell the violin to Bill on credit, so Bill
Bill an amateur musician, wants to buy an expensive violin from Violin Express (VE). VE wont sell the violin to Bill on credit, so Bill borrows $5,000 from Mr. Banks. Bill signs a security agreement giving Mr. Banks a security interest to the violin to secure repayment of the loan and Mr. Banks gave Dan $5,000 in cash. The same day he got the money from Banks, he used it to buy the violin from VE. What type of collateral is the violin? Does Banks have a purchase money security interest(PMSI) in the violin? Why or Why not? What is special about PMSI's? What would change if anything, if Bill were a professional violin player?
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