Hot Dress. Doreen writes a check for a dress to Hot Dresses, Inc., a small specialty shop owned primarily by Betty. Betty was getting ready to go on an extended European vacation and temporarily closed the shop the day after the dress sale to Doreen. When Betty returned, she had a number of other things to do and did not take Doreen's check and some other checks to the bank for three months. Betty was independently wealthy and only ran the shop as a hobby, so she had not been in need of funds. When Betty finally took Doreen's check to the bank, Betty requested that her bank, ABC Bank, deposit the check into her account. When ABC Bank, however, requested payment from Doreen's bank, XYZ Bank, the check was dishonored because of insufficient funds in Doreen's account. Although Betty did not particularly need the funds, she did not like to feel as if she had been cheated; therefore, she demanded that Doreen make the check good. Which of the following parties is the holder of the check? Multiple Choice Doreen O Hot Dresses, Inc. O Doreen's bank O Betty's bank O The intermediary bank that will ultimately negotiate the check from Betty's bank to Doreen's bankRepossession. Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina told her assistant Samantha that the only legal remedy was repossession; that she was going after the vehicles; and that Samantha should call law enforcement if she did not show up at the office by 10 a.m. for the next few mornings. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway at midnight one night and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding whether repossession was the only remedy available to Tina? Multiple Choice O Tina was correct regardless of whether a vehicle or another type of good was involved. O Tina was correct, but only because a vehicle was involved. O Tina was incorrect because only when a vehicle is involved, a party must disregard the collateral and proceed to judgment. O Tina was incorrect because regardless of whether a vehicle or another type of good was involved, Tina only had the right to ignore the collateral and proceed to judgment. Tina was incorrect because regardless of whether a vehicle or another type of good was involved, Tina had the right to either take possession of the collateral or ignore rights in the collateral and proceed to judgment.Which of the following is false regarding the requirements for a negotiable instrument? Multiple Choice O The instrument must be a written document. The instrument must be payable at a fixed future time, not on demand. O The instrument must have an unconditional promise or order to pay. O The amount to be paid in the instrument must be a sum certain in money. O The document must contain either the words of negotiability-"to the order of"-or words indicating that it is a bearer instrument.Bart received a check for his birthday as a present from his grandmother. Bart is a(n) of the check. Multiple Choice O holder in due course O assignor O assignee O drawer O holderIn terms of the requirements for becoming a holder in due course, which requirement is related to, but more stringent than, consideration? Multiple Choice For value O In good faith O Without notice of defects O A complete and authentic instrument O NegotiationClaims to Funds. Paul had a great job as a bank executive. Unfortunately, his bank came under scrutiny by federal regulators, and although Paul had done nothing illegal, he ended up being fired. Unfortunately for Paul, he had a number of debts. Among his assets were a house worth $250,000 on which he owed $150,000 to a bank that held a security interest; three vehicles; an expensive watch worth $5,000; and $120,000 in an Individual Retirement Account (IRA). He owed $900 per month in child support to his ex-wife Suzy and was behind on payments in the amount of $1,800. He also owed $2,000 in wages consisting of four months of back pay to Bob who took care of Paul's landscaping needs and swimming pool care. Unable to find a job and believing that he had no other option, Paul filed for Chapter 7 bankruptcy. All creditors angrily demanded payment from liquidation of Paul's assets. Paul, on the other hand, claims that he needs all the above-mentioned assets and that he should not have to give up anything. Only federal bankruptcy exemptions apply to Paul's case. Which of the following is true under bankruptcy law regarding Paul's claim to the watch? Multiple Choice O The watch will be sold, with the entire proceeds being used to satisfy the claims of creditors. O The watch will remain Paul's property because it is automatically exempt. O The watch will remain Paul's property if he can establish that it is needed in his profession. Paul's interest in the watch is exempt, but only up to $1,600. O Paul's interest in the watch is exempt, but only up to $600.Which of the following is true regarding a secured party's interest in proceeds? Multiple Choice A secured party automatically has an interest in proceeds for a limited amount of time. O A secured party has an interest in proceeds, but only if the secured party takes possession of the proceeds. O A secured party has an interest in proceeds, but only if a financing statement is filed on the proceeds. O A secured party has an interest in proceeds, but only if the secured party takes possession of the proceeds, or if the secured party files a financing statement on the proceeds. O The secured party may not acquire a security interest in proceeds unless a new agreement regarding the proceeds is reached with the debtor