Schmelli Services, Inc. has offices in 24 cities in several eastern and southeastern states. Schmelli owes your client, Atlanta Industrial Bank (AIB), approximately $4,500,000 under line of credit facility, secured by a perfected, first priority security interest in Schmelli's accounts receivable and a first priority real property mortgage on Schmelli's home office building (located in Little Rock, Arkansas). The security agreement covering the accounts provides that the collateral secures not only Schmelli's $6,000,000 note executed pursuant to the line of credit facility, but also "all other obligations of Borrower to Bank now existing or hereafter incurred, whether (i) contingent or noncontingent, (ii) liquidated or unliquidated, (iii) disputed or undisputed, (iv) contemplated or uncontemplated, or (v) of the same or different type as the indebtedness evidenced by the Note."

Schmelli also owes AIB about $2,500,000, secured by a perfected, first priority security interest in a Learjet Model 35A-596. (Schmelli's flamboyant CEO, Telli Schmelli, uses the Learjet to fly from city to city while making monthly visits to each office.) There are about 1,500 hours on the airframe and engines, and Schmelli has maintained the aircraft in accordance with applicable Federal Aviation Administration regulations. The security agreement covering the Learjet provides that it secures the purchase-money loan (originally, $3,300,000) and also other obligations, using language identical to that in the line of credit security agreement, quoted above. Each security agreement provides that it is "governed by the law of the State of Georgia."

Schmelli is in default under both the line of credit facility and the aircraft loan. AIB has not yet "pulled the plug" on Schmelli; it continues to make discretionary advances against Schmelli's accounts receivable. However, yesterday a repo team retained by AIB peacefully took possession of the Learjet at the Pine Bluff, Arkansas, airport. AIB stored the aircraft with an aircraft dealer located at that airport.

The loan officer assigned to Schmelli wants to "turn the Learjet into cash as soon as possible." The officer, who has little experience with repossessions and enforcement, has asked you for advice on how to proceed.

A. Do you recommend a public or private disposition of the aircraft? What considerations bear on what approach to take? (See notes on Commercially Reasonable Dispositions and Reasonable Notification, infra.) Will your recommendation be affected by whether a IB expects to sell the aircraft to a third person or expects at least in the first instance to buy the aircraft itself?