Annotated Bibliography Writing Services: Would you have advised ABC Bank to grant the new loan of $75,000 to Greenery for inventory, with OR without an after acquired inventory clause?
Identify and analyze legal issues and make recommendations based on one or more fact patterns.
Facts: World Greenery, Inc. (Greenery) is a lawn and garden products company. Greenery manufactures lawn seeds and chemical-free plant sprays to sell to retailers throughout the country.
Greenery also operates 2 retail garden supply stores, and a distribution warehouse. The manufacturing plant, retail stores and warehouse are all located in the state of Oz.
In addition to manufacturing products, Greenery buys large orders of supplies from Chem-Free, Inc., Farmers’ Seed ‘N Grow Company, Martin’s Mulch, Neville’s Nursery, US Pottery, and several other companies, on a regular basis. Most orders are delivered to Greenery, then billed ton a monthly basis with balances due in 30 days.
In 2002, Greenery took a mortgage for 1 building that houses 1 of its 2 retail stores. Greenery owes $450,00 on that mortgage. In 2008, Greenery took another mortgage for its second retail store building on which it still owes $400,000. National Bank holds both these mortgages. All necessary paper work was properly filed to perfect National’s mortgages on each of the 2 store buildings in 2002 and 2008, respectively.
Greenery took out a mortgage on its manufacturing plant in 2001. Central Bank holds the mortgage on which $100,000 is owed. All necessary paper work was properly filed to perfect Central’s mortgage interest.
Greenery leases its distribution warehouse space from Warehouse Rentals, Inc. Greenery pays $800 rent on a monthly basis to Warehouse Rentals, Inc.
Greenery has a loan with ABC Bank on which Greenery owes $350,000. The loan money was used for start-up costs to build its second retail store. ABC did not file paperwork perfecting its secured interest.
Greenery received a new loan for $75,000 to pay for supplies for its manufacturing plant, and for inventory for its 2 retail stores. Greenery’s store inventory is purchased monthly from suppliers, then moved out through store sales continuously. ABC filed perfection papers for the secured transaction.
1. Would you have advised ABC Bank to grant the new loan of $75,000 to Greenery for inventory, with OR without an after acquired inventory clause? Why?
2. Assume Greenery decided to close all its business operations and liquidate all its business interests. Greenery currently owns assets, including equipment, inventory, vehicles, etc. totaling $1,000,000.
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