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Betty Owns a Home Electronics Store

Question 96

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Betty owns a home electronics store.Betty borrowed $100,000 a couple of years ago from Thirdbank,and Betty granted a security interest to Thirdbank on "present and after-acquired inventory." Betty is a generous store owner.Each employee is able to select electronics and place them in his or her office.Most employees have put elaborate stereo systems in their offices,and some have even installed home theater systems.One manager often brings his family in late in the evening to watch rented movies.The understanding was that these systems would be sold as demonstrator units after a few months,but that has happened only once.Most of the systems have been in the offices since shortly after the store opened 2 years ago.Betty has also supplied several of her relatives with stereo systems at no charge,also with the understanding that she can take them back and sell them at any time,although she has not taken any of these back.Betty defaults on the debt to Thirdbank.Will Thirdbank be able to recover the electronic components in employee offices and homes,as well as in Betty's relatives' homes?

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This is a floating lien and would cover ...

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