Ezra owns Fans & Players, a retail sporting goods shop. When Great Lodge, a new ski resort, is built in the area, Ezra decides to expand and obtains a loan from Home Bank. The bank takes a security interest in Ezra's present inventory and after-acquired inventory as collateral for the loan. The bank properly perfects the security interest by filing a financing statement. Ezra's business is profitable, and he begins doubling his inventory. A year later, an avalanche destroys the ski resort. Ezra's business takes a turn for the worse, and he defaults on his debt to the bank. The bank seeks possession of his entire inventory, even though it is twice as large as it was when the loan was made. Ezra claims that the bank has rights to only half of his inventory. Is Ezra correct? Explain.

Question

Quizplus · Accepted Answer

The Answer of Ezra owns Fans & Players, a retail sporting goods shop. When Great Lodge, a new ski resort, is built in the area, Ezra decides to expand and obtains a loan from Home Bank. The bank takes a security interest in Ezra's present inventory and after-acquired inventory as collateral for the loan. The bank properly perfects the security interest by filing a financing statement. Ezra's business is profitable, and he begins doubling his inventory. A year later, an avalanche destroys the ski resort. Ezra's business takes a turn for the worse, and he defaults on his debt to the bank. The bank seeks possession of his entire inventory, even though it is twice as large as it was when the loan was made. Ezra claims that the bank has rights to only half of his inventory. Is Ezra correct? Explain.

Ezra Owns Fans & Players, a Retail Sporting Goods Shop