Entrepreneur LLC owes Sole Saver Auto Dealership $2,000. Entrepreneur executes a note to Sole Saver as security for the debt. This security

Question

Entrepreneur LLC owes Sole Saver Auto Dealership $2,000. Entrepreneur executes a note to Sole Saver as security for the debt. This security​

Quizplus · Accepted Answer

The security in the form of a note satisfies the value requirement for HDC status, which simply means that it has a monetary value equivalent to the debt owed. However, it does not constitute sufficient consideration for HDC status because the note itself is not a new form of payment or exchange for the debt owed.

Entrepreneur LLC Owes Sole Saver Auto Dealership $2,000