B LAW403 Lecture Notes - Lecture 9: Angelique Pettyjohn, Bridge Loan, Clark Equipment Company

• School: University of Alberta
• Department: Business Law
• Course: B LAW403
• Professor: Jeffrey Bone

Document Summary

This prevents a situational monopoly when creditors with an after acquired property clause in an security agreement exercise undue control by restricting the debtor from obtaining further funding/collateral. This is beyond the standard requirements of a pmsi. It is a new security agreement and essentially the lender gives the debtor value so the debtor can obtain a new good, which will be used as the collateral for the loan. You have a greater interest in the collateral if you are the lender than a gsa. As long as you are provider new value than you don"t have to worry about other creditors pertaining to priority. 1981 = pettyjohn applies for a loan from accs to buy cattle and the cattle are security/collateral of the loan. Condition of loan agreement is that pettyjohn is not to sell any cattle without the consent of the accs. Accs makes funds available only after cattle are purchases by pettyjohn.