Exam 13: Negotiable Instruments, Credit, and Bankruptcy

Character refers to:

If an instrument is determined to be nonnegotiable, and a dispute arises, Article 3 will:

Most large certificates of deposit are:

If a creditor is successful in a legal action against a debtor, the court will award the creditor:

TP sells franchises in the Old Fast Food chain. TP sells a franchise to Choi for $100,000 by cashier's check. Choi then hears that TP is going out of business and tries to stop payment on the check. TP has already transferred the money to a third party who meets the UCC's requirements for a holder in due course. The bank paid that third party. TP declares it is out of business. In a subsequent lawsuit:

The most common use of drafts is to:

Filing for bankruptcy under Chapter 13 of the bankruptcy code results in ____ of debts.

A note involves two parties, the maker and the payee. Payment must be on demand.

In Fordyce Bank and Trust v. Bean Timberland, the bank lent Bean money to buy timber from landowners. Bean gave the bank security interests in the timber, which he sold to lumber companies that milled the logs into lumber. When Bean defaulted on the loan, the bank tried to collect from the lumber companies because it had a secured interest in the timber. The courts held that the bank:

Debt collection usually begin with:

Negotiable instruments are governed by:

If a negotiable instrument is assigned, the assignee has:

A creditor who obtains an interest in the property of a debtor without the debtor's express agreement may obtain:

Inventory may be used as collateral for a loan. If it is, the inventory is classified as:

The party who issues or creates a document that requests payment, probably from a bank, is called the drawee.

Billy wants to borrow $10,000 to start a male belly dancing business. Creditors are not anxious to lend him the funds. Billy convinces Gary to back-up the credit he gets from a bank. Gary is:

When real estate is used as collateral to secure the loan, the note is a:

When real estate itself is used to secure a debt obligation it is evidenced by a:

The law of mortgages comes from:

In Matter of Kmart Corp. the appeals court held that Kmart could make payments to preferred vendors, rather than others with better claims, as part of a rational Chapter 11 strategy to remain in business.