Ornak Furniture Inc Had an Operating Line of Credit with the Bank

question 42

True/False

Ornak Furniture Inc had an operating line of credit with the Bank of Brandon.Ornak had given the bank a security interest in all its present and future assets to secure its obligations under the line of credit.The bank had perfected its interest by registration in 2011.Cronin carried on business as a supplier of wicker furniture.In 2012, Cronin delivered 20 wicker chairs to Ornak.Ornak put the chairs on display in its showroom.Under the agreement that Ornak had with Cronin, Ornak was not obliged to buy the chairs, but the act of selling a chair to a customer constituted the agreement by Ornak to buy the chair from Cronin.For every chair sold, Ornak paid Cronin whatever it sold the chair for less 50 percent.In December 2009, Ornak defaulted on its obligations to the bank and the bank seized its assets including the chairs supplied by Cronin.The bank is entitled to the chairs.

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