Aruna Ran a Grocery Store Business in Niagara Falls

question 29

Essay

Aruna ran a grocery store business in Niagara Falls.As security for a term loan to her, she had given Eaton Bank a security interest in her assets under s 427 of the Bank Act.Eaton Bank failed to register its interest under the Bank Act and made several other errors in creating the interest so that it was not effective under the Bank Act.Instead, Eaton Bank filed a financing statement under the Ontario Personal Property Security Act.Subsequently, Natasha lent Aruna $5000 and took a security interest in Aruna's assets.Natasha filed a financing statement under the Ontario Personal Property Security Act to perfect her interest.Later Aruna defaulted on her obligations to both Eaton Bank and Natasha.Whose interest in the assets of Aruna's grocery store business has priority? Would your answer be any different if Aruna's business had not been in Ontario?

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Definitions:

Respondent

The party that responds to a petition or an appeal in a legal proceeding.

Cease-And-Desist Order

A legal order issued by a government authority or court directing a person or entity to stop an alleged illegal activity.

Consent Order

A legal agreement approved by a judge or competent authority, resolving a dispute between two parties without the need for a trial.

Fine

A monetary penalty imposed by a court on a person or entity as punishment for an offense or breach of law.