Which of the Following Was the Result in the Bankruptcy

question 46

Multiple Choice

Which of the following was the result in the bankruptcy case in the text In re Robert O.Troupe and Dawn Lynn Troupe involving the issue of whether a tractor dealer's failure to file a financing statement rendered its purchase money security interest unperfected because the tractor was equipment used for business purposes,or whether the security interest was automatically perfected as an interest in a consumer good?

• A) The tractor dealer prevailed because classification of collateral is determined as of the time of the creation of the security interest, and the consumers were bound by the representation on the security agreement that the tractor was to be used as consumer goods.
• B) The tractor dealer prevailed because although representations made by the buyers on the security agreement were not controlling, the buyers were using the tractor as a consumer good at the time of default, the time at which classification of collateral is made in any dispute.
• C) The bankruptcy trustee prevailed because the consumers made misrepresentations at the time of the sale as to the use of the tractor and wrongfully claimed that it was for consumer use when it was actually to be used as equipment in a business endeavor.
• D) The bankruptcy trustee prevailed because although no misrepresentations were made at the time of the sale, the tractor was being used as equipment in a business endeavor at the time of default; and the time of default is the point at which issues involving use are determined.
• E) The bankruptcy trustee prevailed because when at the time of default, collateral is used partly as a consumer good and partly as equipment in a business endeavor, the collateral loses its status as a consumer good.