1. ABC Inc. borrowed funds from XYZ LLC to operate its auto parts business. The
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Question
1. ABC Inc. borrowed funds from XYZ LLC to operate its auto parts business. The loan was secured by the molds that were used to form the parts. ABC contracted with FFF to make the parts and provided FFF with the molds. When ABC defaulted on its obligations to XYZ and FFF, FFF asserted a "molder's lien" against the molds in its possession. A molder's lien is similar to an artisan's lien. XYZ argued that the molds were its property. Which claim has priority? Explain.2. Andy and Ben owned half of a two-unit residential building. Ben lived in the unit, but Andy did not. To collect a judgment against the, Dan obtained a writ of execution directing the sheriff to seize and sell the building. State law allowed a $100,000 homestead exemption if the debtor lived in the home and $175,000 if the debtor was also disabled and "unable to engage in gainful employment. Andy argued that he could not work because of "gout and dizziness." How much of an exemption were Andy and Ben allowed? Why?
1. ABC Inc. borrowed funds from XYZ LLC to operate its auto parts business. The loan was secured by the molds that were used to form the parts. ABC contracted with FFF to make the parts and provided FFF with the molds. When ABC defaulted on its obligations to XYZ and FFF, FFF asserted a "molder's lien" against the molds in its possession. A molder's lien is similar to an artisan's lien. XYZ argued that the molds were its property. Which claim has priority? Explain.
2. Andy and Ben owned half of a two-unit residential building. Ben lived in the unit, but Andy did not. To collect a judgment against the, Dan obtained a writ of execution directing the sheriff to seize and sell the building. State law allowed a $100,000 homestead exemption if the debtor lived in the home and $175,000 if the debtor was also disabled and "unable to engage in gainful employment. Andy argued that he could not work because of "gout and dizziness." How much of an exemption were Andy and Ben allowed? Why?
1. ABC Inc. borrowed funds from XYZ LLC to operate its auto parts business. The loan was secured by the molds that were used to form the parts. ABC contracted with FFF to make the parts and provided FFF with the molds. When ABC defaulted on its obligations to XYZ and FFF, FFF asserted a "molder's lien" against the molds in its possession. A molder's lien is similar to an artisan's lien. XYZ argued that the molds were its property. Which claim has priority? Explain.
2. Andy and Ben owned half of a two-unit residential building. Ben lived in the unit, but Andy did not. To collect a judgment against the, Dan obtained a writ of execution directing the sheriff to seize and sell the building. State law allowed a $100,000 homestead exemption if the debtor lived in the home and $175,000 if the debtor was also disabled and "unable to engage in gainful employment. Andy argued that he could not work because of "gout and dizziness." How much of an exemption were Andy and Ben allowed? Why?
Explanation / Answer
Ans 1 In my view as molds being made by FFF, till the time they are not paid for their molds its FFF property. XYZ is claiming on this behalf that they ordered the molds from FFF so it’s their property. In this loan where has been taken first will have the first priority on the payment of loan so they will be having the first right to secure the asset equal to value of their loan (loan interest) and rest can be secured by the other creditor. So in this case as ABC borrowed funds from XYZ and later on they have given the contract to make parts to FFF, which in turn is provided by the molds. ABC has the first priority over the molds. So till the time ABC not been able to pay the loan XYZ property till the value of its loan interest will deemed to be under possession of XYZ.
Ans 2 In this case Ben lived in an apartment owned by him and he also claims that he is having Gout problem. So as per the state laws he is allowed to have exemption of $175000.
In the case of Andy he owns some residential building but it does not clear that whether he lives in his residential unit or not, also it is also not known whether he is been able to earn on his own. So in this scenario exemption can’t be given to him, he will be deemed to be a fit and proper person full recoveries of money can be recovered from him without any exemption.
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