Basics of an enforceable security interest

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Reference no: EM1347959

In 2002, Michael Sabol, running business in the recording industry as Sound Farm Productions applied to Morton Community Bank in Bloomington, Illinois for a $58,000 loan to enlarge his business. Moreover the loan application, Sabol as well signed a letter that stated, ‘the undersigned does hereby authorize Morton Community Bank to execute, file as well as record all financing statements, amendments, termination statements as well as all other statements authorized by Article 9 of the Illinois Uniform Commercial Code, as to any security interest.' Sabol didn't sign any other documents, comprising the financing statement, which did, but contain a description of the collateral. Less than three years later without taking repaid the loan, Sabol filed a petition in a federal bankruptcy court to declare bankruptcy. The bank demanded a security interest in Sabol's sound equipment. What are the basics of an enforceable security interest? What are the supplies of each of those elements? Does the bank have a lawful security interest in this case? Describe.

Reference no: EM1347959

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