Was denton ethical, At the time of signing the contract, do

Was denton ethical

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Reference no: EM133944186

Assignment:

In 1995, Mark Denton cosigned on a $101,250 loan that First Interstate Bank (FIB) made to his friend Eric Anderson. Denton's business assets-a mini-warehouse operation-secured the loan, because Anderson had no assets to use as collateral. Anderson also obtained a $260,000 U.S. Small Business Administration (SBA) loan from FIB at the same time. The purpose of both loans was to buy logging equipment with which Anderson could start a business. In 1997, the logging business failed and FIB repossessed and sold the equipment and used the funds to pay off the SBA loan. FIB then asked Denton to pay the other loan's outstanding balance ($98,460) plus interest. When Denton refused, FIB initiated proceedings to obtain his business assets. Denton claimed that Anderson's equipment was the collateral for the loan [ Denton v. First Interstate Bank of Commerce, 333 Mont. 169, 142 P.3d 797 (2006)] (See Priorities .)

Was Denton ethical? At the time of signing the contract, do you think he understood that the proceeds from the collateral sale would first be applied to the SBA loan? What was the court's assessment of his knowledge?

Reference no: EM133944186

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