Question

Reuter Bank loaned Sabean Corporation $500,000 in

Answer 1

Answer:

C) I, II, and III only.

• I. May demand payment of the full amount immediately from  the sureties when the corporation defaults on the loan.
• II. May demand payment of the full amount immediately from  the sureties even if Reuter does not attempt to recover any  amount from the collateral.
• III. May attempt to recover up to $200,000 from the collateral and  the remainder from the sureties, even if the remainder is more  than $300,000.

Explanation:

The bank has several options in this case, depending on the financial position and net worth of the sureties and the corporation. It can decide to collect all the debt directly from them, or collect part of the debt through the collateral property, or it can go after the assets of the corporation, or any type of combination. In this case the bank has three options from which it can collect the debt and it is up to them to decide how they proceed.