Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson

Exercise 25

Sylvia Castillo bought a pickup truck from Three Aces Auto Sales (TAAS) such that TAAS had a security interest in the truck. Her husband used the truck in his work as a cabinet maker. Sylvia defaulted on the payments, so TAAS repossessed the truck. Four days later, the Castillos filed a voluntary bankruptcy petition. TAAS refused to return the truck to the Castillos until it had proof of the bankruptcy filing and insurance coverage. The Castillos asked the bankruptcy court to compel TAAS to turn the truck over to them. TAAS said it would turn the truck over upon proof of insurance. The court ordered TAAS to turn the truck over. The Castillos finally got the truck. Did TAAS do anything wrong?