Trump wants to take a security interest in Debtor's bank account, maintained at Chemical Bank. When Secured Party discovers this, it sues all of the Debtor's employees to make them disgorge this money, arguing conversion. Debtor runs a plumbing supply company.
Debtor has loans at two different banks.
Debtor maintains its operating account at 2d Bank. Debtor later defaulted to 2d Bank. Assume that all of the funds were identifiable proceeds of 1st Bank s collateral. When 1st Bank discovers the setoff, it sues 2d Bank for conversion of its collateral. Shortly thereafter, Debtor defaults to Lender.