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Question
Creditor: Harborview Capital Partners, LLC. Debtor: Sunrise Manufacturing, Inc. The loan is secured by a security interest in Debtor's funds held in a deposit account at Bank Meridian. A Control Agreement is executed among Debtor, Bank Meridian, and Harborview, providing that Bank Meridian will honor Harborview's instructions regarding the deposit account and will not permit withdrawals by Debtor without Harborview's directive. Debtor defaults, and Bank Meridian complies with Harborview's directives, preventing any withdrawal by Debtor. (a) Has Harborview’s security interest been perfected by control? (b) State the governing rule and the essential elements for perfection by control under RA 11057. (c) If Debtor terminates the deposit account at Bank Meridian and opens a new deposit account at Bank Canyon, what is the effect on Harborview’s control and perfection, and what steps are necessary to preserve perfection?