Itzik Operates a Bakery with 10 Employees in Regina,Saskatchewan

Essay

Itzik operates a bakery with 10 employees in Regina,Saskatchewan.In May,Itzik borrowed $10 000 from MBank to finance the acquisition of a new oven.He gave MBank a security interest in all his present and future assets as security for his obligation to repay the loan.By July,his business was in trouble.He failed to remit to the Canada Revenue Agency the amounts he had withheld from the wages he paid his employees for May,June,and July.Instead,he used some of it to pay suppliers and the rest,$5000,he kept at the bakery for emergencies.Itzik defaults on his obligation to MBank.Is MBank entitled to the $5000?