Question

Jordon overdrew the account, but Margie had no knowledge or notice of the overdrafts. a few months later, margie discharged Jordon for an unrelated issue. Margie checked the bank account and learned that the business account was overdrawn by $7000. The overdraft protection covered the $7000 using Margies credit. However, she did not pay the amount owed. As a result the bank brought action to recover the amount of the overdraft from Margie. May the bank recover? Who is liable to pay the bank?

Answer 1

Soln. Yes, the Bank still can recover as Margie holds the business account with the Bank and responsible for all the legal obligations. There would be terms & conditions and agreements, that would be signed between Bank and the Business for all these exceptions situation. Jordon and Margie both holds the business together but once the Jordon is discharged from the Business, the complete legal obligations with any business entity and regulated firms, holds for the current business owner. In this case, Margie is the current business owner and hence responsible for all the business accounts obligations. Hence, with current situation, Margie is liable to pay to the Bank.