Full opinion text
DECISION JOYNER, District Judge. This consolidated civil action involving claims for debts arising out of a security agreement and master credit arrangement and counterclaims for bad faith, lender liability and negligence was tried before this Court without a jury between June 3 and June 9,1993. The parties thereafter submitted their proposed findings of fact and conclusions of law in July, 1993 and the matter is now ripe for adjudication. Accordingly, pursuant to Fed.R.Civ.P. 52(a), this Court now renders the following: FINDINGS OF FACT 1. Chrysler Credit Corporation is a Delaware corporation with offices located at 901 Wilshire Drive, Troy, Michigan and 200 Tournement Drive, Horsham, Pennsylvania and is engaged in the business of providing wholesale financing for the acquisition of new and used motor vehicle inventory for motor vehicle dealerships. It is a subsidiary of the Chrysler Financial Corporation which is, in turn, a subsidiary of Chrysler Corporation. (N.T. 6/3/93, 47-48; 6/04/93, 4; Exhibits P-13, P-21) 2. B.J.M., Jr., Inc. is a Pennsylvania corporation which had, at all relevant times, a principal place of business at 2431 West Main Street, Norristown, Pennsylvania and was engaged in the business of selling new and used Jeep/Eagle and other motor vehicles to the general public under the name “All-Star Jeep/Eagle.” (Exhibits P-13, P-27) 3. Joseph Lashinger is an adult individual residing at 129 Stable Road, Norristown, Pennsylvania. (N.T. 6/7/93, 92) 4. Justin and Carol Gambone are adult individuals, husband and wife, who reside at 2130 Wentz Church Road, Lansdale, Pennsylvania. (N.T. 6/8/93, 212) 5. Prior to 1989, one-hundred percent (100%) of the stock of B.J.M., Jr., Inc. was owned by one Benjamin J. Márchese, Jr. (N.T. 6/7/93, 98-100) 6. In October, 1989, Joseph Lashinger and Justin and Carol Gambone purchased 66% of the stock of B.J.M., Jr., Inc. for $850,000 from Mr. Márchese. One of the provisions of that buy-sell agreement and one of the conditions for Chrysler Credit’s approval of the agreement was the understanding that the Lashingers and the Gambones would satisfy for B.J.M., Jr., Inc. a Meridian Bank loan, a Fidelity Bank auto lease and the approximately $209,000 sold-out-of-trust situation which the corporation then had with Chrysler Credit Corporation. (N.T. 6/3/93, 7-8; 6/7/93, 108-110; 6/9/93, 50-51) 7. George Tallant and Edward Muscara are adult individuals who were at all times relevant hereto employed by Chrysler Credit Corporation as Branch Manager and Sales Representative respectively. (N.T. 6/3/93, 4-6; 6/4/93, 91-92) 8. Under the Security Agreement and Master Credit Agreements which Chrysler Credit and B.J.M., Jr., Inc. entered into in May, 1988 and again in May, 1991, interest would begin to accrue upon delivery of each financed vehicle to the dealership and would continue to accrue until such time as the vehicle was paid for in full by the dealership after sale. (N.T. 6/3/93, 67; Exhibit P-13) 9. In May, 1988, prior to Messrs. Lash-inger and Gambone’s acquisition of an interest in the corporation, B.J.M., Jr., Inc., through its then-principal, B.J. Márchese, Jr. and in conjunction with the execution of a Security and Master Credit Agreement, gave to Chrysler Credit a security interest in all of its “chattel paper, accounts whether or not earned by performance, contract rights, documents, instruments, general intangibles, consumer goods, equipment, fixtures, leasehold improvements, whether now owned or hereafter acquired, together with all additions and accessions thereto,” all “inventory, including but not limited to all new and used motor vehicles, campers, travel trailers, mobile homes and motor homes and automotive parts and accessories, whether now owned or hereafter acquired, together with all additions and accessions thereto” and “all proceeds of the property covered by this statement .” This security interest, in turn, was documented by the filing of financing statements with both the Pennsylvania Department of State and the Office of the Pro-thonotary of Montgomery County, Pennsylvania on June 3, 1988. (N.T. 6/03/93, 5-7; Exhibits P-2, P-3, and P-4) 10. The Master Credit Agreement and Security Agreement entered into by B.J.M., Jr., Inc. and Chrysler Credit Corporation in May, 1988 was lost and could not be located in Chrysler Credit’s files. That agreement, however, had the same terms and conditions as did the Master Credit Agreement and Security Agreement which the parties executed in May, 1991. (N.T. 6/03/93, 12-13; Exhibit P-10) 11. A sold-out-of-trust situation arises when an automotive dealership sells and receives payment for a vehicle which they have financed but fails to remit payment for that vehicle to the wholesale (or retail) credit source. (N.T. 6/3/93, 8-9) 12. After the November, 1989 buy-out, Justin Gambone assumed the position of President and general manager of B.J.M., Jr., Inc., trading as All-Star Jeep/Eagle. Joseph Lashinger became the Vice President of the corporation. (N.T. 6/8/93, 218; Exhibit P-5) 13. In November, 1989 and again in November, 1990, B.J.M., Jr., Inc., on these occasions through its principals Lashinger and Gambone, gave security interests to Madison Bank in “all of the debtor’s property and assets whether existing or hereafter acquired or created, including all of ... [B.J.M.’s] chattel paper, fixtures, accounts, instruments, money, inventories, equipment and all accessories, substitutions and appurtenances thereto, documents, general intangibles, records, insurance policies and all cash and non-cash collateral and the proceeds and products of the foregoing ...” to secure loans in the amounts of $250,000 and $100,000, respectively. On November 16, 1990, that security interest was recorded and filed in the office of the Prothonotary of Montgomery County, Pennsylvania. (N.T. 6/03/93, 86-91; 6/04/93, 71-78; Exhibit P-39) 14. Justin Gambone holds a Bachelor’s degree in Business Administration from Temple University and has partially completed graduate work at Temple toward an advanced business degree. Since his graduation from college in 1974, Mr. Gambone has been employed primarily in the automotive sales industry in the capacity of accountant, office manager, controller and general manager and for a time was also self-employed as a tax preparer/accountant and small business planner. From 1978 to 1989, he was employed as the general manager of Márchese Honda. (N.T. 6/8/93, 212-217; Exhibit D-54) 15. Joseph Lashinger earned both a Bachelor’s degree in Political -Science and a Master’s degree in American National Government from the University of Pennsylvania and has a law degree from the Delaware (Widener) Law School. He is a partner in the Norristown, Pennsylvania law firm of Fox, Differ, Callahan, O’Neill & Lashinger specializing in family law and was an adjunct professor of family law at Widener Law School for four years. Mr. Lashinger is also a contributing editor to the Pennsylvania Family Lawyer, a former member of the Pennsylvania House of Representatives and a partner in a Harrisburg-area lobbying firm. In addition, Mr. Lashinger had in the past represented the legal interests of Mr. Márch-ese and other automotive dealerships in Montgomery County; he is a former director of the Madison Bank in Blue Bell, Pennsylvania, a former restaurant owner and had done tax consulting work in the late 1970’s-mid 1980’s. (N.T. 6/7/93, 92-97) 16. Prior to creating and executing the November, 1989 buy-sell agreement, Messrs. Lashinger and Gambone did some due diligence and, together with one of Mr. Lashing-er’s law partners examined the dealership’s and the corporation’s debt structure, operations and expenses and spoke with Chrysler Motors’ representatives about what products would be available for sale in the coming year. (N.T. 6/7/93, 100-101) 17. At the time that the Lashingers and Gambones were negotiating with Mr. Márch-ese for the sale of 66% of the stock of B.J.M., Jr., Inc., the All-Star dealership was sold-out-of-trust in the amount of $226,000. The dealership had been placed on finance hold by Chrysler Credit Corporation since March of 1989 with the effect that it hadn’t been able to acquire new or used vehicles for its inventory since that time. (N.T. 6/3/93, 26-27; 6/7/93, 101-102) 18. Although Chrysler Credit did not then declare B.J.M., Jr., Inc. in default under its Security/Credit Agreements as a result of the out-of-trust situation in early November, 1989, Mr. Tallant did threaten to “padlock the doors” of the dealership if settlement with Lashinger and Gambone could not be immediately consummated. (N.T. 6/7/93, 102-103) 19. At the time of their acquisition of 66% of the B.J.M., Jr., Inc. stock and as a further condition of Chrysler Credit’s approval of the buy-sell agreement, the Lashingers and the Gambones executed continuing personal guarantees of the debts of B.J.M., Jr., Inc. in favor of Chrysler Credit Corporation. (N.T. 6/3/93, 7-8; Exhibits P-6, P-7) 20. As of May 6, 1988, the All-Star Jeep/Eagle dealership had a line of credit with Chrysler Credit Corporation of $2.2 million. (N.T. 6/3/93, 5-6, 55-59; Exhibit P-1) 21. B.J.M., Jr., Inc./All-Star did not have to finance its wholesale purchases of vehicles through Chrysler Credit Corporation. Although not many banks or financing companies offer wholesale business financing, B.J.M. could have gone to any bank or finance company that offered such financing to finance its inventory. (N.T. 6/9/93, 113-114) Chrysler Credit did offer an incentive to dealerships to finance through them in the form of their dealer reserve program whereby they would pay a small am'ount in give monies to the dealer for all vehicles financed. (N.T. 6/8/93, 26-27) 22. Upon the Lashingers’ and the Gam-bones’ purchase of the B.J.M. stock in November, 1989, Chrysler Credit Corporation revised the dealership’s line of credit for the purchase of new vehicles to $1 million and to $60,000 for the purchase of used vehicles. (N.T. 6/3/93, 61; 6/8/93, 18) 23. Notwithstanding that the dealership’s line of credit had been reduced to $1,060,000 upon the partial buy-out in November, 1989, Chrysler Credit took no action with respect to reducing B.J.M.’s then-existing inventory of new and used vehicles. (N.T. 6/7/93, 116—119) 24. Chrysler Credit Corporation received notice every time the factory (Chrysler Motors) sent new vehicles to the All-Star Jeep/Eagle dealership and thus knew how much of its credit line the dealership was using at any given time. (N.T. 6/3/93, 67) 25. Chrysler Credit Corporation and George Tallant, as Branch Manager for the Horsham, Pennsylvania office of Chrysler Credit Corporation were responsible for ensuring that B.J.M., Jr., Inc. did not overextend its line of credit. (N.T. 6/3/93, 64) 26. If a dealership’s line of credit gets too high and the dealership gets too many financed vehicles, it runs the risk of being unable to pay the interest on those vehicles and the dealership could be “strangled.” (N.T. 6/3/93, 63) 27. At some point between November, 1989 and November, 1991, George Tallant and Chrysler Credit Corporation allowed B.J.M., Jr., Inc. trading as All-Star Jeep/Eagle to over-extend its $1,060,000 credit limit to nearly $2 million. (N.T. 6/3/93, 64) 28. In January of 1991, B.J.M. was again found to be sold out-of-trust to Chrysler Credit in the approximate amount of $200,-000. (N.T. 6/3/93, 9; 6/8/93, 46-47) 29. On January 25, 1991, Chrysler Credit declared the dealership to be in default of the financing/security and master credit agreements and notified B.J.M. and its principals (Lashinger and Gambone) that it was accelerating the balance due under the agreements. However, as an “accommodation” to the dealership, Chrysler Credit would keep the dealership on its “finance hold” status and would “withhold taking further action until February 28, 1991, in order to permit the dealership time to pay off the debt in full through other financing or other means.” (N.T. 6/8/93, 47; Exhibits P-41a, P-41b, P-41e) 30. Although B.J.M. was able to continue to operate the business with its existing inventory, it could not acquire any additional new or used cars until it satisfied the sold out-of-trust condition. (N.T. 6/8/93, 47-48) 31. In February, 1991, Messrs. Lashinger and Gambone met with Mr. Tallant in an effort to agree on the means to satisfy the out-of-trust situation. At that time, there were three options potentially available to cure the dealership’s problems: recapitalization and refinancing of the company, consolidation of B.J.M.’s Jeep/Eagle franchise with the local Chrysler/Plymouth franchise and a direct sale of the franchise to another entity. (N.T. 6/8/93, 48-53) 32. Shortly thereafter, Mr. Lashinger and Mr. Gambone began separate negotiations for both a consolidation and an outright sale of the franchise with the local Chrysler/Plymouth franchise and with the principals of Norco Jeep/Eagle and Murray Dodge. At that time, however, Chrysler Motors Corporation would not allow consolidation because of existing company policy to not permit such a merger in major metropolitan areas and no agreement could be reached for the sale of the franchise. That policy, however, was changed in or about July, 1991. (N.T. 6/8/93, 48-55; Exhibit D-39) 33. After further discussions with George Tallant and Chrysler Credit Corporation, an agreement was eventually reached in or about April, 1991 for the refinancing and recapitalization of the B.J.M. dealership. Under the terms of the recapitalization, B.J.M. borrowed $150,000 from Chrysler Motors Corporation and $100,000 from the Madison Bank; Gambone and Lashinger supplied another $125,000 in loans and B.J. Márchese forgave the corporation’s existing debt to him in consideration for Chrysler Credit Corporation’s release of his personal guaranty. (N.T. 6/3/93, 9-10; 6/8/93, 56-62; Exhibits P-36, D-32) 34. In conjunction with the refinancing, Mr. Lashinger and Mr. and Mrs. Gambone were required to and did execute among other things, an Agreement to Reaffirm their personal guarantees of the corporation’s debts, another Security Agreement and Master Credit Agreement, an Agreement to Pay Wholesale Interest Charges in Arrears, and General Releases of Claims against Chrysler Credit Corporation, Wholesale Cash Transfer Check Authorization and new UCC-1 Financing Statements. (N.T. 6/3/93, 9-14; 6/8/93, 62-64, 70-74, 129-140; Exhibits P-5, P-8, P-9, P-10, P-11, P-13, P-14, P-14a, P-15, P-16, P-33, P-34, P-35) The Wholesale Cash Transfer Cheek Authorization gave Chrysler Credit Corporation authority to draw Cash Transfer Checks on B.J.M.’s Madison Bank account to meet the wholesale payments due it for vehicles sold. (P-33) 35. Despite the fact that Messrs. Gam-bone and Lashinger were $50,000 short in terms of the amount of money they were to loan the company, the parties closed on the recapitalization of the dealership and the sold-out-of-trust condition was remedied on or about May 31,1991. (N.T. 6/8/93, 77,151-154) 36. In conjunction with the Spring, 1991 recapitalization of the dealership, B.J.M., Jr., Inc. through its principals Lashinger and Gambone, again gave a security interest to Chrysler Credit Corporation in the same items covered by the May, 1988, November, 1989 and November, 1990 security interests. This interest, in turn, was recorded on April 22, 1991. (N.T. 6/03/93, 39-40; Exhibit P-5) 37. On May 30 and May 31, 1993, via correspondence, Messrs. Gambone and Lash-inger notified Mr. Tallant that they approved of his extension of their new and used car credit lines above the previous limits of $1 million and $60,000 respectively. (N.T. 6/3/93, 17-18; 6/8/83, 155-157; Exhibits P-29, P-30) 38. On or about June 3, 1991, Chrysler Credit Corporation re-opened B.J.M.’s lines of credit and on June 5, 1991, removed the dealership from the direct assignment of factory monies that had been lodged against it on November 8, 1991, thus enabling B.J.M. to again receive the rebates and other receivables due it from the factory. (Exhibits P-30, P-31 and P-37; N.T. 6/3/93, 15-19) 39. Notwithstanding that B.J.M./A11-Star’s credit lines were re-opened in early June, 1991, the dealership was unable to meet Chrysler Motors’ April and May, 1991 “build-out” deadlines for placing factory orders for the end of the 1991 model year with the result that B.J.M. could not get additional new vehicle inventory except by dealer trading until the new year models could be delivered in August or September. (N.T. 6/8/93, 78-81) 40. As a general rule, it is not profitable for a dealership to obtain its inventory by means of dealer trading because most dealerships in the Philadelphia area sell vehicles at invoice prices and the selling dealer usually sells the vehicle minus the factory holdback money. Since the holdback money represents the profit in the car, a dealership which is forced to dealer trade for inventory is not competitive. Factory holdback monies, in turn, will become a receivable to the dealership from the factory. (N.T. 6/8/93, 21, 23, 80-81) 41. On October 21, 1991, Chrysler Credit Corporation conducted a ear check or wholesale inventory audit at the B.J.M. dealership and discovered (1) that the dealership had, within the preceding two weeks, sold a number of vehicles for which it had failed to remit payment to Chrysler Credit Corporation; (2) that several vehicles that had been designated as demonstrator models had actually been sold; (3) and that the dealership still had in its possession several certificates of origin for vehicles that had been sold. (N.T. 6/3/93, 21-22; 6/4/93, 92-97, 153-154) 42. Chrysler Credit followed up the October 21, 1991 car cheek with a full wholesale audit of All-Star on November 1, 1991. Although that audit had results which were satisfactory to Chrysler Credit, in the course of that audit, Mr. Muscara and several other Chrysler Credit representatives that were present at the dealership on that date, directed All-Star’s office manager to fax into Chrysler Credit’s office the serial numbers of several sold vehicles on which the final paperwork had yet to be processed and the checks deposited. (N.T. 6/3/93, 22-23, 72-75; 6/4/93, 97-99, 172-174) 43. On November 1, 1991, the same date as the wholesale audit, Chrysler Credit drew a check payable to itself in the amount of $65,857.30 on B.J.M.’s account in payment of the wholesale vehicles which it had floor-planned. It subsequently drew two additional checks payable to itself on the B.J.M. account on November 4 and November 6, 1991 in the amounts of $45,803.79 and $20,-929.97, respectively. (N.T. 6/3/93, 24, 75; 6/4/93, 174) 44. On November 7, 1991, George Tallant was informed by Chrysler Credit’s bank that the three checks had been returned for non-sufficient funds. Mr. Tallant then contacted Mr. Gambone and requested that the returned checks immediately be certified. Mr. Gambone, however, could not have the checks certified because the funds were not then available in or to B.J.M.’s Madison Bank account. (N.T. 6/3/93, 24-25; Exhibit P-17) 45. On November 7, 1991, Mr. Tallant again put the B.J.M. dealership on finance hold and lodged an assignment of factory monies/receivables against it. In addition, he reported the returned checks to Chrysler Credit’s eastern area credit committee and was instructed to seek the issuance of a restraining order against All-Star from the Court. (N.T. 6/3/93, 26-28) 46. On November 8, 1991, Judge Bechtle issued a temporary restraining order against B.J.M., Jr., Inc. preventing it from further disposing of its new or used car inventory pending a full hearing on the merits which was then scheduled for November 18, 1991. (N.T. 6/8/93, 82-83) 47. Although Chrysler Credit was asked to re-deposit the cheeks that had been returned for payment, it declined to do so. (N.T. 6/3/93, 119; 6/4/93, 65-69; 6/9/93, 14-16) 48. On or about the same date as the temporary restraining order was obtained, Chrysler Credit Corporation’s credit committee declared B.J.M., Jr., Inc. to again be in default of the financing/security and credit agreement. Unlike the January, 1991 declaration of default, however, no formal written notice of default was ever issued to B.J.M., Jr., Inc. or its principals. (N.T. 6/3/93, 76-80, 120) 49. Paragraph 9.0 of the Security Agreement and Master Credit Agreement executed by the parties on May 20, 1991 states that “[A]ny notice given hereunder shall be in writing and given by personal delivery or shall be sent by United States Mail, postage prepaid, addressed to the party to be charged with such notice at the respective address set forth below ...” (Exhibit P-17) 50. Between 1989 and 1991, Chrysler Motors promoted many of its Jeep/Eagle products through the use of rebate programs. Because most customers elect to take their rebates off the price of the vehicle they are buying, it is the dealer (not the customer) which must wait to receive the rebate from Chrysler Motors and rebates therefore become receivables for a dealership. (N.T. 6/8/93, 22-24) 51. It was not uncommon for the All-Star Jeep/Eagle dealership to wait anywhere between two and six weeks to receive a rebate check from Chrysler Motors Corporation. (N.T. 6/8/93, 25) 52. Irrespective of the fact that All-Star often had to wait up to six weeks to receive a rebate, Chrysler Credit demanded and expected payment in full for any and all vehicles sold within seven days of the sale of the vehicle. Although the factory did not pay interest on the rebate money, interest would continue to be charged by Chrysler Credit until the vehicle(s) sold were paid for in full. (N.T. 6/3/93, 121-123; 6/4/93, 93-94; 6/8/93, 25-26) 53. At the time that Chrysler Credit orally declared B.J.M./All-Star to be in default in November, 1991, Chrysler Motors owed the dealership some $140,000 from rebates and other promotional and advertising programs. Those receivables were assigned to and paid directly to Chrysler Credit after the default was declared. (N.T. 6/8/93, 29, 229-231; 6/3/93, 154-157, 165-166; Exhibit D-1A) 54. As of November 26, 1991, the All-Star dealership’s sold-out-of-trust condition totalled $240,865.20. (N.T. 6/3/93, 28; Exhibit P-18) 55. On November 27, 1991, Chrysler Credit Corporation’s motion for writ of seizure and preliminary injunctive relief against B.J.M., Jr., Inc., Lashinger and Gambone was heard before Judge Bechtle. B.J.M. was permitted to continue its operations and to retain possession of its motor vehicle inventory at that time. (N.T. 6/8/93, 83-84) 56. On January 14,1992, B.J.M., Jr., Inc., trading as All-Star Jeep/Eagle filed a Petition for Relief under Chapter 11 of the United States Bankruptcy Code and the dealership continued to operate in January and February, 1992 under the Chapter 11 umbrella. (N.T. 6/3/93, 31-32) On February 19, 1992, Judge Bechtle ordered that this case be placed in suspense pending the outcome of the bankruptcy proceedings. 57. On March 18,1992, following hearing, United States Bankruptcy Judge Scholl entered an order upon agreement of counsel granting the VMDT Partnership, All-Star/ B.J.M.’s landlord, relief from the automatic stay provisions of the Bankruptcy Code and directing B.J.M. to vacate the premises at 2431 West Main Street in Norristown “on or before April 1, 1992.” (N.T. 6/9/93, 123; Exhibit P-45) 58. In addition to their attorneys and counsel for the landlord and the bankruptcy counsel for the corporate debtor, B.J.M., Jr., Inc., Messrs. Gambone, Lashinger and Tal-lant were all present at the March 18, 1992 hearing before Judge Scholl. At the conclusion of that hearing, Mr. Tallant, Mr. Gam-bone and Mr. Lashinger agreed that B.J.M.’s motor vehicle inventory would be turned over to Chrysler Credit Corporation and moved for storage to Jim Wynn’s Volvo dealership and the Hatfield Auto Auction later that same day. (N.T. 6/03/93, 33; 6/08/93, 88-89; 6/09/93, 124; 6/04/93, 99-101) 59. At the direction of Edward Muscara, Chrysler Credit Corporation’s representatives removed all of the motor vehicles from the All-Star dealership on March 18, 1992. Because the vehicles were moved from the parking lots and the showroom during a heavy rainstorm, the showroom, service area and other parts of the dealership were left with about 2 inches of rainwater inside. (N.T. 6/04/93, 100) 60. In addition to discussing the turnover of the motor vehicle inventory immediately after the March 18,1992 bankruptcy hearing, those same individuals also discussed scheduling a time for Chrysler Credit’s repossession of the dealership’s fixed assets, furnishings and equipment on either March 24 or March 27, 1992. However, no clear agreement was ever reached with respect to either date. (N.T. 6/03/93, 32-33; 6/08/93, 89-90, 165-169; 6/09/93, 125-126) 61. On March 27, 1992, Edward Muscara arrived at the B.J.M. dealership at 9:00 a.m. with Jay and Luke Whitman from the Omar Landis Auction Company and several of their employees to seize the furniture, equipment and other fixed assets of the business. They were met there by one Robert Cornog, a representative of the VMDT partnership and were given access to the premises. (N.T. 6/04/93, 105-106; 6/07/93, 18, 70) At that time, although the electricity had been turned off, the dealership’s offices appeared to be in relatively the same condition as though the business was still operational. (N.T. 6/07/93, 18-20, 71-72) 62. At Mr. Muscara’s direction, the Omar Landis employees emptied and removed all of the furniture, file cabinets, computers, telephones, fax machines, copiers and all other equipment from the dealership’s premises for transport to the Landis Auction facility in Ephrata, Pennsylvania. In the course of moving the furniture and equipment, nearly all of B. J.M., Jr., Inc.’s files and records were spilled, eo-mingled, piled and strewn throughout the dealership’s offices. Many of the records were also trampled upon. (N.T. 6/04/93, 106-108, 126-130, 132-133; 6/08/93, 90-93, 172-173; 6/09/93, 9-12, 68-70, 134-136; Exhibits D-31, D-42, D-43, D-44) 63. Justin Gambone arrived at the dealership at 1:30 p.m. on March 27, 1992 at which time the Chrysler Credit representatives and Omar Landis employees were taking a lunch break. Upon observing the condition of the files and records of the business, Mr. Gam-bone notified Mr. Lashinger and asked that he contact the local police department. (N.T. 6/04/93, 108-109; 6/07/93, 21-22, 73-74; 6/08/93, 90-91; 6/09/93, 68-74) 64. A short time thereafter, Mr. Lashing-er as well as six officers from the West Norriton Township Police Department arrived at the All-Star premises. At the direction of the police, the representatives of Chrysler Credit Corporation and the Omar Landis Auction Company discontinued their seizure of the furniture and equipment, padlocked the trucks on which many of the already-removed items had been placed, and left the site. (N.T. 6/03/93, 34-36; N.T. 6/04/93, 109-110, 111-123, 141-144; 6/07/93, 21-23, 75-80; 6/08/93, 91-95) 65. In response to Mr. Lashinger’s request, Chrysler Credit Corporation hired a moving company to return to the All-Star premises and pack up the files and records that had been dispersed in the course of the repossession and set them aside for Messrs. Lashinger and Gambone to move. Nevertheless, neither Mr. Gambone nor Mr. Lashing-er endeavored to re-create or re-assemble the files and records in an orderly fashion. (N.T. 6/08/93, 171-174) 66. On April 7, 1992, Judge Scholl approved and entered a Consent Order granting Chrysler Credit Corporation’s Motion for Relief from the Automatic Stay under 11 U.S.C. § 362 of the U.S. Bankruptcy Code and permitting Chrysler Credit to “proceed to recover possession of any and all collateral or other assets of the Debtor-in Possession (B.J.M., Jr., Inc.) which are subject to the lien of Chrysler Credit Corporation including but not limited to the inventory of new and used motor vehicles, fixtures, furniture and equipment and automotive parts. (N.T. 6/03/93, 33; 6/08/93, 89-90; Exhibit P-26) 67. Although the fact that B.J.M.’s business records were not intact may have somewhat diminished the value of. the franchise because B.J.M. could not produce its sales and service customer lists, the amount realized through the sale of the franchise in bankruptcy to the Sport Group was only some $8,000 less than would have been realized had B.J.M., Jr., Inc. sold it to the party with whom it had previously been negotiating, Armand Cadillac/Oldsmobile. (N.T. 6/08/93, 85-89, 181-187; 6/09/93, 26-27; Exhibit P-27) 68. In the course of the seizure of B.J.M., Jr., Inc.’s fixtures, equipment and furniture, Chrysler Credit Corporation seized a telephone system leased through the Century Leasing Co. and computer equipment leased through First People’s Bank of New Jersey. As of December 31, 1991, the balance due under the First People’s lease was $31,914.34 while $15,185.92 remained due and owing under the Century Equipment lease. (N.T. 6/08/93, 95-96; 6/09/93, 41-43; Exhibits D-38a, D-38b) 69. On April 3,1992, counsel for Chrysler Credit Corporation sent correspondence to the Lashingers, the Gambones, and the Har-veys (who were then principals in the corporation) and bankruptcy counsel for B.J.M., Jr., Inc. via certified mail, return receipt requested, notifying them that “the inventory of furniture, fixtures, equipment, goods, machinery, tools, parts and accessories which were repossessed from the B.J.M., Jr., Inc. dealership” would be sold at auction at the J. Omar Landis Auction Co., Apple and Robert Streets in Ephrata, Pennsylvania on April 11, 1992 at 8:30 a.m. With the exception of the Lashingers, who did not claim their notification letter, the Gambones and the Harveys received their notices on April 6, 1992. (Exhibit P-23) 70. Neither Justin or Carol Gambone nor Joseph Lashinger attended the auction nor did they or B.J.M., Jr., Inc send any representatives to attend the April 11, 1992 auction. (N.T. 6/09/93, 89-90) 71. B.J. Márchese, Jr. remained a stockholder/principal in B.J.M., Jr., Inc. until November, 1990 when he sold his remaining interest in the company to one John Godsey. Mr. Godsey, in turn, remained a principal in B.J.M., Jr., Inc. until May, 1991 when he defaulted on his obligations under his stock purchase agreement with B.J. Márchese, Jr. and Mr. Márchese resold the stock to Mary and Charles Harvey. Chrysler Credit Corporation, however, never requested or required that the Harveys execute personal guarantees on B.J.M., Jr., Inc.’s debts. (N.T. 6/08/93, 207-209) 72. On July 30, 1992, Judge Scholl entered an Order Approving, Ratifying and Confirming an Agreement of Sale of B.J.M., Jr., Inc.’s Jeep/Eagle franchise to RCP II, Inc., t/a the Sport Group for the sum of $408,000. Of that $408,000, $148,000 is payable directly to Chrysler Motors and $36,-122.50 is payable to B.J.M., Jr., Inc.’s bankruptcy counsel. (N.T. 6/03/93, 33-34, 43, 156-159; 6/08/93, 184-185; Exhibits P-24, P-27) 73. With the exception of the twenty-six new vehicles that were repurchased by the factory, Chrysler Credit Corporation had B.J.M., Jr., Inc.’s motor vehicle inventory auctioned at the Hatfield Auto Auction in Hatfield, Pennsylvania at a series of closed, dealers-only auctions. (N.T. 6/03/93, 94-97; 6/09/93, 6-9, 58-62, 153-156; Exhibit P-20) 74. Chrysler Credit Corporation did not give any notice, written or otherwise, to B.J.M., Jr., Inc. or any of its principals (including Lashinger and Gambone) of the times, dates and places of the auctions of its motor vehicle inventory, nor did it make any efforts to advertise the auctions. (N.T. 6/03/93, 94-99; 6/09/93, 5-7) 75. As a general rule, the best manner in which to dispose of motor vehicle inventory is to sell it at retail, and the second best manner is to dispose of the entire inventory at an open auction at the site. (N.T. 6/09/93, 7-9, 159-163) 76. Notwithstanding that Chrysler Credit Corporation auctioned B.J.M., Jr., Inc.’s motor vehicle inventory at a closed, dealers-only auction, the vehicles auctioned sold on the average for 110% of their average book value. (N.T. 6/09/93, 154-155, 165; Exhibit P-20) 77. Despite the results of the Hatfield auctions, there was a shortfall on B.J.M.’s floorplanned inventory (including the costs incurred in repossessing and liquidating the inventory) totalling $665,578.12. (N.T. 6/03/93, 39-41, 184-186) 78. The April 11, 1992 auction of B.J.M.’s furniture, fixtures and equipment was advertised as part of Omar Landis Company’s 19th Annual Equipment Auction through TNT, a national publication and through the posting of sales flyers. Although the advertising notices represented that the sale would include “a complete dispersal of two automotive dealerships — one Chrysler and one import,” All-Star Jeep/Eagle was not identified by name. (N.T. 6/07/93, 24-26; Exhibit D-47) 79. Some 2,000 people attended the April 22,1992 auction. B.J.M.’s phone system was sold for $95, the three safes were sold for $175 and the three computers were sold for a total of $30. The proceeds from the sale of all of the furniture, fixtures and equipment, after expenses, totalled $13,050.01, which sum was paid directly to Chrysler Credit Corporation. (N.T. 6/03/93, 39^1; 6/07/93, 26, 56-59; Exhibit P-21) 80. As a result of the parts inventory and the return of the repair parts from All-Star’s service department to the factory, Chrysler Credit has given B.J.M., Jr., Inc. a credit of $68,552.76 against its indebtedness. (N.T. 6/03/93, 41-42; Exhibits P-22, D-26) 81. On January 27, 1993, Chrysler Credit Corporation settled a claim made against it by the Internal Revenue Service for conversion of the IRS tax liens on the assets of B.J.M., Jr., Inc. as the result of its reclamation of the corporations’ collateral. Under the terms of the settlement, Chrysler Credit agreed to pay the sum of $80,000 to the IRS by no later than February 1, 1994. (N.T. 6/03/93, 45; 6/08/93, 65-68; Exhibit P-32) DISCUSSION In addition to the recitation of the foregoing facts, a brief overview of the rather protracted procedural history of this case would also appear to be a necessary pre-requisite to a thorough analysis of the legal issues raised by these parties. Following Chrysler Credit’s filing of its amended complaint on November 26, 1991 for breach of the terms of the Security and Master Credit Agreement, B.J.M., Jr., Inc., Mr. Lashinger and Mr. and Mrs. Gambone (hereinafter the “B.J.M. parties”) filed an answer denying all liability and raising as affirmative defenses (1) that plaintiff Chrysler Credit acted in bad faith and was negligent; (2) waiver; (3) failure to state a claim; (4) estoppel; (5) failure to join the Harveys as necessary parties; and (6) that they never knew of and plaintiff misled them as to the existence of the $2.2 million promissory note that B.J. Márchese executed on behalf of the corporation on May 6, 1988. The B.J.M. parties also filed a number of counterclaims at the time asserting: (1) that plaintiff Chrysler Credit prematurely declared a default; (2) that Chrysler Credit’s ill-managed credit program damaged their business; (3) that plaintiff failed, to remit withheld sales tax and titling fees; (4) that plaintiff tortiously interfered with the sale of the franchise and B.J.M.’s business; (5) that Chrysler Credit knew and permitted B.J.M., Jr., Inc. to be undercapitalized; and (6) lender liability for default. On March 9,1992, Chrysler Credit filed its answer to the B.J.M. parties’ counterclaims denying that it was liable under any of the theories alleged and raising the affirmative defenses of no duty owed, contributory negligence and failure to state a claim upon which relief could be granted. Additionally, Chrysler Credit submits that Messrs. Gambone and Lashinger do not possess the requisite standing to pursue these claims on behalf of the bankrupt corporation. Thereafter, on July 10, 1992, the B.J.M. parties filed suit in the Court of Common Pleas of Montgomery County, Pennsylvania against Chrysler Credit Corporation, George Tallant, Edward Muscara and its former landlord, PLS Properties/VMDT partnership alleging, inter alia, that those defendants unlawfully seized and converted B.J.M.’s assets, inventory, equipment and fixtures, causing severe property damage and loss and subjecting the B.J.M. parties to lawsuits by other creditors. That action was removed to this Court on July 30, 1992, assigned docket number 92-4490 and was subsequently consolidated with the original lawsuit at # 91-6996. PLS Properties was later dismissed from this action by stipulation of the parties. I. THE CLAIMS OF CHRYSLER CREDIT CORPORATION In essence, Chrysler Credit Corporation (or “CCC”) bases its complaint entirely upon the terms of the Master Credit and Security. Agreement which it made with B.J.M., Jr., Inc. in May, 1988 and May, 1991, (hereinafter “the credit and security agreement”). Pursuant to that agreement, plaintiff contends the parties agreed that CCC would' supply financing solely for the purpose of enabling B.J.M., Jr., Inc. to acquire motor vehicle inventory and that interest would begin accruing at the time each advance of credit was made. Chrysler Credit further notes that the agreement provides that, among other things, the failure to pay interest and/or the principal amount of an advance constitutes an event of default for which it, as the secured party, could take immediate possession of the vehicles financed without demand or legal process and could exercise all of its rights under the common or statutory law or the Uniform Commercial Code. Consequently, CCC asserts that under this agreement and the personal and continuing guarantees which Mr. Lashinger and Mr. and Mrs. Gambone gave on behalf of the defendant dealership, it is entitled to a judgment in its favor against the Gambones and Lashinger personally for the deficiency damages which it sustained on the sale of the motor vehicle inventory together with wholesale interest arrearages and expenses as the result of B.J.M.’s having breached the agreement by selling.vehicles “out of trust.” A. Creation of a Security Interest It is well-settled that under § 1201 of the Pennsylvania Uniform Commercial Code, the term “security interest” is defined generally as “an interest in personal property or fixtures which secures payment or performance of an obligation.” 13 Pa.C.S.A. § 1201. While the determination of whether a security interest exists initially depends upon the intent of the parties to the transaction, the question of intent is but one factor to be considered. Bonczek v. Pascoe Equipment Co., 304 Pa.Super. 11, 450 A.2d 75, 79 (1982). To create a security interest which is valid and enforceable against the debtor and third parties, three factors must coalesce: (1) the collateral must be in the possession of the secured creditor or the debtor must sign a security agreement which contains a description of the collateral, (2) value must have been given, and (3) the debtor must have rights in the collateral. Upon the completion of all of these steps, the security interest will be said to have “attached” and will then become enforceable against the debtor. Matter of Tressler, 771 F.2d 791 (3rd Cir.1985); Kendrick v. Headwaters Production Credit Association, 362 Pa.Super. 1, 523 A.2d 395, 397 (1987); Commonwealth v. Quigley, 344 Pa.Super. 607, 497 A.2d 257 (1985); 13 Pa.C.S.A. § 9203(a), (b). To withstand a challenge from other potential secured creditors, however, it is not enough for a security interest to merely have been attached — it must also be perfected. See, e.g.: In re Woolaghan, 140 B.R. 377, 386 (Bankr.W.D.Pa.1992). 13 Pa.C.S.A. § 9303(a) provides that “a security interest is perfected when it has attached and when all of the applicable steps for perfection have been taken.” Under §§ 9302, 9304 and 9401, most security interests are perfected by filing a financing statement in the office of the Prothonotary in the County where the debt- or’s place of business is located and in the Office of the Secretary of the Commonwealth. In the case of a security interest in fixtures, the financing statement must be filed in the office where a mortgage on the real estate would be recorded. Applying the preceding principles to the matter at bar, it is clear that in May, 1988 and again in May, 1991, B.J.M., Jr., Inc. gave Chrysler Credit a security interest in all of its inventory, chattel paper, accounts, contract rights, documents, instruments, consumer goods, general intangibles, equipment, fixtures and leasehold improvements, furniture, machinery, tools and inventory of automotive parts, accessories and supplies and that these security interests were recorded in both the office of the Secretary of the Commonwealth/State and in the office of the Montgomery County Prothonotary. Thus, this Court can reach no other conclusion but that Chrysler Credit Corporation has a perfected and hence a valid and enforceable security interest in everything outlined above but B.J.M.’s fixtures. B. Priority Among Conflicting Security Interests As was noted in Finding of Fact No. 13, in November, 1989 and again in November, 1990, Jr., Inc. also gave Madison Bank a security interest in all of its “property and assets, accounts, instruments, chattel paper, money, inventories, equipment, fixtures and all accessories, substitutions, and appurtenances thereto, documents, general intangibles, records, insurance policies and all cash and non-cash collateral.” While it is unclear whether the bank may have filed earlier or in the Office of the Secretary of the Commonwealth, Exhibit P-39 reveals that a financing statement reflecting this security interest was filed in the Office of the Montgomery County Prothonotary on November 16, 1990. Accordingly, a review of the law governing priority among creditors is necessary. As a general rule, a creditor with a perfected security interest in collateral has, under the Uniform Commercial Code, an interest therein which is superior to that of unsecured creditors. United States Fidelity & Guarantee Co. v. United Penn Bank, 362 Pa.Super. 440, 524 A.2d 958, 960 (1987); 13 Pa.C.S.A. § 9201. Where two or more creditors have perfected security interests in the same collateral, however, 13 Pa.C.S.A. § 9312(e) provides that generally, the party who filed his security interest first will have priority even if he knew that another party had a prior but unperfeeted claim. In re Southwest Pennsylvania Natural Resources, Inc., 11 B.R. 900, 902 (Bankr.W.D.Pa.1981). See Also: Bigelow-Sanford v. Security Peoples Trust Co., 304 Pa.Super. 167, 450 A.2d 154 (1982). This is not to say that there are no exceptions to the general first in time-first in right rule. Indeed, § 9312(c) gives a purchase money security interest in inventory priority over a conflicting security interest in the same inventory if: (1) the purchase money security interest is perfected at the time the debtor receives possession of the inventory; (2) the purchase money secured party gives notification in writing to the holder of the conflicting security interest if the holder had filed a financing statement covering the same types of inventory: (i) before the date of the filing made by the purchase money secured party; or (ii) before the beginning of the 21-day period where the purchase money security interest is temporarily perfected without filing or possession (section 9304(e)); (3) The holder of the conflicting security interest receives the notification within five years before the debtor receives possession of the inventory; and (4) the notification states that the person giving the notice has or expects to acquire a purchase money security interest in inventory of the debtor, describing such inventory by item or type. Sections 9312(a), (b) and (d), in turn outline still other exceptions for security interests in crops and purchase money security interests in goods other than inventory as well as for eases involving consignments and multiple state transactions. Finally, in the absence of a stated date for maturity, a financing statement remains perfected for a period of five years. Credit Alliance Corp. v. Jebco Coal Co., Inc., 688 F.2d 10, 12 (3rd Cir.1982); 13 Pa.C.S.A. § 9403(b). In the instant case, we find that Chrysler Credit Corporation’s security interest(s) clearly takes priority over those of the Madison Bank. Indeed, the record reflects that Chrysler Credit first filed its UCC-1 financing statements with both the Montgomery County Prothonotary and the Secretary of State’s Office on June 3,1988. (See Exhibits P-3 and P-4). On the other hand, while there is evidence that Madison Bank filed a UCC-1 financing statement evincing a security interest in all of B.J.M.’s property and assets with the Montgomery County Protho-notary on November 16, 1990, there is no evidence that a UCC-1 was filed with the Secretary of State’s office. It therefore does not appear to this Court that Madison Bank properly perfected its security interest. C. Default Although “default” triggers the secured creditors’ rights under Part 6 of Article 9 of the Uniform Commercial Code, nowhere does Article 9 define the word. Instead it leaves this to the parties and to any scraps of common law lying around. Apart from the modest limitations imposed by the unconscionability doctrine and the requirement of good faith, default is whatever the security agreement says it is. J. White & R. Summers, Uniform Commercial Code, § 26-2, 1085-1086 (2nd Ed.1980). Notwithstanding the silence of the Code on what constitutes a default, Sections 9501, 9502, 9503, 9504, 9505 and 9506 delineate the rights and remedies which are available to the parties should a default occur. Generally speaking, under Article 9 of the Code, upon default the secured party can: (1) obtain a judgment on the debt; (2) repossess and sell the collateral or (3) repossess and retain the collateral in satisfaction of the debt. Midlantic Commercial Leasing Corp. v. Architectural Shapes, Inc., 1990 WL 42257 (E.D.Pa.1990); 13 Pa.C.S.A. §§ 9501, 9504 and 9505. Section 9501 states, in pertinent part that “(a) when a debtor is in default under a security agreement, a secured party has the rights and remedies provided in this chapter and, except as limited by subsection (c), those provided in the security agreement. He may reduce his claim to judgment, foreclose or otherwise enforce the security interest by any judicial procedure ...” Section 9501(b) in turn provides that “after default, the debtor has the rights and remedies provided in this chapter, those provided in the security agreement and those provided in section 9207.” Of course, Section 1-203 of the Code, 13 Pa.C.S.A. § 1203 states that “[e]very contract or duty within this title imposes an obligation of good faith in its performance or enforcement.” Good faith, in turn, has been defined as honesty in fact in the conduct or transaction concerned. Lichtenstein v. Kidder, Peabody & Co. Inc., 777 F.Supp. 423, 427 (W.D.Pa.1991). Pursuant to Sections 9502-9505, the secured party has the option of notifying account debtors of the debtor to make payments directly to the secured creditor, of taking possession of the collateral (either with or without legal process), of accepting the collateral in discharge of the debtor’s obligation, or of disposing of the collateral and applying the proceeds of the sale toward satisfaction of the debt. In those cases where the secured party-elects to seize possession of the collateral and then dispose of it with an eye toward applying the proceeds from the sale against the debt, the secured party becomes subject to the requirements set forth in Section 9504(c) governing the manner of disposition of the collateral. United States on behalf of Small Business Administration v. Gore, 437 F.Supp. 344, 347 (E.D.Pa.1977). To be sure, that section dictates: Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, if he has not signed after default a statement renouncing or modifying his right to notification of sale. In the case of consumer goods, no other notification need be sent. In other cases notification shall be sent to any other secured party from whom the secured party has received (before sending his notification to the debtor or before renunciation by the debtor of his rights) written notice of a claim of an interest in the collateral. The secured party may buy at any public sale and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations he may buy at private sale. As a threshold matter under § 9504(c) then, the secured creditor must: (1) give reasonable notice of the sale of the collateral to the debtor; and (2) act in a commercially reasonable manner in disposing of the collateral. The questions of what constitutes proper notice and commercial reasonableness are often posed and, although there are no hard and fast rules, certain basic principles apply. For one, it is well-recognized that the purpose underlying the requirement that the debtor receive notice of the disposition of the collateral is not merely to advise him of the termination of his title and his redemption rights but also to protect him from the unfair imposition of a deficiency claim by allowing him to attend or bring other potential buyers to the sale thereby preventing a disposition of the collateral for less than its fair market value. In re Koresko, 91 B.R. 689, 698 (Bankr.E.D.Pa.1988). Second, the Pennsylvania Uniform Commercial Code provides that a person has notice and/or notification of a fact when: (1) he has actual knowledge of it; (2) he has received a notice or notification of it; or (3) from all the facts and circumstances known to him at the time in question, he has reason to know that it exists. Stated otherwise, a person “notifies” or “gives” a notice or notification to another by taking such steps as may be reasonably required to inform the other in the ordinary course whether or not such other actually comes to know of it. A person “receives” a notice or notification when (1) it comes to his attention; or (2) it is duly delivered at the place of business through which the contract was made or at any other place held out by him as the place for receipt of such communications. Reuter v. Citizens & Northern Bank, 410 Pa.Super. 199, 599 A.2d 673, 678 (1991); 13 Pa.C.S.A. § 1201. Hence, while oral notice or notice by word of mouth has been held patently insufficient, where the record contains a mail receipt evincing that written notice was sent by mail to the debtor’s office address, reasonable notification will be found to have been given. In re Koresko, supra; Continental Bank v. Schaler, 362 Pa.Super. 610, 525 A.2d 388, 390-391 (1987). Finally, it should be noted that under Pennsylvania law, a “guarantor” of a debt is a “debtor” within the meaning of Division 9 of the Uniform Commercial Code. As such, when collateral is to be sold, a guarantor is entitled to the same notice pursuant to Section 9504(c) as is the debtor. Reuter v. Citizens & Northern Bank, supra, 599 A.2d at 677, citing Ford Motor Credit Co. v. Lototsky, 549 F.Supp. 996, 1003 (E.D.Pa.1982). See Also: Central W. Rental Co. v. Horizon Leasing, 967 F.2d 832, 839 (3rd Cir.1992). The issue of commercial reasonableness is somewhat more problematic and, to a large extent, more frequently resolved on a case by case basis. Although it has been said that when a creditor decides to liquidate a debtor’s assets^ it must act as the debtor’s fiduciary and make a sincere effort to obtain the full market value for the property, the fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the secured party is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. U.S.A on Behalf of Small Business Administration v. Chatlin’s Department Store, Inc., 506 F.Supp. 108, 111 (E.D.Pa.1980); United States on Behalf of Small Business Administration v. Gore, supra, at 347; 13 Pa.C.S.A. § 9507(b). Moreover, while it is up to the creditor to rebut the presumption that the value of the collateral equalled the indebtedness secured once the issue of commercial reasonableness has been raised, under Section 9507(b) of the Code, “if the secured party either sells the collateral in the usual manner in any recognized market therefor or if he sells at a price current in such market at the time of his sale or if he has otherwise sold in conformity with reasonable commercial practices among dealers in the type of property sold he has sold in a commercially reasonable manner.” See Also: Chatlin’s, and Gore, both Id. Additional factors such as the setting of an evaluation figure without an independent appraisal, any disparity between price received at an auction and the estimated value of the assets, and the good faith, avoidance of loss and effective realization of the seller/secured party are all relevant in considering the commercial reasonableness of the sale of collateral. In re Auer v. Equibank, 103 B.R. 700, 703 (Bankr.W.D.Pa.1989); Chatlin’s, supra at 112; Reuter, supra, 599 A.2d at 680. Viewing this case in light of the foregoing standards, we initially note that the Security Agreement and Master Credit Agreement at issue here defines default as occurring upon, inter alia, the debtor’s “fail[ure] to make any payment to Secured Party ... when and as due in accordance with the terms of this Agreement ...,” the filing of “a tax lien or notice thereof against any of the debtor’s property,” or the institution of “a proceeding in bankruptcy, insolvency or receivership by or against [the debtor or his property,” or the making of “an assignment ... by [the] debtor for the benefit of creditors ...” Paragraph 6.0(a) and (b). The said Security Agreement further states: that “upon the occurrence of an event of default, Secured Party may take immediate possession of said vehicles [i.e., B.J.M.’s inventory] without demand or further notice and without legal process; and for the purpose and furtherance thereof, Debtor shall if Secured Party so requests, assemble the vehicles and make them available to Secured Party at a reasonably convenient place designated by Secured Party and Secured Party shall have the right and Debtor hereby authorizes and empowers Secured Party to enter upon the premises wherever said vehicles may be, to remove same. In addition, Secured Party or its assigns shall have all the rights and remedies applicable under the Uniform Commercial Code or under any other statute or at common law or in equity or under this Agreement. Such rights and remedies shall be cumulative. Debtor hereby agrees that it shall pay all expenses and reimburse Secured Party for any expenditures, including reasonable attorney’s fees and legal expenses, in connection with Secured Party’s exercise of any of its rights and remedies under this Agreement.” It is therefore obvious from the language of the foregoing paragraph that B.J.M., Jr., Inc.’s failure to promptly pay Chrysler Credit Corporation the principal and interest due upon the sale of a floor-planned, financed vehicle thereby resulting in a “sold-out-of-trust” condition constituted a default under the Security and Master Credit Agreement (Exhibit P-13) and was sufficient to trigger Chrysler Credit’s available remedies under the Pennsylvania Uniform Commercial Code. On November 8, 1991, Chrysler Credit Corporation orally declared B.J.M. to be in default of the Security and Master Credit Agreement. In this case, Chrysler Credit Corporation elected the remedy available to it under 13 Pa.C.S.A. §§ 9503 and 9504 and paragraph 6.0 of the Security Agreement — it took possession of the collateral, disposed of it and applied the proceeds toward repayment of B.J.M., Jr., Inc.’s debt to it. The record evidence in this matter clearly reflects that while Chrysler Credit sent written notice on April 3, 1992 to B.J.M., Jr., Inc., the Gambones, Harveys and Lashingers of the April 11, 1992 auction of the dealership’s furniture, equipment, fixtures, etc., it did not give any notice whatsoever of the auction dates for the dealership’s motor vehicle inventory to the B.J.M. parties. As a consequence, this Court must conclude that Chrysler Credit failed to comply with the notice requirements of 13 Pa.C.S.A. § 9504(c) with respect to the sale of the motor vehicle inventory. Turning next to the issue of commercial reasonableness first as to the sale of the inventory and then as to the sale of the fixtures, furniture and equipment, we observe that conflicting expert testimony was presented by the parties on the reasonableness of the sale of the inventory. Justin Gambone, testifying as an expert witness on behalf of the B.J.M. parties, opined that the vehicles were not sold in a manner which was commercially reasonable inasmuch as they were sold off-site at a Chrysler-controlled, dealers-only auction at wholesale prices. According to Mr. Gambone, the best way to dispose of the dealership’s inventory would have been to sell the vehicles on the dealership’s premises at retail to the general public. Alternatively, the vehicles could have been sold on-site at an open auction. Either of these sales methods, in Mr. Gambone’s opinion, would have resulted in a higher recovery on B.J.M.’s inventory. (N.T. 6/09/93, 6-9) Mr. Gambone, however, did not testify that the inventory (which was sold at an area auto auction) was sold in a fashion that was contrary to the usual manner of-disposition in an unusual market or to parties who did not deal in the type of property sold nor did he testify as to how much more Chrysler Credit could have realized on the sale of the inventory had the vehicles been sold in the manner which he had advocated. For its part, Chrysler Credit Corporation presented the expert testimony of Lawrence Bideau, who has been employed as one of its marketing specialists for the past seven years. Although, Mr. Bideau essentially agreed with Mr. Gambone’s testimony that a better method of disposition would be to auction off-site to the general public, in his experience, Chrysler Credit has always sold repossessed vehicles at dealer-auctions and they usually get more for the vehicles when they sell at a Chrysler-dealers only auction. In this case, Mr. Bideau further testified, Chrysler Credit Corporation sold B.J.M.’s used car inventory (i.e. all of those vehicles which the factory would not buy back) for some 110% of average book value. (N.T. 6/09/93, 163-164) It was therefore Mr. Bideau’s opinion that the sale of B.J.M., Jr., Inc.’s motor vehicle inventory was commercially reasonable. In reconciling these testimonial conflicts between what are clearly two interested witnesses, we nevertheless find that the auctions of the vehicles did fall within the confines of commercial reasonableness. Indeed, while it is true that Chrysler Credit could have selected an alternative method of sale, there is simply no evidence that the dealers-only auction method utilized did not conform to reasonable commercial practice