Franklin v. Commonwealth Financial Corp. (In re Franklin)

REINHARDT, Circuit Judge:

Over 1981 and 1982, Gus Franklin d/b/a Allied Tree Enterprises (“Allied”) borrowed approximately $580,000 from Common*537wealth Financial Corporation (“Commonwealth”), a commercial lender. For security, in June 1981 Commonwealth obtained an interest in all of Allied’s property, including accounts receivable, inventory, and equipment, with Franklin’s personal guarantee of Allied’s indebtedness. The amount of credit extended was based on a percentage of the accounts receivable securing the loans. In June 1982, Commonwealth also obtained a security interest in Franklin’s…