Velvet Brown fell madly in love with George and quickly moved in with him, bringing along her many dogs and cats, and of course her beloved horse, Pie. But, Velvet quickly figured out why George had been a bachelor all these years, and when she had finally had enough of him, she put the dogs and cats in the car and took off. Since she had no way to transport Pie, and nowhere to transport him to, she left him at George’s farm temporarily.

After she left George, Velvet struggled financially, eventually stooping so low as to borrow $2,500 from Old Man Potter, the richest (and meanest) man in town. The only thing Velvet owned that was of any value was Pie, so she offered the horse to Potter as collateral for the loan. Potter promptly sent George a letter to notify him of his security interest in the horse, but George just tossed the letter into the trash.

While they were still together, Velvet had borrowed money from George too, and when she did not repay him on time, he went to small claims court and got a judgment against her for $2,500. Acting upon a properly executed writ, the sheriff took possession of Pie and sold the horse for $2,000.

When Potter learned of the sale, he contacted the sheriff’s department and was livid when he learned that sheriff intended to deliver the sale proceeds to George. Which of the following explanations best summarizes Potter’s position vis-à-vis the proceeds from the sale of the horse?

a) Potter is not entitled to the $2,000 because he was obligated to file a financing statement covering the horse.

b) Potter is entitled to the $2,000 because a security interest in collateral continues notwithstanding sale or other disposition.

c) Potter is not entitled to the $2,000 because sending the letter to George was not sufficient to perfect his security interest

d) Potter is entitled to the $2,000 because sending the letter to George was sufficient to perfect his security interest