This section contains the nature of the case and procedural background.

Wright and Hancock formed Oxygen, Inc. and each owned 50% of the stock. Eventually, there was a falling out and an agreement was entered into to buy out Hancock. There was a note for $1,440,085, and monthly payments were to be $20,661 for ten years. The note was secured by all the assets of Oxygen and was properly perfected. Subordination was given to NCNB for accounts receivable, inventory and equipment. Eventually, four years later, Oxygen filed for bankruptcy. The issue was the validity of the note and the underlying security agreement.

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