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Lender repossessed Debtor's construction equipment after default. Debtor owed Lender $120,000. Lender spent $6,000 in reasonable repossession, storage, and sale expenses. Junior Creditor had a subordinate security interest in the same equipment and sent Lender an authenticated demand for proceeds before the sale. Lender sold the equipment in a commercially reasonable public auction for $150,000. One hour before the auction began, Debtor offered to pay only the missed installments, not the accelerated balance or Lender's expenses. Lender refused the offer and proceeded with the sale.
After the sale, Lender applied $6,000 to expenses and $120,000 to the debt, but kept the remaining $24,000. Debtor claims the $24,000 surplus. Junior Creditor claims the surplus should be paid to it before Debtor receives anything. Debtor also argues that Lender wrongfully refused redemption before the auction.
Discuss how the sale proceeds should be applied, whether Debtor or Junior Creditor is entitled to the remaining proceeds, and whether Debtor made an effective redemption tender.