Clayton’s Skate Shop (Clayton's) had a line of credit with Columbia Bank that financed its inventory of skateboards. The line of credit was secured by all of Clayton's inventory and perfected by a UCC-1 filing. Clayton’s business dried up after the City Council voted to forbid skateboarding. Doug’s Boarding Paradise (Doug’s) in Jefferson City was thriving. Doug’s, after hearing of Clayton’s troubles, bought all of Clayton’s inventory right before Clayton’s went out of business. Derek wanted to learn how to skate and bought a brand new skateboard at Doug’s for $500 (the board was originally inventory from Clayton’s). Assume that the Security Agreement between Clayton’s and Columbia Bank did not allow Clayton’s to sell its inventory without Columbia Bank's consent when Clayton's knew it was going out of business. Which statement is correct?
1. Columbia Bank still has a perfected security interest in the board and may recover possession of the board from Derek if he does not satisfy Clayton's debt to Columbia Bank
2. Columbia Bank still has a perfected security interest in the board because Derek was not a buyer in the ordinary course of business
3. Derek took the board free of Columbia Bank's security interest because the transaction between Derek and Doug's met the garage sale exception.
4. Derek took the board free of Columbia Bank's security interest because Derek was a buyer in the ordinary course of business
5. Derek took the board free of Columbia Bank's security interest because Doug’s was a buyer in the ordinary course of business when it bought Clayton’s inventory