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Secured Claims
A Series on the ABCs of ABCs, when it comes to claims there’s a plethora of them. From secured to unsecured, to bankruptcy and trade. Read all the basics in this installment of Dealing with Corporate Distress. This Installment covers how to protect you claim in a bankruptcy case.
What are the legal remedies available under Article 9 of the UCC to a lender whose loan is secured by the personal property of a borrower who is in default? How can these legal remedies can be implemented in practice?
When a borrower defaults on its loan agreements, a lender may, among other options, sue to foreclose on its collateral and collect from the borrower. The lender, however, may instead agree to amend the loan documents or enter into a loan forbearance agreement. If the borrower can convince the lender that, within a reasonably short time, it can cure the defaults and perform or observe such new conditions as the lender may require in exchange for waiting, a loan forbearance agreement memorializing such new arrangements may be entered into by […]
Considering making a secured loan? The DailyDac Editors give key insight to becoming a secured creditor, and what to identify about distressed borrowers.
A Series on the ABCs of ABCs, when it comes to claims there’s a plethora of them. From secured, to unsecured, to bankruptcy, and trade. Read all the basics in this installment of Dealing with Corporate Distress.
Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it. Question Tom S. wrote in asking, I am a hard money lender and have loaned on all sorts of collateral, but I’ve never loaned on raw land before. A builder wants to pledge some land as collateral. What special risks does raw land collateral pose to a lender? Answer Raw land is often inventoried by developers and is usually in some […]
Understanding the Right to Credit Bid After Radlax [Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it.] Question A private equity investor wrote in recently asking us to address credit bidding in the aftermath of Radlax. Answer For investors who are unfamiliar with the concept, the right to credit bid is the “right of the secured creditor under the Bankruptcy Code to use its secured claim against a […]
Creative Destruction and an Inevitable Fall: What Can We Learn From the Penthouse Magazine Bankruptcy? Penthouse International, publisher of Penthouse Magazine, sold for $11.2 million in June of 2018. The company was worth about $700 million (adjusted for inflation) at its height. The latest Penthouse Magazine bankruptcy highlights just how far Penthouse has fallen, and what lessons can be learned regarding bankruptcy in general. The New Owner The buyer was WGCZ, which also owns XVideos.com and Bangbros.com. XVideos, in turn, functions as an aggregator (just as YouTube is an aggregator […]
What Happens When Your Consignee Becomes Distressed and What You Can Do I was speaking with a client yesterday about consignment arrangements. What we discussed should be of interest to any company that sells goods using a consignment arrangement, and I thought I would share. What is a Consignment Arrangement? In a consignment arrangement, the consignor, as owner of the goods, delivers them to a consignee. The consignee, in turn, will try to sell those goods to customers. Be Careful Not to Mischaracterize the Proceeds You Expect from a Consignment […]
The Battle Over Post-Petition Interest for Oversecured Creditors In bankruptcy, an oversecured creditor (in which the value of its collateral is higher than its claim) is first in line to be paid. Unfortunately, oversecured creditors are also entitled to post-petition interest (interest that accrues or would accrue after the start of bankruptcy proceedings, regardless of whether or not it is allowed in the proceeding). As a debtor who successfully increases the value of the asset/collateral—how do you alleviate an increased claim and maintain liquidity? And what say does the secured […]