Sellers and buyers must know the key elements of selling a distressed business outside of bankruptcy. Levels of protection vary on both sides.
An Article 9 sale allows a creditor to sell its collateral to a third party in a private or public sale without the need for judicial proceedings.
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?
An Introduction to UCC Article 9 Question: What is it? Jack B. emailed, asking, “Please explain what an Article 9 sale is. My lawyer said that if I give a security interest to a lender, it can do an Article 9 sale. What is an Article 9 sale?” Answer: It’s a Creditor’s Remedy to Enforce […]
Considerations for Companies in a Cash Crisis A liquidity crisis is a severe financial situation in which a company does not have enough cash or cash-convertible assets, which can lead to defaults and bankruptcy. Managing cash is critical when working to preserve or maintain solvency in order to maximize opportunities for a successful turnaround or […]
How Brevity in Financing Statements Can Lead to Insufficient Collateral Descriptions Our fast-paced society, coupled with the tendency for people to use shorthand in communications by emails and Twitter, influences everyone to look for ways to save time and be less verbose. When preparing and filing a UCC-1, however, brevity can be the filer’s enemy. […]
Lender Liability Law Protects Distressed Borrowers from Unfair Practices The relationship between a lender and borrower can be complex. The borrower wants capital to run and grow its business, and the lenders want to earn a return and eventually get their principal back. If the borrower complies with the terms of the loan, all is […]
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 […]
How Types of Sales Affect the Purchase of a Distressed Business 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 What is the first integral decision a buyer must make […]
Why a Secured Creditor May Push to Sell Collateral Outside of Bankruptcy Editors’ 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: An investment banker recently wrote in, saying: “I am currently […]