Lenders’ Alternative Liquidation Strategies for Defaulted Loans Secured by Personal Property
Author: Theodore A. Cohen .
Source: Volume 25, Number 03, January/February 2012 , pp.29-42(14)
< previous article |next article > |return to table of contents
Abstract:
There are several judicial and non-judicial mechanisms a lender can use to liquidate or otherwise dispose of its collateral on loans secured primarily by personal property. This article describes, compares, and contrasts the different mechanisms—voluntary wind-down and surrender of collateral, assignment for the benefit of creditors, private or public UCC Article 9 foreclosure sale, lawsuit for claim and delivery/replevin, receivership and Bankruptcy Code Section 363 sale—with particular emphasis on the benefits and risks of each, and suggests when each is likely to be most useful.Keywords: assignments for the benefit of creditors; Bankruptcy Code Sec. 363 sales; distressed asset sales; UCC foreclosure sales; workout strategies; liquidation strategies; collateral liquidation by lender
Affiliations:
1: Sheppard, Mullin, Richter & Hampton LLP.