Equity Interests as Collateral: Creating and Enforcing Security Interests in Equity of Corporations, Partnerships, and LLCs
Planning and Documentation Issues, Avoiding Potential Pitfalls in Perfecting Security Interests
About the Course
Introduction
This CLE course will guide commercial finance counsel on how to document a security interest in corporate stock, partnership interests, and LLC interests, how to properly perfect and ensure priority of such security interests, and how to evaluate and pursue enforcement remedies in the event a borrower defaults.
Description
Equity interests—including corporate stock, partnership interests, and LLC interests—are common forms of collateral in commercial loan transactions. Using equity interests as collateral presents challenges due to unique planning and documentation issues, including consideration of securities laws, entity statutes, contracts among the equity owners, and UCC provisions specific to investment property.
In addition, enforcing security interests in equity interests can be difficult, mainly where pre-closing diligence for the secured loan, and the terms of the transaction documents do not accommodate these unique issues.
Listen as our panel of finance practitioners provides best practices for advising lenders holding equity interests as collateral in commercial loans. The panelists will offer their perspectives and experiences on the potential pitfalls in creating and perfecting security interests. They will also provide strategies for pursuing strict foreclosure, public or private foreclosure sales, or other possible remedies.
Presented By
Mr. Cochran has extensive experience advising clients in workouts and restructurings involving complex collateral packages and multiple jurisdictions. He represents lenders in mezzanine loan transactions and other sophisticated commercial real estate financings, and has acted for lenders and other stakeholders in various bankruptcy matters, including DIP financings, section 363(f) sales and claims transfers.
Mr. Smith concentrates his practice in commercial law, debt financings, structured financings, workouts, bankruptcies, and international transactions. He is particularly knowledgeable on commercial law and insolvency matters, both domestic and cross-border. His representations have included those in major bankruptcies including Lehman and the City of Detroit. Mr. Smith often advises financial institutions on documentation and risk management issues.
Mr. Weise practices in all areas of commercial law and has extensive experience in financing, especially in those secured by personal property, including structured financing. He is regarded as one of the foremost authorities on Article 9 of the UCC. He is a member of the Permanent Editorial Board for the UCC and a member of the American Law Institute’s UCC Article 9 Drafting Committee. Mr. Weise is also the past chair of the American Bar Association’s Business Law Section Legal Opinions Committee.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Wednesday, November 18, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. Common types of equity interests
A. Stock
B. Partnership and LLC interests
II. Perfecting and ensuring priority of security interests in equity interests
III. Lender remedies upon default
A. Strict foreclosure
B. UCC Section 9-610 sale
C. Other options
The panel will review these and other key issues:
- What challenges may arise when borrowers seek to use equity interests as collateral for commercial loans?
- What steps should lenders' counsel take to avoid common pitfalls in creating and perfecting security interests in corporate stock, partnership interests, and LLC interests?
- What remedies are available to lenders under the UCC upon default on a loan secured by equity interests?
