Secured Lending Transactions: Identifying Property the Debtor Does Not Own, Dealing with Restrictions on Assignment
Interpreting Best Efforts, Ordinary Course, Business Judgment, Reasonable Discretion
About the Course
Introduction
This CLE webinar will discuss drafting and interpreting exclusions from collateral for assets that are subject to restrictions on being pledged by the loan parties. Our faculty will also discuss the Article 9 rules that override restrictions on assignment.
Description
Most commercial lenders expect to obtain a security interest in all of a borrower’s assets, but often there are unanticipated problems. Importantly, some significant assets are likely to be subject to a legal or contractual restriction on assignment, and that restriction might impede attachment of enforcement of a security interest. Additionally, some assets are leased or licensed from third parties, or may be owned by third parties. Some assets are also subject to governmental licenses and permits that restrict the rights of a borrower.
This webinar will help attendees identify property of the debtor with restrictions or exclusions on the debtor’s ability to assign or grant a security interest and share drafting strategies to address transfer restrictions and exclusions. The program will delve into Article 9 rules that override restrictions on assignment, explaining to what assets the rules apply, to what assets the rules do not apply, and the extent upon which the rules can be relied.
Listen as our authoritative panel explores these issues and more, highlighting common traps and the due diligence and drafting techniques to avoid them.
Presented By
Mr. Chiu’s practice focuses on commercial financing, including specialties in secured transactions and leveraged finance. He is the UCC Committee Co-Chair of the Joint Task Force of Security Interests in LLC and Other Unincorporated Entity Interests of the American Bar Association Business Law Section.
Mr. Grodner's practice focuses primarily on commercial transactions, secured transactions, commercial finance, opinion letters, commercial real estate and gaming law. He has an extensive practice representing lenders in large commercial transactions, locally, regionally and nationally. He authored or co-authored articles dealing with secured transactions, commercial real estate and other business law issues, and also presented on issues concerning loan documentation, secured transactions, ethics and professionalism in the transactional context and real estate law.
Mr. Schulwolf is a partner in Shipman's Business and Corporate Practice Group. He focuses his practice on advising clients in financing, investment, acquisition, and restructuring transactions. In the Finance sector, Mr. Schulwolf regularly represents financial institutions including banks, mezzanine funds, and other institutional investors in structuring, documenting, and closing complex senior and mezzanine financings, including mezzanine financings with equity co-investments. He regularly represents lenders in connection with acquisition financings, financing of alternative energy projects (including wind, solar, and fuel cell projects), asset-based loans, cash flow loans, and syndicated credit facilities and he also represents Shipman's corporate clients and private equity portfolio companies in their financing transactions.
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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, August 26, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. Identifying property subject to restrictions
A. Licenses and leases from third parties, such as software, intellectual property, franchise agreements, and the like.
B. Governmental licenses and permits
C. Other contracts, like operating agreements, construction contracts, etc.
D. Joint ventures/partnerships/trusts
E. Consignments
F. Commingled goods
II. Dealing with restrictions on transfer
A. Legal restrictions
B. Contractual restrictions
C. UCC overrides
D. Caveats
The panel will review these and other questions:
- What are the traps for the unwary in exclusions from collateral for assets that are subject to restrictions on assignment or security interests?
- What are the Article 9 rules that override restrictions on assignment?
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