UCC Foreclosures: Overcoming Obstacles to the Sale and Evaluating Receivership and Bankruptcy Alternatives

Secured creditors face challenges protecting their interests if a loan defaults. Practitioners and their clients must evaluate foreclosures, loan workouts, and other pre-bankruptcy solutions to determine whether they are preferable to a bankruptcy to protect the lender's interests.

While the secured creditor may obtain a recovery if its debtor becomes subject to a bankruptcy case, a foreclosure under UCC Article 9 may often produce a better recovery. When appropriate, foreclosure under UCC Article 9 is quicker, less expensive, and more predictable than a Bankruptcy Code Section 363 sale. Other alternatives include a receivership in aid of foreclosure or an assignment for the benefit of creditors.

The UCC Article 9 foreclosure process contains pitfalls and obstacles for creditors, but with careful planning, counsel can overcome these issues and minimize the risks. Counsel can also consider other alternatives to achieve for the secured creditor the same or possibly an even better result.

Listen as our authoritative panel of secured transaction specialists offers its perspective on foreclosure under UCC Article 9, including how to avoid unexpected difficulties that arise with such sales. The panel will also compare UCC Article 9 sales to other alternatives, including receiverships in aid of foreclosure, assignments for the benefit of creditors, and bankruptcies.