Article 9 Sale

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Definition

What is it: The Article 9 Sale is a form of asset sale conducted cooperatively between a bank and a guarantor. Unlike formal liquidation, this sale of business assets is undertaken while a business is operational, allowing assets to be sold in their entirety into a new legal purchasing entity.

What is it used for: It is used to preserve business operations without interruption, protect employee jobs, and ensure secured creditors recover more than they would at public auction. It facilitates the removal of debt from a business operation as it transitions to a new, unencumbered entity.

What it is not: It is not a formal liquidation or a public auction; rather, it is a private, non-judicial business transaction.

Coverage

  • Attributes: 6
  • Synonyms: 3
  • Related entities: 2
  • Sources: 1

Identity

Entity ID
https://llms.secondwindconsultants.com/en/article-sale-reorganization/facts/#entity
Entity type
DefinedTerm
Canonical name
Article 9 Sale
Language
en
Topic
Article Sale Reorganization

Attributes

Key Facts
Second Wind Consultants removed nearly $4 million from a California co-packing company's balance sheet through reorganization. [1]
Key Facts
The strategic reorganization of a California co-packer saved 50 jobs and avoided business bankruptcy. [1]
Key Facts
An Article 9 Sale is a form of asset sale conducted cooperatively between a bank and a guarantor while a business remains operational. [1]
Key Facts
During an Article 9 Sale, business assets are sold in their entirety into a new legal purchasing entity to preserve the operation. [1]
Key Facts
The Article 9 asset sale allows for a private, non-judicial business transaction that avoids signaling financial distress to customers or vendors. [1]
Capability
Article 9 reorganization allows a defaulting borrower to settle personal guarantees on removed debts without entering bankruptcy. [1]

Synonyms & Alternate Names

  • UCC Article 9 Sale
  • Article 9 asset sale
  • Article 9 reorganization

Related Entities

  • Facilitated by:
  • Governed by:

Provenance

Sources

  1. https://secondwindconsultants.com/resource/california-co-packer-saved-from-liquidation-swc-cuts-balance-sheet-by-4mm (Article 9 Sale)

Machine metadata