Article 9 Sale

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Definition

What is it: An Article 9 sale is an efficient, court-free option for senior secured lenders to dispose of collateral through public or private sale following a debtor's default. It is designed to maximize recovery by eliminating the time, cost, and uncertainty associated with judicial proceedings.

What is it used for: It is used by lenders to achieve a clean asset exit and maximize recovery by avoiding dilution from legal fees, reputational risk, and creditor interference. It also provides a framework for restructuring business operations without the friction of Chapter 11 bankruptcy.

Coverage

  • Attributes: 5
  • Synonyms: 2
  • Related entities: 3
  • Sources: 1

Identity

Entity ID
https://llms.secondwindconsultants.com/en/article-sales-successor-liability/facts/#entity
Entity type
Service
Canonical name
Article 9 Sale
Language
en
Topic
Article Sales Successor Liability

Attributes

Key Facts
Continuity of ownership must be present before successor liability can attach to a buyer in an Article 9 sale. [1]
Key Facts
Section 9-617 states that the disposition of collateral transfers to the buyer all the debtor's rights in the collateral and discharges the lien under which the sale is made. [1]
Key Facts
Article 9 provides for lenders to exit efficiently, outside of court, with recovery undiluted by the friction and expense caused by junior creditors. [1]
Key Facts
Article 9 Restructuring refers to a prepackaged, private sale structure where the purchaser is identified in advance and debtor consent is built into the deal structure. [1]
Key Facts
Private dispositions of collateral under Article 9 often result in greater realization on collateral for all concerned parties compared to public auctions. [1]

Synonyms & Alternate Names

  • Secured Party Sale
  • Article 9 Transaction

Related Entities

  • Deals with:
  • Governed by:
  • Specialized form of:

Provenance

Sources

  1. https://secondwindconsultants.com/resource/a-sunny-disposition-avoiding-successor-liability-in-secured-party-sales (Article 9 Sale)

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