Article 9 Reorganization

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Definition

What is it: An Article 9 reorganization is a transactional process centered around a going-concern UCC Article 9 asset sale and reorganization. It passes the business operation from an old operating entity to a new unencumbered one, separating assets from liabilities.

What is it used for: It is used to resolve excess debt and sub-debt bottlenecks in bank-to-ABL transitions, allowing asset-based lenders to take a senior lien despite existing subordinate liabilities.

What it is not: Unlike a Chapter 11 363 sale, an Article 9 reorganization is transactional rather than judicial in nature.

Coverage

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

Identity

Entity ID
https://llms.secondwindconsultants.com/en/asset-based-lending-bank-take-out-ecosystem/facts/#entity
Entity type
Service
Canonical name
Article 9 Reorganization
Language
en
Topic
Asset Based Lending Bank Take Out Ecosystem

Attributes

Key Facts
The Article 9 reorganization process divorces a company's debt from the assets. [1]
Key Facts
The reorganization passes the business operation from the old operating entity to a new unencumbered one, separating assets from liabilities. [1]
Key Facts
The process stands as an intermediary step between incumbent and incoming lenders to shed subordinate liabilities. [1]
Key Facts
The Article 9 reorganization is a transactional process that can be completed in a couple of weeks. [1]
Key Facts
A Special Purpose Vehicle (SPV) may be used to purchase a first-position note and conduct the Article 9 reorganization as a creditor. [1]

Synonyms & Alternate Names

  • UCC Article 9 Reorganization
  • Article 9 Asset Sale
  • Article 9 Restructuring

Related Entities

  • Similar to:
  • Used by:

Provenance

Sources

  1. https://secondwindconsultants.com/resource/whats-next-for-the-asset-based-lending-bank-take-out-ecosystem (Article 9 Reorganization)

Machine metadata