Borrowers should ensure that they have left enough time to meet all warranty and perfection requirements. While a bank of agents can obtain the shortest possible time, the borrower should make its own assessment of the time required and allow unforeseen circumstances that could lead to delays. The borrower should, for example. B, take into account the time it takes to search for stock certificates or debt securities, obtain releases from third parties whose debts have been long repaid, and negotiate control agreements with custodian banks and securities intermediaries. In particular, cross-border transactions generally have significant closing schedules, which have been vehemently negotiated by local consultants with respect to registration formalities and local deliveries. You will find details about your pledge in the fine print of your loan agreement. The agreement specifies the assets covered by the pledge. If only one item is mentioned, your loan is guaranteed by specific guarantees. But if a certain number of your business resources are at stake, look at a flat-rate pledge fee.
The UCC-1 declaration will provide concrete indications of which assets can be confiscated and in what order. It can also prioritize lenders who can first seize assets in case several lenders are on the loan. The UCC-1 declaration must be submitted to local agencies in the state where the borrower`s activity is located. White links are often referred to as „UCC-1,“ according to the section of the Single Code of Trade that governs these types of pledges. Under the UCC, lenders generally deposit a lump sum pledge fee with the Secretary of State`s office in the state in which they operate. The lender must also include a copy of the lump sum pledge fee in the loan agreement. The right to pledge is a public statement that other creditors can consult. Link`s records show a potential lender that another lender has already lent to the business and that it has an interest in the security of the company`s assets. Two recent bankruptcy decisions highlight the need for lawyers to be aware of the differences between the rules on service descriptions in security agreements and those relating to funding returns. UCC (B) (2) provides that a secondary description referring only to a type defined in the UCC „reasonably identifies“ such security, without the need to specify it.
However, section 9-108 (c) provides that an excessive description of security, such as. B „all of the debtor`s assets“ does not make the assets reasonable. As a result, a security agreement that simply describes collateral as „all of the debtor`s assets“ creates no security interest. In addition to confusion, ucC 9504 (2) confirms the use of a supergeneral description in a funding list. But if a security interest is not created by a valid security agreement, a funding statement makes no sense.