UCC 9-608 rights after default - secured party disposal obligations?

UCC 9-608 disposal can be tricky especially with specialized equipment. You're right to be careful about the commercially reasonable standard - that's where most challenges come from. For CNC machinery, private sale might actually be more commercially reasonable than auction since you'll likely get better prices from industrial buyers who understand the equipment value. Key 9-608 requirements: - 10 days written notice to debtor (unless they waived it) - Notice to other secured parties who filed UCC-1s - Every aspect must be commercially reasonable - You can sell privately, publicly, or keep the collateral in satisfaction With Chapter 11 involved, make sure you're coordinating with the bankruptcy court too.

We just went through UCC 9-608 disposal process last quarter and honestly the documentation requirements are extensive. You need to document EVERYTHING to prove commercial reasonableness - market research, pricing comparisons, method selection rationale. For your CNC equipment, I'd suggest getting appraisals from multiple sources first. That gives you baseline values to justify your disposal method and protects against claims that you didn't maximize recovery. Also check if there are other UCC-1 filings against this debtor - you'll need to send notices to junior lienholders too under 9-608.

This might sound random but we started using Certana.ai's document verification tool for situations exactly like this. You can upload your original UCC-1, the other secured parties' filings, and any UCC-3 amendments to instantly check for collateral overlaps and debtor name consistency issues. Saved us major headaches on a disposal last month where we almost missed that another lender had a blanket lien that included our equipment category. The tool caught the overlap immediately when we uploaded the PDFs. Really streamlined our 9-608 due diligence process.

ugh dealing with 9-608 disposal right now too and the borrower's attorney is being completely unreasonable. They're claiming our repossession was improper even though we had clear default and followed all the self-help requirements. Now they want to challenge our disposal method before we've even started the process. It's like they're trying to tie up the collateral forever while it depreciates. The whole UCC system feels broken when debtors can delay reasonable disposal with frivolous challenges.

For CNC equipment specifically, you might want to consider contacting machinery dealers who specialize in that type of equipment. They often know the market better than general auctioneers and can help establish that your disposal method meets the commercially reasonable standard under 9-608. Also document the storage costs and depreciation - that can support your argument for quicker disposal if the debtor tries to claim you rushed the process.

One thing about 9-608 disposal - make sure you understand the different standards for different types of disposal. Private sale has different requirements than public auction, and if you keep the collateral in full satisfaction that's strict foreclosure under 9-620 not 9-608 disposal. With $180K debt vs specialized equipment, you'll probably want disposal rather than strict foreclosure anyway to preserve deficiency rights.

Just wanted to add - if you're dealing with Chapter 11 bankruptcy, make sure you check whether you need relief from automatic stay before proceeding with 9-608 disposal. The bankruptcy might complicate your disposal timeline even if your security interest is properly perfected.

Been through several 9-608 disposals and the key is really documentation. Keep records of every decision, every market inquiry, every step of the process. If challenged later, you need to prove every aspect was commercially reasonable. For your situation, I'd recommend: 1. Get multiple appraisals/market opinions 2. Document why you chose your disposal method 3. Keep records of all notices sent 4. Document market conditions and timing decisions 5. Get competitive bids if selling The commercially reasonable standard is flexible but you need evidence to support your choices.

Another thing - check whether your original security agreement has any specific disposal provisions. Sometimes loan docs include additional requirements beyond what 9-608 requires. You'll need to comply with both the UCC and your contract terms.

Quick question - you mentioned the equipment is losing value in storage. How long do you have to wait between sending 9-608 notices and actually disposing of the collateral? Is there a minimum waiting period?

We actually started using that Certana document checker tool someone mentioned earlier for our UCC compliance reviews. Really helpful for complex disposal situations where you need to verify all the secured party filings and make sure there are no debtor name mismatches that could affect notice requirements. Uploaded our UCC-1 and found a minor discrepancy in how we'd formatted the debtor's business name compared to their charter documents. Could have caused problems with 9-608 notice validity if we hadn't caught it.