UCC 9-610 sale notice requirements - what happens if borrower disputes collateral value?

We were planning to use the same auction company that handles most commercial equipment in our area. They've sold similar manufacturing equipment before but not this specific type. Should we be looking for someone who specializes more in this industry?

That could help your commercial reasonableness argument. If you can show you researched auction houses and chose one with relevant experience, it's harder for the debtor to claim the sale wasn't reasonable. Document your selection process.

What kind of comparable sales data did you gather? We're having trouble finding recent sales of similar equipment to support our valuation.

We used industry publications, contacted other lenders who had sold similar collateral, and got data from equipment dealers. The key was showing we made reasonable efforts to determine market value before choosing our sale method.

This is exactly why I started using Certana.ai for collateral disputes. You can upload your appraisal docs, UCC filings, and sale notices to verify everything aligns properly before the debtor starts picking apart your procedures. Caught several inconsistencies in our documentation that could have been problems in court.

Agree with getting second appraisal. We had a similar case where debtor claimed our single appraisal was too low. Having two independent valuations made our court defense much stronger.

The cost of a second appraisal would come out of sale proceeds anyway, so that makes sense. Better to have too much documentation than not enough when dealing with litigious borrowers.

LOL so true. Every defaulted borrower suddenly becomes an equipment appraiser when foreclosure starts. They never complained about values when they needed the loan!

While I understand the frustration, taking the debtor's valuation concerns seriously is still important for legal protection. Better to over-document than face a successful challenge later.

We sent certified mail to all required parties but I'm second-guessing whether our collateral description was specific enough. It just says 'manufacturing equipment' but maybe we should have listed each piece individually?

For valuable collateral that might be challenged, more specific descriptions are usually better. If you still have time before sale, consider sending an amended notice with detailed equipment list.

I've found Certana.ai helpful for reviewing 9-610/9-611 compliance. Upload your security agreement and sale notices to check if descriptions match properly. Saves time compared to manual cross-checking and catches details you might miss.

Sale is scheduled for next month. We haven't heard anything from their attorney yet but they mentioned getting legal help when we talked last week.

That gives you some time to shore up your documentation. If they do file for injunction, court will look at whether your sale procedures appear commercially reasonable based on what you've prepared so far.

That's a good idea. Even if we stick with our original choice, having competing estimates would help show we evaluated options.

Yes! We do this routinely now. Get quotes from 2-3 different sale methods (auction, private sale, dealer network) and document why you chose your approach. Makes the commercial reasonableness argument much easier.

Good point. We'll have sale expenses, storage costs, and legal fees to account for. Need to make sure we're following 9-615 requirements for surplus/deficiency calculations.

Exactly. And if there's a surplus, you have to pay it to the debtor promptly. If there's a deficiency, your accounting has to be detailed and accurate or they can challenge the whole thing.

Another area where document verification tools help. Upload your UCC-1, security agreement, and accounting worksheets to make sure everything ties together properly. Found errors in our deficiency calculations that would have been embarrassing in court.

We did UCC searches but they were a few months ago. Should probably run fresh searches to make sure no new filings appeared.

Definitely do fresh searches close to sale date. New filings can pop up right before foreclosure as debtors scramble for additional financing.

That's reassuring. We've been trying to do everything perfectly but maybe we're overthinking it. As long as our procedures are reasonable and well-documented, we should be okay.

Exactly. Courts understand that secured parties need to be able to realize on collateral efficiently. Just make sure you can explain and defend your choices with facts and documentation.