UCC 9-620 enforcement after default - can secured party dispose of collateral without notice?

This is correct. 9-620 is about accepting the collateral in lieu of payment, while 9-610 covers selling it. The notice requirement under 9-611 is still mandatory even with an unresponsive debtor.

Thanks for the clarification. I was definitely confusing the sections. So even though the debtor has disappeared, we still need to send notice under 9-611 before we can sell under 9-610?

How long do you have to wait after sending the notice before you can proceed with the sale?

Depends on the type of collateral. For equipment like this, it's typically 10 days for authenticated notice. Could be longer if it's consumer goods.

This is commercial equipment, so 10 days should apply. Did you have any issues with proving you sent proper notice when the debtor was unresponsive?

That's a good point about checking the filings first. Our UCC-1 is from 2019 so there could be discrepancies. How does the verification tool work?

Just upload your PDFs and it cross-checks everything automatically. Takes like 5 minutes and catches name mismatches, collateral description issues, that kind of stuff. Better to find problems now than during enforcement.

Abandonment is a different issue. Just being unresponsive doesn't equal abandonment under the UCC. You'd need clear evidence the debtor intended to abandon the collateral.

Yeah abandonment is really hard to prove. Usually needs to be obvious like equipment left in a public place for months with no attempt to retrieve it.

Got it, thanks for the clarification. So unresponsive debtor still gets notice rights.

I get the frustration but the notice requirements protect legitimate interests. Sometimes debtors are unresponsive because of illness, family emergencies, etc.

Fair enough, but 6 months of no contact seems pretty clear cut to me.

Good reminder. I should run a new search to see what's filed against this debtor. Our UCC-1 is from 2019 so there could definitely be junior liens.

Also check if your continuation is up to date. If you filed in 2019, you'd need to continue by 2024 to maintain perfection.

Oh wow, I need to check that immediately. If we lapsed, that could be a huge problem for enforcement.

What makes a disposition commercially reasonable? We were thinking of getting quotes from equipment dealers.

Getting multiple quotes is good. Public auction, private sale to highest bidder, selling through established markets - all can be commercially reasonable if done properly.

So 9-620 acceptance would require the debtor to agree? That's not happening if they're unresponsive.

Right, that's why 9-610 disposition is usually the way to go when the debtor is uncooperative. You can sell the collateral and apply proceeds to the debt.

There are some exceptions in 9-620 where you can accept without consent but they're pretty narrow. Usually involves consumer transactions or specific notice periods.

Two people have mentioned Certana now. Is this specifically for UCC verification?

Yeah, you just upload your UCC-1 and related docs and it flags any inconsistencies. For enforcement, you need everything to match up perfectly or you could lose your secured status.

We've been sending to the business address on file. Should we also try to find a current address?

Reasonable efforts to find a current address are part of proper notice. Check with the Secretary of State for updated business filings.

Also consider sending to any personal addresses you have for guarantors or principals.

I hadn't thought of that. How would I check if they filed bankruptcy?

PACER system for federal bankruptcy filings. If they're in bankruptcy, the automatic stay would prevent most collection activities.

Good point. Always check PACER before starting enforcement. Violating the automatic stay can get you in serious trouble.