UCC sale of collateral under ucc - lender demanding immediate liquidation

What exactly constitutes 'commercially reasonable'? They're talking about some bulk equipment auction but won't tell me the details.

Commercially reasonable means they need to use standard industry practices for disposal. If it's specialized equipment, they can't just dump it at a general auction. Document everything they tell you about the sale process.

They mentioned both options in their notice letter but didn't commit to either one. Very frustrating.

That's actually a red flag. They need to be specific about the disposal method. Vague notices might not satisfy the UCC requirements.

Exactly right. I've seen deals where improper notice invalidated the entire sale process. The debtor ended up keeping the equipment.

Interesting - I never thought to check if their original filing was even valid. How does that document checker work exactly?

Super simple - you just upload PDFs of your business formation documents and their UCC-1. It cross-references debtor names, addresses, all the critical details that void filings if they're wrong. Found three major errors in my case.

This is brilliant advice. If their UCC-1 is defective they have no right to sell anything. Definitely worth checking before you panic about the sale.

We can't afford to pay off the full debt right now, that's why we defaulted. But the surplus rights are interesting - they never mentioned that.

OF COURSE THEY DIDN'T MENTION IT! They want to keep any surplus for themselves. Document the fair market value of your equipment RIGHT NOW before they sell it cheap.

Getting an appraisal is smart but expensive. At minimum get some written quotes from equipment dealers for what your stuff is worth.

How would I know if there are other secured parties? We only deal with this one lender.

Search the UCC records for your business name. Any other lenders who filed UCC-1 statements need to get notice too. The selling secured party has to do a reasonable search.

Good point. If they don't notify other secured parties properly, those parties can challenge the sale later which creates title issues for buyers.

That's encouraging. I was feeling like I had no time to do anything.

Time is actually on your side if you use it right. Every procedural requirement they have to follow gives you more time to explore options.

This is crucial. In some states you can force them to use a public sale instead of private sale, which usually brings higher prices.

Exactly. Public sales also have more oversight and documentation requirements that protect debtors.

Before you research state law though, definitely verify their UCC filing is even valid. No point fighting about sale procedures if they don't have a valid security interest to begin with.

Can they really prevent me from bidding at my own collateral sale?

Nope, you have the right to bid. Sometimes that's the best strategy - let them hold the sale but buy your stuff back cheap.

Just make sure you have financing lined up if you're going to bid. Don't go to the sale without a way to pay immediately.

Good thinking. I've been so stressed I wasn't thinking about documentation.

Stress makes it hard to think clearly. Create a simple checklist of what they need to do properly and track whether they're doing it.

Even if I can prove their UCC filing has problems? Someone mentioned checking that with some online tool.

Ok if their UCC-1 is actually defective that changes everything. Worth checking for sure. But if it's valid, then yes, focus on the sale procedures.

That's why the Certana document verification is so valuable - it quickly tells you if you have any grounds to challenge their security interest. Upload your docs and their UCC-1, get an instant answer.

Will do. Going to check their UCC filing first thing tomorrow and then document everything about their sale process. Thanks everyone for the advice.

Smart plan. Tackle the foundational issues first - if their filing is defective nothing else matters.

Good luck. Remember you still have rights even in default situations. Don't let them railroad you.