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Presenting a live 90-minute webinar with interactive Q&A
Mezzanine Loan Foreclosures:
Effectuating a UCC Foreclosure Sale
and Navigating Bankruptcy Pitfalls Protecting Lender and Borrower Interests and Overcoming Obstacles to the Sale
Today’s faculty features:
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
WEDNESDAY, OCTOBER 28, 2015
James S. Cochran, Partner, O'Connor Cochran, Los Angeles
James D. Prendergast, SVP, Legal Counsel-UCC Division,
First American Title Insurance Company, Santa Ana, Calif.
Steven O. Weise, Partner, Proskauer Rose, Los Angeles
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FOR LIVE EVENT ONLY
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
FIRST AMERICAN
TITLE INSURANCE COMPANY
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Pepperdine Law School
Pacific Ocean
6
EAGLE 9® UCC Division
© 2009 First American Title Insurance
Company
Our Mission
Cover
foreclosure
of Article 9
security
interests on
mezz equity
collateral. 7
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
FORECLOSURE
8
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
A GUIDE TO THINKING
ABOUT PERFECTION
Step 1: Does Article 9 Apply?
Step 2: Attachment
Step 3: Categorize the Collateral
Step 4: Perfection Step Filing (§9-310)
Perfection under non-Article 9 law (§9-311(a))
Possession (§9-313)
Control (§§9-314, 9-104, 9-106, 8-106)
Step 5: Priority Consequences
9
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
US CMBS and CRE CDO: Moody’s
Approach to Rating Commercial Real Estate
Mezzanine Loans
Pledge of 100% of the equity
Opt In to Article 8
Certificate the Equity
File a Financing Statement
Control the ability to Opt Out
– hardwire or proxy
UCC Insurance
10
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
NEED TO CONSIDER NOT ONLY
SECURED CREDITOR STATUS UNDER ARTICLE 9 OF THE UCC;
BUT ALSO
PROTECTED PURCHASER STATUS UNDER ARTICLE 8 OF THE UCC
11
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
FORECLOSURE
12
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
• Foreclosure by Public Sale
• Foreclosure by Private Sale
• Retention of Collateral in Satisfaction
of the Debt
• Judicial Enforcement
Methods of
Foreclosure
• Collection Rights under
UCC § 9-607
13
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
1. Analogies to real property
law don’t work – as is
generally true:
foreclosure cuts off right of
redemption (§9-623(c))
rights of good faith
transferee (§9-617(b))
2. Secured creditor rights
upon default (including
foreclosure) are covered in
Part 6 of Article 9.
Foreclosure 101:
14
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose
By whom?
Legal standard?
When final?
Judgment for
deficiency?
Sale Procedures
Compared
15
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
By whom?
Legal standard?
When final?
Judgment for
deficiency?
Sale Procedures
Compared
16
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
Enforce SI
Protect “surplus”
Maybe fix deficiency
By whom?
Legal standard?
When final?
Judgment for
deficiency?
Sale Procedures
Compared
17
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
Enforce SI
Protect “surplus”
Maybe fix deficiency
By whom? Sheriff, clerk
Legal standard?
When final?
Judgment for
deficiency?
Sale Procedures
Compared
18
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
Enforce SI
Protect “surplus”
Maybe fix deficiency
By whom? Sheriff, clerk Secured party
Legal standard?
When final?
Judgment for
deficiency?
Sale Procedures
Compared
19
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
Enforce SI
Protect “surplus”
Maybe fix deficiency
By whom? Sheriff, clerk Secured party
Legal standard? Fixed procedural
requirements
When final?
Judgment for
deficiency?
Sale Procedures
Compared
20
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
Enforce SI
Protect “surplus”
Maybe fix deficiency
By whom? Sheriff, clerk Secured party
Legal standard? Fixed procedural
requirements
Commercially
reasonable
When final?
Judgment for
deficiency?
Sale Procedures
Compared
21
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
Enforce SI
Protect “surplus”
Maybe fix deficiency
By whom? Sheriff, clerk Secured party
Legal standard? Fixed procedural
requirements
Commercially
reasonable
When final? On confirmation
Judgment for
deficiency?
Sale Procedures
Compared
22
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
Enforce SI
Protect “surplus”
Maybe fix deficiency
By whom? Sheriff, clerk Secured party
Legal standard? Fixed procedural
requirements
Commercially
reasonable
When final? On confirmation Upon sale
Judgment for
deficiency?
Sale Procedures
Compared
23
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
Enforce SI
Protect “surplus”
Maybe fix deficiency
By whom? Sheriff, clerk Secured party
Legal standard? Fixed procedural
requirements
Commercially
reasonable
When final? On confirmation Upon sale
Judgment for
deficiency?
Varied rules
Sale Procedures
Compared
24
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
Enforce SI
Protect “surplus”
Maybe fix deficiency
By whom? Sheriff, clerk Secured party
Legal standard? Fixed procedural
requirements
Commercially
reasonable
When final? On confirmation Upon sale
Judgment for
deficiency?
Varied rules If procedure OK; and
special rule if
secured is buyer*
Sale Procedures
Compared
*§9-615(f) 25
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Judicial sale Article 9 sale
Purpose Enforce mortgage
Protect “equity”
Maybe fix deficiency
Enforce SI
Protect “surplus”
Maybe fix deficiency
By whom? Sheriff, clerk Secured party
Legal standard? Fixed procedural
requirements
Commercially
reasonable
When final? On confirmation Upon sale
Judgment for
deficiency?
Varied rules If procedure OK; and
special rule if
secured is buyer*
Sale Procedures
Compared
*§9-615(f) 26
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Public vs. Private UCC
Foreclosure Sales
Public Sale –
• Not defined
• Meaningful opportunity for
competitive bidding
• Some form of advertising and notice
to maximize public participation
• Commercially Reasonable
27
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Public vs. Private UCC
Foreclosure Sales
Limits on the right of the
secured creditor to purchase
collateral at a private sale
(§9-610(c)).
No limits in a public sale.
Only collateral sold on a
recognized
market/subject to widely
distributed standard price
quotes (publicly traded
stock) can be purchased
at a private sale by the
secured creditor.
28
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Notice:
Notification provisions of §§9-611-613.
Who receives notice of the sale. (§9-611)
The Debtor, any secondary obligor, other secured creditors, and others requesting notice.
While not technically required, notice to parties that have expressed an interest in acquiring the collateral may bear on whether the sale was commercially reasonable.
Public/Private Sale:
29
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Notice:
Contents of notice of sale: “time and place of a public disposition” vs. “time after which” (§9-613).
Timeliness of notice:10 day safe harbor (§9-612).
UCC Foreclosure Notice Insurance Policy™.
Public/Private Sale:
30
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Content of Notice
§9-613 provides that notice is sufficient if it:
Describes the debtor and the secured party
Describes the collateral being sold
States the method of intended disposition
States that the debtor is entitled to an accounting of
the unpaid indebtedness and states the charge, if
any, for the accounting
States the time and place of public disposition or the
time after which any other disposition will be made
31
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Where to Advertise
Depends on the type of collateral
Newspapers of general circulation
Trade journals
Location of likely bidders
Specialized markets
32
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Private Sale Significantly Cheaper
Commercially Reasonable Notice
AND Commercially Reasonable Sale
“Qualified Transferee”
Rights of Good Faith Transferee (§9-
617)
Public/Private Sale:
33
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
§9-610(b):
Every aspect of a disposition of collateral,
including the method, manner, time,
place, and other terms, must be
commercially
reasonable
Commercially
Reasonable Sale
34
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
§9-627(b)(3):
Otherwise in conformity with reasonable
commercially practices among dealers in
the type of property that was the subject
of the disposition.
Commercially
Reasonable Sale
35
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
§9-627(a):
The fact that a greater price could have been obtained ...is not itself sufficient to preclude the secured party from establishing that the ...[foreclosure] was made in a commercially reasonable manner
Commercially
Reasonable Sale
36
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Commercial Reasonableness is
like pornography, hard to define,
but you know it when you see it.*
*paraphrasing Potter Stewart in Jacobellis v.
Ohio (1964).
37
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Case Authority on what
constitutes Commercial
Reasonableness
Vornado PS, L.L.C. v. Primestone Inv. Partners, L.P., 821 A.2d 296, 49 UCC Rep.Serv.2d 1348 (2002).
The foreclosing creditor should seriously conduct the sale as if it really wanted to obtain the highest price for the collateral, including the hiring of respected and knowledgeable investment bankers, real estate brokers and the like.
Inside information need not always be disclosed if there is sufficient reason for confidentiality or the failure to disclose.
An external market will be dispositive of reasonable price but the highest price is not required for reasonableness.
A public sale is warranted notwithstanding Official Comments especially if the foreclosing creditor is a likely sole bidder for the collateral, which is often the case in the foreclosure of real estate mezzanine loan collateral.
The noticed rules for the conduct of the sale can be followed.
38
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Case Authority on what
constitutes Commercial
Reasonableness
Voutiritsas v. Intercounty Title Co. of Illinois, 279 Ill.App.3d 170, 664 N.E.2d 170, 215 Ill.Dec. 773, 31 UCC Rep.Serv.2d 950 (1996).
If you are foreclosing on equity collateral pledged to secure a mezzanine real property loan, it is very prudent to describe the underlying realty that is involved because no one bidding at the foreclosure dale wants to acquire the membership certificate just to frame it. Notwithstanding what is being foreclosed, what actually is being sold?
Again, as in Vornado, the foreclosing creditor should seriously conduct the sale as if it really wanted to obtain the highest price for the collateral.
If the secured party is the only bidder at the foreclosure sale, it will have a significant burden showing that the sale was conducted in a commercially reasonable manner. Keep notes to answer the question as to why the secured party was the only bidder, e.g., the property was so far under water that the pledged equity in the owner of the real property had no value and the secured party held the sale for other legitimate reasons, such as to set a deficiency.
If the collateral being foreclosed has value, be sure the bid of the foreclosing creditor has something to do with that value.
39
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Conclusions
Carefully follow foreclosure sale rules.
Be careful about notice of sale.
Prepare proof of reasonable price.
Focus on the procedures of the sale – not just
the price.
Note different measures of damages.
Assess the risk of counterclaims.
Use “safe harbors” where possible.
40
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Commercial
Reasonableness
A commercially reasonable sale may include the following:
Marketing method
Advertising in trade publications and newspapers
Retention of brokers
Electronic forum
Providing property profiles to prospective purchasers and access to subject property
“war room” – provide sufficient due diligence materials and time to allow potential buyers to review
Disclaimer of warranties (§9-610(e))
Appropriate UCC insurance
41
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
§9-627(c)(1):
A collection, enforcement, disposition, or
acceptance is commercially reasonable if it
has been approved in a judicial proceeding.
Commercially
Reasonable Sale
42
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
MORAL: A foreclosing lender should
make sure that at each point in the
foreclosure process its actions are
carefully considered to minimize the
chances of a challenge for lack of
commercial reasonableness.
Commercially
Reasonable Sale
43
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Partial vs. Full Satisfaction –
affirmative consent vs. passive
acceptance (§9-620)
• Notice (§9-621)
• Acceptance – debtor and others (§9-
620)
Best way to go if Debtor consents
Strict
Foreclosure:
44
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Donald J. Rapson commented that strict
foreclosure “provides a method of
enforcement that is nonadversarial,
requires lower transaction costs, and is
not likely to result in litigation.”*
* Default and Enforcement of Security Interests Under Revised Article 9, 74 Chi.-
Kent L. Rev. 893. 923 (1999).
45
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Notification of Proposal (§9-621)* -
any person with an interest in the collateral who has notified the Secured Party;
any other lienholder that, 10 days before the Debtor consented to the acceptance, held a lien on the collateral perfected by the filing of a Financing Statement; and
any other secured party that, 10 days before the Debtor consented to the acceptance, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in §9-311(a).
In addition, if in partial satisfaction, to any secondary obligor. *UCC Foreclosure Notice Insurance Policy™
Strict Foreclosure:
46
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Who must consent:
Debtor under §9-620
Person to whom notice is required
under §9-621
Any other person holding a
subordinate interest in the collateral
Strict
Foreclosure:
47
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
• Strategic Advantages to Secured Party
• Debtor’s Strategic Assertion of Objection to Acceptance
Strict Foreclosure:
48
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Deed in lieu Acceptance of
Collateral, § 9-620
System
Purpose
Formal
requirements
Consumer
exceptions
Settlement Procedures
Compared
49
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Deed in lieu Acceptance of
Collateral, § 9-620
System Real estate
Purpose
Formal
requirements
Consumer
exceptions
Settlement Procedures
Compared
50
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Deed in lieu Acceptance of
Collateral, § 9-620
System Real estate Personal property
Purpose
Formal
requirements
Consumer
exceptions
Settlement Procedures
Compared
51
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Deed in lieu Acceptance of
Collateral, § 9-620
System Real estate Personal property
Purpose Settlement that
avoids foreclosure
Formal
requirements
Consumer
exceptions
Settlement Procedures
Compared
52
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Deed in lieu Acceptance of
Collateral, § 9-620
System Real estate Personal property
Purpose Settlement that
avoids foreclosure
Settlement that avoids
foreclosure
Formal
requirements
Consumer
exceptions
Settlement Procedures
Compared
53
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Deed in lieu Acceptance of
Collateral, § 9-620
System Real estate Personal property
Purpose Settlement that
avoids foreclosure
Settlement that avoids
foreclosure
Formal
requirements
Deed
Consumer
exceptions
Settlement Procedures
Compared
54
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Deed in lieu Acceptance of
Collateral, § 9-620
System Real estate Personal property
Purpose Settlement that
avoids foreclosure
Settlement that avoids
foreclosure
Formal
requirements
Deed 1. Authenticated agree-
ment partial satisfaction
2. Lack of objection if in
full satisfaction
Consumer
exceptions
Settlement Procedures
Compared
55
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Deed in lieu Acceptance of
Collateral, § 9-620
System Real estate Personal property
Purpose Settlement that
avoids foreclosure
Settlement that avoids
foreclosure
Formal
requirements
Deed 1. Authenticated agree-
ment partial satisfaction
2. Lack of objection if in
full satisfaction
Consumer
exceptions
No
Settlement Procedures
Compared
56
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Deed in lieu Acceptance of Collateral, § 9-
620
System Real estate Personal property
Purpose Settlement that avoids
foreclosure
Settlement that avoids
foreclosure
Formal
requirements
Deed 1. Authenticated agree-ment
partial satisfaction
2. Lack of objection if in full
satisfaction
Consumer
exceptions
No 1. Waiver needed if debtor
has paid 60%
2. No partial satisfaction
3. Not while debtor has the
collateral
Settlement Procedures
Compared
57
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Deed in lieu Acceptance of Collateral, §
9-620
System Real estate Personal property
Purpose Settlement that avoids
foreclosure
Settlement that avoids
foreclosure
Formal
requirements
Deed 1. Authenticated agree-ment
partial satisfaction
2. Lack of objection if in full
satisfaction
Consumer
exceptions
No 1. Waiver needed if debtor
has paid 60%
2. No partial satisfaction
3. Not while debtor has the
collateral
Settlement Procedures
Compared
58
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Lack of Objection
(only for full satisfaction)
Actual Agreement
(for partial or full satisfaction)
Procedures for Acceptance
(Consent)
59
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Lack of Objection
(only for full satisfaction)
Actual Agreement
(for partial or full satisfaction)
Secured party consent:
Secured party sends
unconditional proposal to
accept in full satisfaction
§9-620(b)(1).
Procedures for Acceptance
(Consent)
60
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Lack of Objection
(only for full satisfaction)
Actual Agreement
(for partial or full satisfaction)
Secured party consent:
Secured party sends
unconditional proposal to
accept in full satisfaction
§9-620(b)(1).
Debtor consent:
Secured party receives no
objection to proposal within
20 days, § 9-620(c)(2)(C).
Procedures for Acceptance
(Consent)
61
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Lack of Objection
(only for full satisfaction)
Actual Agreement
(for partial or full satisfaction)
Secured party consent:
Secured party sends
unconditional proposal to
accept in full satisfaction
§9-620(b)(1).
Secured party consent:
Secured party consents in
an authenticated record §9-
620(b)(1).
Debtor consent:
Secured party receives no
objection to proposal within
20 days, § 9-620(c)(2)(C).
Procedures for Acceptance
(Consent)
62
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Lack of Objection
(only for full satisfaction)
Actual Agreement
(for partial or full satisfaction)
Secured party consent:
Secured party sends
unconditional proposal to
accept in full satisfaction
§9-620(b)(1).
Secured party consent:
Secured party consents in
an authenticated record §9-
620(b)(1).
Debtor consent:
Secured party receives no
objection to proposal within
20 days, § 9-620(c)(2)(C).
Debtor consent: Debtor
agrees to terms in a record
authenticated after default, §
9-620(c)(1).
Procedures for Acceptance
(Consent)
63
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Lack of Objection
(only for full satisfaction)
Actual Agreement
(for partial or full satisfaction)
Secured party consent:
Secured party sends
unconditional proposal to
accept in full satisfaction
§9-620(b)(1).
Secured party consent:
Secured party consents in
an authenticated record §9-
620(b)(1).
Debtor consent:
Secured party receives no
objection to proposal within
20 days, § 9-620(c)(2)(C).
Debtor consent: Debtor
agrees to terms in a record
authenticated after default, §
9-620(c)(1).
Procedures for Acceptance
(Consent)
64
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
• Discharges the security
interest under which the
disposition is made;
• Transfers to a transferee for
value all of the debtor’s
rights in the collateral; and
• Discharges any subordinate
security interest or other
subordinate lien.
Results of
Foreclosure:
65
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
In the good old days: Madrid to BFP vs. RTC, 511 US 531
(1994)(regularly conducted, non collusive sale conforming to state law is not avoidable).
Today: Krohn v. Sweeheart Properties, 203
Ariz. 205, 52 P3d 774 (2002)(sale price is grossly inadequate).
§9-615(f) calculation of surplus or deficiency when the secured party or a person related to the secured party acquires the collateral through foreclosure.
Be commercially reasonable (§9-610(b).
Setting Aside
Foreclosures
66
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Read Lynn Soukup’s article.
Ability of lender to acquire equity interests at public or private sale (§9-610(c)).
No action letters and other securities law challenges to a secured lender that is attempting to foreclose on stock of a public company pledged to secure a loan.
UCC Article 8 implications for the lien interest itself (protected purchaser status, etc.).
Foreclosure On Equity –
Securities Law Implications:
67
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
The SEC has stated in some older no action letters that registration will not be necessary where:
(i) the public sale is necessary to assure that the "foreclosure" is commercially reasonable within the meaning of applicable UCC provisions,
(ii) the shares will be sold as a block,
(iii) an investment letter will be received from the purchaser stating that the securities have been purchased for investment and not with a view toward distribution,
(iv) the certificates will bear a standard 1933 Act legend, and
(v) the public notices states that the secured party reserves the right to bid in for the securities.
Foreclosure On Equity –
Securities Law Implications:
68
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Foreclosure On
Equity:
NOTE #1: If 100% of the equity is not in
play, without the necessary consents from
other partners or members, the
successful purchaser at a foreclosure
sale may not be able to succeed to the
right or powers of a partner or member
and is only entitled to receive proceeds
and distributions.
69
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Foreclosure On
Equity:
NOTE #2: Complexities may arise due to
the “carving up” of the capital structure,
including conflicts of interest between a
servicer/collateral agent that also holds
an interest in a mortgage or mezzanine
tranche and another holder of an interest
in a mezzanine tranche.
70
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Foreclosure On Equity:
AND THEN THE
MEZZANINE
BORROWER
FILES
BANKRUPTCY!
A TOPIC FOR ANOTHER PROGRAM
71
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
UCC EAGLE 9®
NEW PROGRAMS, NEW SOLUTIONS!
72
EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Domain Name (URL): www.eagle9.com
E-mail Address: [email protected]
Toll Free Number: 800.700.1191
UCC Division Legal Team:
Randy Scott, President & Counsel
Jim Prendergast, Senior Vice President and General Counsel
Brad Gibson, Vice President and Associate General Counsel
RESOURCES
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EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
Marketing
Jill Sharif, Vice President, National
Sales Director, 703.480.9541
Gina Sanchez, National Marketing
Coordinator, 714.250.8640
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EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
QUESTIONS
James S. Cochran
O'Connor Cochran
James D. Prendergast
First American Title Insurance Company
Steven O. Weise
Proskauer Rose
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EAGLE 9® UCC Division
© 2008 First American Title Insurance
Company
THANK YOU
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