Secured Lending Transactions: Anti-Assignment Provisions; 'Best Efforts'; 'Ordinary Course of Business'; “Business Judgment”, ‘Reasonable Discretion’
Documenting UCC Security Interests in Assets Subject to Anti-Assignment Clause, Interpreting Complex Covenants
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will guide counsel on drafting and interpreting exclusions from collateral for contracts and other assets that are subject to restrictions on being pledged by the loan parties. This CLE webinar will also help counsel interpret loan document terms that are often not adequately understood, including "ordinary course of business," "best efforts," "reasonable best efforts," "commercially reasonable efforts", “business judgment” and “reasonable discretion.”
Outline
- Interpretation of common terms in loan documents:
- Ordinary course of business
- Best efforts, reasonable best efforts, and commercially reasonable efforts
- Business judgment
- Reasonable discretion
- Dealing with contractual and legal restrictions on assignment and security interests in the context of secured lending:
- Examples of assets with restrictions on being pledged
- The UCC "override" applicable to certain assets: UCC Sections 9-406 through 408
- What the "override" does not do
- Important state variations and why they are important
- Related choice of law issues and documentation considerations
- Traps for the unwary
Benefits
The panel will review these and other questions:
- How should commercial finance counsel craft "best efforts" or “business judgment” -style obligations in their agreements to reflect the intent of the parties and not promise either too much or too little?
- What are the traps for the unwary in exclusions from collateral for assets that are subject to restrictions on assignment or security interests?
- What are some ways secured lenders can structure the grant of security in assets subject to restrictions on assignment or security interests to maximize the strength of their collateral position?
Faculty
Jennifer B. Hildebrandt
Partner, Corporate Department
Paul Hastings
Ms. Hildebrandt is a partner in the Global Finance Group of Paul Hastings and head of the Los Angeles Corporate... | Read More
Ms. Hildebrandt is a partner in the Global Finance Group of Paul Hastings and head of the Los Angeles Corporate Department. She represents banks and other lenders in commercial finance matters (including asset-based loans and cash flow loans), restructurings, workouts, and special situation lending. Ms. Hildebrandt has extensive experience in multi-tranche and multi-lien transactions. In particular, she has extensive experience representing lenders in two lien deals, split collateral deals and first-out / last-out unitranche transactions. In addition, she has experience in various business sectors including healthcare, software, retail, insurance, media, franchise, restaurants, casinos, manufacturing, and vehicle and airline transportation, and in cross-border transactions.
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Christopher G. Ross
Partner, Corporate Department
Paul Hastings
Mr. Ross represents banks and alternative lenders in commercial finance transactions, including acquisition financings,... | Read More
Mr. Ross represents banks and alternative lenders in commercial finance transactions, including acquisition financings, syndicated and direct lending, cross-border transactions, special situations, refinancings, recapitalizations, asset-based lending, cash flow loans, first lien/second lien facilities, and mezzanine debt facilities. He has experience in various business sectors including healthcare, software, retail, media, franchising, manufacturing, and transportation. In addition, Mr. Ross has extensive experience in representing creditors, lenders, and investors in connection with both in-court and out-of-court restructurings, including debtor-in-possession and exit financings.
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