Structuring Pledge Agreements for Equity Interests in Partnerships and LLCs to Maximize Protection for Lenders

Drafting Key Provisions in the Security Agreement and Corresponding Amendments to the Borrower's Operating Agreement

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, June 6, 2017
Recorded event now available

This CLE webinar will prepare lenders’ counsel to draft equity interest pledge and other agreements for partnership and LLC interests that provide maximum protection for the lender’s security interest. The panel will outline corresponding provisions that should be contained in the borrower’s operating or partnership agreement.


Equity interests in LLC and partnership interests are a common form of collateral in many secured finance transactions, particularly mezzanine financing. The security agreement and related documents are important for the effectiveness of the security interest in an LLC or partnership equity interest.

Critical provisions that protect the lender’s interests include the choice of the LLC or partnership to opt-in to UCC Article 8. Representations, warranties and covenants of security agreements are often different than standard provisions for other collateral.

Listen as our authoritative panel of practitioners discusses UCC Article 9 and Article 8 requirements for equity interests in LLC or partnership interests. The panel will outline best practices for drafting pledge agreements and making corresponding amendments to the borrower’s operating agreement that maximize protection for the lender.


  1. Overview of UCC Article 8 and 9 requirements
  2. Drafting the security agreement
  3. Recommended amendments to the LLC operating agreement or partnership agreement
  4. Common pitfalls and strategies to best protect the lender


The panel will review these and other key issues:

  • Why is the UCC Article 8 opt-in and perfection by “control” preferable to perfection by the filing of a financing statement under Article 9?
  • What steps should the lender take to ensure the borrower cannot opt-out of Article 8?
  • What are the key provisions that should be included in the borrower’s operating agreement or partnership agreement to facilitate realization on the collateral?
  • To what extent may the lender use the operating or partnership agreement to prevent the borrower from commencing a bankruptcy case to block the lender’s enforcement?


Curtis A. Johnson, Partner
McCarter & English, Newark, N.J.

Mr. Johnson advises clients with respect to complex financings and other business and capital transactions, including syndicated loan facilities, asset based loans, mezzanine financing and equity investments. He serves as primary counsel to a major financial institution with respect to its “impact investments.” 

Edwin E. Smith, Partner
Morgan, Lewis & Bockius, New York and Boston

Mr. Smith concentrates his practice in commercial law, debt financings, structured financings, workouts, bankruptcies, and international transactions. He is particularly knowledgeable on commercial law and insolvency matters, both domestic and cross-border. His representations have included those in major bankruptcies including Lehman and the City of Detroit. Mr. Smith often advises financial institutions on documentation and risk management issues.

Steven O. Weise, Partner
Proskauer Rose, Los Angeles

Mr. Weise practices in all areas of commercial law and has extensive experience in financing, especially in those secured by personal property, including structured financing. He is regarded as one of the foremost authorities on Article 9 of the UCC. He is a member of the Permanent Editorial Board for the UCC and a member of the American Law Institute’s UCC Article 9 Drafting Committee. Mr. Weise is also the past chair of the American Bar Association’s Business Law Section Legal Opinions Committee.


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Customer Reviews

Program did a great job distinguishing the differences between Art 8 and Art 9 equity interest and effects plus practical ways to improve intercreditor agreements and considerations.

Craig Moore

AmericanWest Bank

I appreciated the tips regarding language needed in pledge and LLC agreements.

Alan Schacter

Allen & Overy

The speakers were very knowledgeable and I liked that everyone spoke their minds.

Sherry Billings

ConocoPhillips Alaska

Strafford's program was lively and interesting.

Julie Zando-Dennis

Carroll McNulty Kull

I was pleased with the webinar’s quality topic and the ease of participation.

Mary Brown

McAFee & Taft

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Banking & Finance Law Advisory Board

Irving C. Apar


Thompson Hine

Mark N. Berman

Adjunct Professor

Northeastern University

Willa Cohen Bruckner


Alston & Bird

Lawrence Kaplan

Of Counsel

Paul Hastings

Kevin Petrasic


White & Case

Laura D. Richman


Mayer Brown

Robert M. Stern


Orrick Herrington & Sutcliffe

Andrew Stutzman


Stradley Ronon Stevens & Young

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