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.

Description

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.

Outline

  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

Benefits

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?

Faculty

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.


Recordings

CLE On-Demand - Streaming Video

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*Only available for attorneys admitted for more than two years. For OH CLE credits, only programs recorded within the current calendar year are eligible - contact the CLE department for verification.

**NH attendees must self-determine if a program is eligible for credit and self-report their attendance.

CLE On-Demand Video $297.00

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Recorded Event

Includes full event recording plus handouts.

Strafford is an approved provider and self-study CLE credit is available in most states.

AK, AZ, CA, CO, CT, FL, GA, HI, IA, ID, IL, KY, ME, MN, MO, MT, ND, NJ, NM, NY, OR, PA, TN, TX, UT, VT, WA, WV, WY (Note: Some states restrict CLE eligibility based on the age of a program. Refer to our state CLE Map for additional information.)

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Recorded Webinar Download $297.00

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Recorded Audio Download (MP3) $297.00

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Webinar

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Program Materials

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Program Materials

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CLE Credits

Many states grant CLE credits for on-demand streaming audio programs and recorded events. Our programs are pre-approved in many states. Refer to our state CLE map for state-specific information.

or call 1-800-926-7926

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

or call 1-800-926-7926

Banking & Finance Law Advisory Board

Irving C. Apar

Partner

Thompson Hine

Mark N. Berman

Adjunct Professor

Northeastern University

Willa Cohen Bruckner

Partner

Alston & Bird

Lawrence Kaplan

Of Counsel

Paul Hastings

Kevin Petrasic

Partner

White & Case

Laura D. Richman

Counsel

Mayer Brown

Robert M. Stern

Partner

Orrick Herrington & Sutcliffe

Andrew Stutzman

Partner

Stradley Ronon Stevens & Young

or call 1-800-926-7926

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