Structuring Pledge Agreements for Equity Interests in Partnerships and LLCs to Maximize Protection for Lenders
Key Provisions for the Security Agreement and the Borrower's Operating Agreement, UCC Requirements
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will prepare lenders' counsel to draft pledge and other agreements that establish a security interest in partnership and LLC interests. The panel will outline corresponding provisions that should be included in the borrower's operating or partnership agreement to maximize protection for the lender, and discuss the application of UCC Articles 8 and 9 to the perfection and priority of the security interest.
- Overview of UCC Articles 8 and 9 requirements
- Drafting the security agreement
- Recommended amendments to the LLC operating agreement or partnership agreement
- 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 to include 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
McCarter & English
Mr. Johnson advises clients with respect to complex financings and other business and capital transactions,... | Read More
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.”Close
Edwin E. Smith
Morgan, Lewis & Bockius
Mr. Smith concentrates his practice in commercial law, debt financings, structured financings, workouts, bankruptcies,... | Read More
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.Close
Steven O. Weise
Mr. Weise practices in all areas of commercial law and has extensive experience in financing, especially in those... | Read More
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.Close