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cortrightlaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 513
Experience:  Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
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We are working with our business bank in an effort to avoid

Resolved Question:

We are working with our business bank in an effort to avoid bankruptcy.

We owe them $265,000 and the loan is secured by our equipment. They have offered to accept $200,000 to satisfy the loan (which is in default) and we have determined that we can sell about 50% of the equipment to reach this amount in 90 days AND stay in business.

However, the bank has a blanket UCC listing on all our equipment and refuses to release the pieces individually as they sell. They suggest orchestrating all the sales to close on the same day.

To get top dollar for our equipment and get the $200k within the time frame, we need to sell primarily to individuals NOT at auction (which usually results in lower sale values). These people will need free and clear titles at the time of the sale.

We have offered to put the proceeds from these equipment sales in a secure account (inaccessible to us) at the bank for the 90 days while we are hustling to find buyers (we already have many lined up). At that the end of the 90 days, if there is 200k everyone is happy. If not, they get the money in the account PLUS still have blanket UCC on the remaining equipment.

It seems like a win-win but they have told us no.

Is there anything we can do to force them to write releases for individual equipment as we sell it?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cortrightlaw replied 5 years ago.

cortrightlaw : Without filing bankruptcy you are probably not going to be able to force there hand on their security interest. In a chapter 11 you would most likely be able to do what you are attempting but it a fairly expensive and time consuming procedure, usual retainers run 15-25,000.

We were looking at filing a Chapter 7 personal because so much of our debt is guaranteed personally.

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