ABA Section of Business Law
eSource
Debtors Beware!
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This short pointer highlights a concern for debtors who pledge assets where
the secured party has possession or control of the collateral. In some
situations, the debtor's interest in the pledged collateral will be
subordinated to the interests of the secured party's lender.
Similar issues are highlighted in the second edition of "Forms Under Article 9 of the UCC" published in March 2009. Regularly negotiated provisions are highlighted, and the practical reasoning behind each party's position is explored.
