Collateral Descriptions May Need More Specific Drafting
Law360 (June 4, 2019, 12:55 PM EDT) -- Secured creditors frequently don’t focus too much on the collateral descriptions in financing statements. These descriptions are often drafted using the simplest terms for a number of reasons — the creditor opts for administrative simplicity to minimize the cost and hassle of future amendments to financing statements in transactions where the debtor regularly exchanges collateral of the same type; the debtor doesn’t want to disclose specific pieces of collateral or investments or the descriptions were more of an afterthought than the focus of the deal.
And for years, secured creditors didn’t really have much to worry about, because of a long...
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