UCC Issues in Mezzanine and Mortgage Loans: Equity Interests and Deposit Accounts as Collateral
Documenting and Perfecting Security Interests Under Articles 8 and 9
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will prepare real estate finance counsel to resolve UCC issues that arise in mezzanine and mortgage loans when LLC equity interests and deposit accounts are part of the collateral. The panel will discuss Article 8 requirements for the perfection of equity collateral and Article 9 rules for perfecting interests in deposit accounts. The program will outline best practices for drafting pledge agreements for equity collateral and deposit account control agreements.
Outline
- Perfecting security interests in partnership and LLC interests
- Overview of UCC Article 8 requirements
- Drafting the pledge agreement
- Amendments to the borrower’s operating agreements
- Common pitfalls and strategies to best protect the lender
- Perfecting security interests in deposit accounts
- Importance of control
- Key provisions of control agreement
- Secured party’s concerns
- Depositary bank’s concerns
- Borrower’s concerns
Benefits
The panel will review these and other key issues:
- What challenges arise when borrowers seek to use equity interests as collateral for mezzanine loans?
- What steps should lenders’ counsel take to avoid common pitfalls in creating and perfecting security interests in partnership and LLC interests?
- How does the lender obtain control over the borrower’s deposit account—and why is control critical?
- What circumstances make perfection by control preferable and when is control necessary for perfection of a security interest in a deposit account?
Faculty
David A. Barksdale
Partner
Ballard Spahr
Mr. Barksdale focuses his practice on transactional finance, including structured and syndicated finance, and... | Read More
Mr. Barksdale focuses his practice on transactional finance, including structured and syndicated finance, and project finance in the real estate and energy industries. In addition to representing both lenders and borrowers in a range of transactions, he has experience with acquisitions, development, leasing, workouts, and restructurings. He represents life insurance companies, financial institutions, and investment banks as lenders and equity investors in project finance, and as lenders in the origination of real estate finance for balance sheet or securitization.
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Brooks S. Clark
Shareholder
Polsinelli
Mr. Clark focuses his practice on commercial lending, real estate and structured finance, leveraged leasing, building... | Read More
Mr. Clark focuses his practice on commercial lending, real estate and structured finance, leveraged leasing, building and construction loans, and mezzanine lending and preferred equity. He has significant experience handling loans secured by LLC interests (mezzanine loans) and deposit accounts.
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Allen J. Dickey
Shareholder
Polsinelli
Mr. Dickey practices in all aspects of real estate finance, securitization, acquisition, leasing and development. He... | Read More
Mr. Dickey practices in all aspects of real estate finance, securitization, acquisition, leasing and development. He also has experience in equity financing, mortgage backed securitization, mortgage, and mezzanine and subordinate loan origination. He has published several articles regarding real estate, structured finance, commercial lending, and loan enforcement, and often lectures to attorney and industry groups regarding real estate, lending and loan enforcement topics. Mr. Dickey’s experience includes working with lenders, developers, investors and business owners on all aspects of real estate transactions, including mortgage and mezzanine loan origination and enforcement, CMBS lending, mortgage backed securitization, construction finance, development finance and loan workouts, modifications and extensions.
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Grant Dowd, Esq.
Ballard Spahr
Mr. Dowd concentrates his practice on real estate finance and investment transactions. He regularly represents... | Read More
Mr. Dowd concentrates his practice on real estate finance and investment transactions. He regularly represents investment banks, commercial banks, and other institutional lenders, as well as borrowers, in a broad range of transactions, including the origination of balance sheet, joint venture, CMBS, acquisition, bridge, construction, revolving, leasehold, and mezzanine loans, project finance,and loan participations and syndications. He also has significant experience representing clients in connection with the acquisition, disposition, and leasing of real property.
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