“Strict foreclosure” under UCC Article 9 is a remedy that allows a secured party to accept collateral in full or partial satisfaction of a debtor’s secured obligation. The collateral can be acquired free of competing claims and without a sale or any judicial process. In exchange, all or a portion of the secured debt will be cancelled. Of course, all of this is subject to the specific requirements of UCC §$9-620 and 9-621, among them being a willing debtor and creditor. In the rancorous world of restructuring that is more often than not a major hurdle.

Just recently the New York Court of Appeals issued a ruling in a case involving strict foreclosure. In CNH Diversified Opportunities Master Account, L.P. v. Cleveland Unlimited, 2020 WL 6163305 (N.Y. Ct. App. Oct. 22, 2020), the Court of Appeals sustained a challenge by a group of minority noteholders claiming that they were entitled to consent to the foreclosure process.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]