USA Law and Practice Contributed by: Stelios Saffos, Dan Seale, Peter Sluka and Alfred Xue, Latham & Watkins
6.6 Practical Considerations/Limitations on Enforcement For personal property, secured creditors must generally proceed in a commercially reason - able manner or risk losing their advantage and potentially being liable for damages. This vague standard is generally left to courts to resolve and an antagonistic debtor or holder of a compet - ing interest may raise any number of plausible arguments that a foreclosing secured creditor’s enforcement process was commercially unrea - sonable in one way or another. A secured lender pursuing a public sale of collat - eral may for example decide to run a slower sale process, hire a professional sell-side advisor and/or spend more time and resources advertis - ing or finding potential bidders in an effort to pre- empt challenges of commercial unreasonable - ness. In developing a commercially reasonable process it is generally advisable for the secured party to consider what steps it would take if it were selling its own assets. 6.7 Claims Against Secured Lenders Post-Enforcement There is no applicable information in this juris - diction. 7. Bankruptcy and Insolvency 7.1 Impact of Insolvency Processes The filing of a bankruptcy case under the US Bankruptcy Code will result in an automatic stay that prevents lenders (and all creditors) from enforcing any security without prior relief from the bankruptcy court or otherwise taking an affirmative action against property of the debt - ors’ estate (including terminating contracts, etc). Relief from the stay is available upon application and a showing of cause, including the lack of
tions and anti-money laundering and KYC rules that apply to lenders and persons acting in the US market generally. Cross-border lending is generally common and is mainly subject to customary sanctions and anti-money laundering and KYC rules that apply to lenders generally. 6.5 Timing and Cost of Enforcement Enforcement can take many forms and therefore it is difficult to say how long a typical enforce - ment process would take. In the case of a foreclosure sale, among other requirements, notices must be sent to debtors and other parties with an interest in the collateral, in most cases at least ten days prior to the sale. In the case of a public sale, the secured party will also need to publish a public notice in appropri - ate newspapers and periodicals. However every aspect of the foreclosure process must be com - mercially reasonable and, especially where the collateral is of high-value, unique and/or com - plex, a commercially reasonable process may take much longer than ten days. In the most likely case of enforcement on the equity interests of a borrower and its subsidi - aries a commercially reasonable enforcement process in the form of a public sale may take approximately six to eight weeks (although this can be significantly faster or slower depend - ing on the facts). Typical costs include attorney costs in conducting the enforcement process, costs for advertising in periodicals or other pub - lications (in the case of a public sale) and pos - sibly hiring professional advisors in connection with finding potential buyers.
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