Protecting the lender’s position through commercially reasonable disposition.
Article 9 of the Uniform Commercial Code provides secured lenders with the right to foreclose on collateral when a borrower defaults. Lighthouse manages the commercially reasonable disposition of collateral on behalf of secured creditors — handling notice requirements, asset marketing, sale execution, and documentation to protect the lender’s legal position at every step.
Our Article 9 foreclosure services.
1. Collateral Assessment & Valuation: We evaluate the secured collateral — equipment, inventory, receivables, intellectual property — to determine fair market value and the optimal disposition strategy.
2. Notice & Compliance: We manage all UCC notice requirements to the debtor and other secured parties, ensuring strict compliance with Article 9’s procedural safeguards.
3. Marketing & Sale Execution: We market collateral through appropriate channels: private sales, public auctions, or negotiated transactions to achieve commercially reasonable outcomes that withstand legal challenge.
4. Documentation & Reporting: We prepare comprehensive documentation of the disposition process, including valuation analyses, marketing efforts, and sale terms to build a defensible record for the lender.We review, validate, and prioritize creditor claims in accordance with applicable law and the terms of the assignment.Implement immediate cost reductions, cash-preservation measures, and lender communication protocols.
5. Surplus & Deficiency Administration: We manage the distribution of sale proceeds, handle surplus payments to junior creditors or the debtor, and document any deficiency for the lender’s records.
The best outcomes start with early action.
The sooner we're at the table, the more options remain available. Reach out for a confidential conversation with our team
What secured lenders need to know.
The UCC requires that every aspect of the disposition: method, manner, time, place, and terms be commercially reasonable. This means the lender must demonstrate that it took appropriate steps to market the collateral and obtain a fair price. Lighthouse manages the process to ensure the disposition meets this standard and is defensible in court.
Article 9 foreclosure is appropriate when a borrower has defaulted on a secured obligation and the lender wants to realize value from its collateral without initiating bankruptcy proceedings. It’s often faster and less expensive than a bankruptcy-driven asset sale.
Yes. If the disposition is found not to be commercially reasonable, the debtor or junior creditors may challenge it — potentially limiting the lender’s ability to pursue a deficiency. Lighthouse’s role is to ensure the process is thorough, well-documented, and defensible against such challenges.
Timelines depend on the type and volume of collateral, but most dispositions are completed within 30–90 days after proper notice is given. Complex portfolios involving multiple asset classes or locations may take longer.
Yes. We manage the full process end-to-end — from collateral valuation and notice preparation through marketing, sale execution, and final documentation. This integrated approach reduces risk for the lender and ensures nothing falls through the cracks.
