Strict Foreclosure Agreement
Customer AlertAs, which, in our previous customer alert, strictly spoken, spoke strictly: the rigorous silos can allow an efficient and fluid exit for lenders in the appropriate circumstances, the first step in carrying out the strictly enforced enforcement is that the lender considers exercising voting rights as part of the deposit agreement, withdrawing the former board of directors and appointing an independent board of directors acting on behalf of the borrower. The independence of the board of directors will ensure that the borrower takes seriously the lender`s desire to ensure the severity of the enforced execution. Therefore, when a lender wishes to carry out a strictly enforced execution and does want to “be on the back” of the pawnbroker under the current administrative document, it must ensure that it is able to do so in its entirety within the framework of the guarantee or guarantee agreement, applicable state law and underlying organisational documents. The lender must ensure that after a default, it can vote on the promised capital in order to change the composition of the board of directors. The lender may also want to reduce the number of board members, so that it must be sure that it has the necessary authority to change the enterprise contract or the borrower`s statutes. It is important to remember that the current shareholder still owns the implementation process at this stage and remains the existing shareholder; The lender exercises only voting rights and control over the rights of shares. When the lender plans to divest the equity allocation, the lender must also ensure that it has the power to authorize the purchaser of the shares as a shareholder of the company, in accordance with the relevant organizational documents. In order to achieve a strict enforced execution, the creditor must submit a proposal in which he indicates his desire for silos and which must be sent to the debtor and secondary debtors (debtors). If the guarantee is not a consumer good, the disclosure must also be addressed to other safe parties, known to the final creditor, either because they informed the creditor of the lockdown of their interests or because they have perfected their interest by submitting the corresponding documents to the Secretary of State. If a declared party opposes within 20 days, regardless of the motivation, a strict enforced execution is not permitted. Instead, the creditor must sell the property in an economically reasonable manner and recover its debts from the proceeds of that sale. This prevents subordinate creditors from suppressing their interest in the value of the property, since any money recovered beyond the amount of the silos` debt is returned to the remaining creditors at the time of the sale.
The lender must first submit to the borrower a proposal on the conditions of strict enforcement and indicate which assets of the business are accepted and which liabilities of the business are taken care of in exchange for the satisfaction of all or part of the existing debt.