ENHANCING

HQ: Northampton, MA

800-594-7473 • secondwindconsultants.com

Through Article 9 of the UCC, Second Wind Consultants is able to offer a holistic and efficient pre-packaged reorganization solution that avoids historical inefficiencies associated with mitigating distress.

Article 9 of the Uniform Commercial Code was originally drafted as a liquidation sale mechanism for secured creditors, but this tool held greater untapped potential for both distressed businesses and asset-based lenders. Second Wind Consultants adapted this liquidation sale model, transforming it into a business preservation tool that resolves assets of all subordinate liabilities through a going-concern transaction. By result, Second Wind’s Article 9 reorganizations simultaneously recover maximum value for exiting lenders while creating opportunities for new lenders to originate credits within relaunched business operations with clean new balance sheets.

The Article 9 process offers a holistic and highly efficient solution to distress. The pre-packaged transaction avoids the historical inefficiencies associated with other paths to mitigating distress, such as complex cramdowns, global settlements or judicial processes. Instead, the Article 9 process aligns the interests of all parties, shifting the context of distress from an adversarial one to one of cooperation and mutual benefit. Article 9 reorganizations are both industry agnostic and can work to the benefit of all lenders, from traditional banks to factors to asset-based lenders.

In 2023, Second Wind is rolling out a new tool for asset-based lenders that will facilitate previously impossible take-outs of conventional bank credits: the “expanded take out.” The new tool will allow lenders to offer referring banks a path to exit regardless of sub-debt, as such considerations will be removed from the assets in between a bank and an asset-based lender under UCC Article 9. Further streamlining the exit, the process will not require banks to conduct an Article 9 sale. Instead, they may exit via a note sale prior to the Article 9 reorganization and ABL take-out.

“Our process represents a long overdue evolution in the secured finance ecosystem, providing for efficient exits and new originations that were previously impossible.”