Tag Archives: collateral

To Improve or Not to Improve? Pre-Disposition Preparation and Processing of Collateral

What constitutes commercial reasonableness in preparing and processing collateral for disposition is not expressly set forth in the Uniform Commercial Code. A general rule of thumb has developed under UCC lore: the secured creditor about to dispose of a car on default should wash the car, but probably should not overhaul its engine. This crude example is clear enough, but in between the two extremes of washing a car and overhauling its engine lies an immense middle ground.