Valuation of encumbered assets

(i) Protecting the value of the encumbered asset

Costs and expenses of maintaining value of the encumbered asset

(h) Encumbered asset means property that is subject to a security right.

Protection from diminution of the value of encumbered assets (paras.

During the period of the stay it is possible that the value of the encumbered asset will diminish.

She bought the clothes Miss Yuri had pawned, then sold them to the girls here.

If a security right is effective against third parties at the time when the encumbered assets become fixtures in movables, the security right in the encumbered assets remains effective against third parties.

Other approaches focus on the use of the proceeds of the sale of the encumbered assets (see below, paras.

However, if encumbered assets become part of another product or mass, the security right becomes a security right in the product or mass proportionately up to the value of the encumbered assets at the time they are physically united with other goods .

(a) Assets of the debtor, including the debtor's interest in encumbered assets and in third party owned assets

(ii) The seller or financial lessor of the same encumbered asset that has retained title to it pursuant to an acquisition security right

This approach is only necessary where the value of the encumbered asset is less than the amount of the secured claim.

like the encumbered stream can sing our proudest souls' anthems.

(b) Dispossession of the grantor if the encumbered assets are specific items of tangible movable property

Central to the notion of protecting the value of encumbered assets is the mechanism for determining the value of those assets to enable the court to consider whether and how much to provide to secured creditors as relief against the diminution of the value of encumbered assets during the proceedings.

The law should apply to all parties and types of security rights, secured obligations and encumbered assets.

Payment of interest may be limited, however, to the extent that the value of the encumbered asset exceeds the value of the secured claim.

(i) Another secured creditor with a security right in the same encumbered asset (whether as an original encumbered asset or proceeds)

(v) Any buyer or other transferee (including a lessee or licensee) of the encumbered asset.

Where the estate is able to maintain the value of encumbered assets, it can be approached in several ways.

Imagine whenever you meet any other person, any time you meet a person, your habitual, instinctive first thought is, I want you to be happy.

(65) The insolvency law should enable a security interest to be granted for repayment of post commencement finance, including a security interest on unencumbered assets, including after acquired assets, or a junior or lower priority security interest on already encumbered assets of the estate.

The insolvency law should enable a security interest to be granted for repayment of post commencement finance, including a security interest on an unencumbered asset, including an after acquired asset, or a junior or lower priority security interest on an already encumbered asset of the estate.

Immediately upon commencement, the encumbered asset is valued and, based on that valuation, the amount of the secured portion of the creditor's claim is determined.

The law should provide that a secured creditor's priority with respect to an encumbered asset extends to the proceeds of the asset subject to the requirements of recommendation 54.

(53) The insolvency law should specify that encumbered assets may be further encumbered, subject to the requirements of recommendations 65, 66 and 67.

This approach avoids some of the complexities associated with ongoing valuation of the encumbered assets that may be required under the first approach noted above.

Imagine whenever you meet any other person, any time you meet a person, your habitual, instinctive first thought is, I want you to be happy.

The question of providing security over unencumbered assets or assets that are not fully encumbered is not one that generally should require approval of the court.

(c) Transfer of control to the secured creditor if the encumbered assets are certain intangible obligations, other than receivables, owing to the grantor by a third person a bank account

(iii) Another creditor of the grantor asserting a right in the same encumbered asset (e.g. by operation of law, attachment or seizure or a similar process)

Some States that preserve the value of the encumbered asset as outlined also allow for payment of interest during the period of the stay to compensate for delay imposed by the proceedings.

In reorganization proceedings also, it may be in the best interests of the estate to sell encumbered assets of a similar nature to provide needed working capital.

Frequently, the only unencumbered assets that may be available for securing post commencement finance will be assets recovered through avoidance proceedings.

Another concern is the potential ability of a secured creditor to exercise influence over a business, to the extent that the creditor may seize, or threaten seizure of, the encumbered assets of that business upon default.

One approach is to protect the value of the encumbered asset itself on the understanding that, upon liquidation, the proceeds of sale of the asset will be distributed directly to the creditor to the extent of the secured portion of their claim.

Since, at the time of eventual distribution, the extent to which the secured creditor will receive priority will be limited by the value of the encumbered asset, that depreciation can prejudice the secured creditor.

This valuation technique is less applicable to protection of either the value of the encumbered asset or the secured claim than it is to disposal of assets of the estate by the insolvency representative.

(a) The creation of a security right in proceeds is governed by the law of the State whose law governs governing the creation of the security right in the original encumbered asset from which the proceeds arose and

H. The insolvency law should provide that, in determining the liquidation value of encumbered assets in a reorganization proceeding, consideration should be given to the use of those assets and the purpose of the valuation.

Dispossession of the grantor is sufficient only if an objective third person can conclude that the encumbered assets are not in the actual possession of the grantor.

In some liquidation cases, the insolvency representative may find it necessary to use or sell encumbered assets (see below, paras. 83 86) in order to maximize the value of the estate.

(d) Registration of a notice of the security right in a specialized title registry if the encumbered assets are specific items of movable property for which title is established, under other law of the enacting State, by registration in such a registry (e) Entry of a notation of the security right on the title certificate if the encumbered assets are specific items of tangible movable property for which, under other law of the enacting State, title is evidenced by a title certificate or

Assets, in particular encumbered assets, may need to be valued in the course of proceedings to determine the value of the secured claim (and any related unsecured claim) and issues of protection related to any diminution in that value.