Blanket or “all assets” security interests are among the most common, if not the most common, type of lien required of borrowers by secured lenders in commercial transactions. Describing the collateral for an all assets lien intuitively might seem easy. However, getting collateral descriptions correct under the rules of Article 9 of the Uniform Commercial Code (UCC) has challenged secured lenders for decades, and all assets liens are no exception. Two recent bankruptcy court decisions illustrate these challenges. In particular, they reflect the importance of distinguishing between a blanket lien collateral description in a security agreement and one in a UCC financing statement.

Background

Under Article 9, in order to create and perfect a security interest on most collateral, a secured creditor must provide a collateral description.

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