particular when it takes the form of a blanket lien
on a debtor's
Voting rights must meet certain requirements, including unanimous approval for (1) any sale or lease of the property, (2) any negotiation or renegotiation of indebtedness secured by a blanket lien
, (3) the hiring of a manager, or (4) the negotiation of any management contract.
Revenue Procedure 2002-22 requires that any debts secured by a blanket lien
must be satisfied when the property is sold, and the remaining proceeds must be distributed to the co-owners.
Co-owners must share in any debt secured by a blanket lien
in proportion to their undivided interests.
5 Co-owners must approve the hiring of any manager, the sale or other disposition of the property, any leases of a portion or all of the property or the creation or modification of a blanket lien
The largest secured creditor, Los Angeles-based Coast Business Credit, has a blanket lien
on all the assets that is worth about $3 million.
Unanimous vote of the co-owners is required for sale, lease, release of any of the property, negotiation or renegotiation of debt secured by blanket lien
, hiring of a manager, or negotiation of management contract.
The co-owners must retain the right to approve the hiring of any manager, the sale or other disposition of the property, any leases, and the creation or modification of a blanket lien
Under prior law, the courts held that a supplier's right of reclamation was junior in priority to the prior blanket lien
of a bank.