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.
In Fitch's view, the limited amount of unsecured debt in Pennant's capital structure creates increased risks for the company's unsecured creditors, as the secured debtholders have a blanket lien
on all the assets not included in the SBA subsidiary.
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
The notching of the unsecured debt rating below the IDR reflects the still heavy concentration in secured debt and the blanket lien
on portfolio investments afforded to all secured lenders.
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.
Notching of the unsecured debt rating below the IDR and the Recovery Rating reflects subordination of unsecured debt to existing secured debt, which has a blanket lien
on all portfolio assets.