Blanket Lien

(redirected from Blanket Liens)

Blanket Lien

A lien on all or nearly all of a debtor's assets. In the event of default, the creditor has the right to take, and, at its discretion, sell off any or all of the assets covered under the blanket lien. Generally speaking, a blanket lien covers multiple assets that are specifically enumerated on the loan agreement, though, occasionally, a creditor can take other assets not listed as well. Some businesses use blanket liens to receive short-term financing.
Mentioned in ?
References in periodicals archive ?
The failure of reclamation, which pinches Section 503(b)(9) between the Code's dueling interests in ensuring trade creditors get paid and ensuring that debtors can successfully exit Chapter 11, is ultimately tied to the advent of widespread reliance on secured credit and blanket liens among even small debtors.
necessary to analyze blanket liens using a modified version of the
If blanket liens were prohibited, debtors could still
particular when it takes the form of a blanket lien on a debtor's
Banks like to be very secure when lending by taking blanket liens on all assets.
Parties that perform work on multiple properties (as is often the case with subdivision or utility work) should be aware, however, that the Act authorizes blanket liens for work performed on multiple properties pursuant to a single contract.
However, as the recent case from the Virginia Supreme Court demonstrates, the right to use blanket liens is subject to significant limitations.
Blanket liens continue to be an essential tool for use by suppliers to secure payment.