Between July 2007 and July 2008, N&N Partners LLC executed three agreements to finance the purchase of

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Between July 2007 and July 2008, N&N Partners LLC executed three agreements to finance the purchase of commercial equipment. The collateral securing N&N's obligations under each agreement was the equipment being purchased. All three agreements were subsequently assigned to Colonial Pacific Leasing Corporation. N&N defaulted under the agreements by failing to make the payments as they came due in September 2009. The collateral was repossessed and sold in December 2009 and March 2010. Before each sale, N&N received notice and had an opportunity to redeem the collateral. After the sales, the proceeds were credited to N&N's account, but a debt remained. Colonial filed an action seeking a deficiency judgment in the amount of $101,094.14. N&N admitted its default but claimed that the sales of the collateral were not commercially reasonable due to technical flaws in the notices of sale, the fact that the sales occurred too early in the morning to allow for full public participation, and that Colonial failed to appraise the equipment before the sales, thereby preventing it from proving the fair market value of the equipment prior to the sales. Colonial alleged that the sales were commercially reasonable as N&N received timely notice; the sales occurred at a time, place, and in a manner typical for this type of collateral; and the proceeds equaled or even exceeded the collateral's fair market value. Should technical errors in the notices of sale render the sales commercially unreasonable? Should sales occur later in the day to maximize participation? Should the creditor have to provide an appraisal of all collateral sold in order to satisfy the commercially reasonable sale requirement? [Colonial Pac. Leasing Corp. v. N&N Partners, LLC, 981 F. Supp.2d 1345 (N.D. Ga. 2013).]

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Dynamic Business Law The Essentials

ISBN: 978-1259917103

4th edition

Authors: Nancy Kubasek, Neil Browne, Daniel Herron

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