Monday, May 24, 2010

Court reviews whether creditor's involvement in the sale of collateral was commercially reasonable

REGIONS BANK v. TRAILER SOURCE, ET AL. (Tenn. Ct. App. May 24, 2010)

A junior creditor sued the senior creditor claiming that the senior creditor's involvement in the sale of collateral, used trailers for tractor-trailer trucks, was commercially unreasonable. We agree with the trial court that the senior creditor, a bank, was subject to the commercially reasonable disposition of collateral rule. However, we hold that the bank's approval of the sale, arranged by the debtor, was not commercially unreasonable. Consequently, we reverse the judgment of the trial court.

Opinion available at: