[CLBS] If creditor has a UCC-1 against an entity, can it offset from accounts in principals' names?

[Holly Roark]

The practical aspect to your assessment is exactly right. Even if not legal, getting money back is a lot harder than just moving it so it doesn't get snatched in the first place. 

Best regards, 

Holly Roark
Attorney at Law

Roark Law Offices
Phone: (208) 536-3638
Fax:  (208) 538-3638
E-mail:  holly at roarklawboise.com 

*Bankruptcy Specialist, certified by State Bar of California Board of Legal Specialization
www.roarklawoffices.com

Sent from my iPhone

> On Oct 6, 2016, at 2:23 PM, Randy French <rfrench at rfrenchlaw.com> wrote:
> 
> Holly,
> 
> Legally, the bank can only offset against parties that are legally liable on
> the debt, not principals or agents or affiliates.  It seems surprising that
> a bank would not have the personal guarantees of all principals. It might
> also have loans to the affiliates and perhaps some agreements that broadly
> construed give it an argument that it can act.
> 
> I would advise the client and its principals and affiliates to move all
> funds away from the bank that Debtor owes money to.  Legally or not, once
> the Bank grabs the money then all of the other parties are, what is the
> legal term, "screwed!"
> 
> 
> Thanks.
> Randy French
> 
> Law Office of Randal J. French, P.C.
> Attorneys at Law
> AP.O. Box 836 PBoise, ID 83701 B(208) 859-6881  
> 
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> 
> -----Original Message-----
> From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Holly Roark
> Sent: Wednesday, October 05, 2016 4:53 PM
> To: clbs at admws.idaho.gov
> Subject: [CLBS] If creditor has a UCC-1 against an entity, can it offset
> from accounts in principals' names?
> 
> Bank has a blanket lien on all assets and filed a UCC-1 against Debtor.
> Debtor closed bank account with Bank.  UCC-1 statement only names Debtor and
> says nothing about any other entities or principals of borrower/debtor.
> Debtor has accounts at Bank in the name of the principals of Debtor, and in
> the name of other entities that the principals own. May Bank legally offset
> any sums owed by Debtor from the other accounts in the name of the
> principals and in the name of the other entities that the principals own?  I
> need to talk to bank about a cash collateral issue before we file CH 11, but
> I don't want to set Bank loose on the other accounts by having this
> discussion.  Currently, Debtor is not in default to Bank.
> 
> 
> 
> Best regards,
> 
> HOLLY ROARK
> 
> Attorney at Law 
> 
> Certified Bankruptcy Specialist -
> 
> By the State Bar of California Board of Legal Specialization
> 
> 
> 
> ROARK LAW OFFICES
> 
> 950 Bannock Street | Suite 1100 | Boise, Idaho 83702
> 
> Phone:  (208) 536-3638
> 
> Fax: (310) 553-2601
> 
> E-mail:   <mailto:holly at roarklawboise.com> holly at roarklawboise.com Website:
> <http://www.roarklawboise.com/> www.roarklawboise.com
> 
> 
> 
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