Brett Switzer

Brett A. Switzer is a litigation associate in the Firm’s Atlanta office with broad experience litigating commercial disputes in state and federal courts and arbitration. Contact Brett at

Lenders frequently enter into loans secured by accounts receivables and/or chattel paper. A security agreement is signed, and the lender files a UCC financing statement, “putting the world on notice” of its security interest in the collateral. Per the loan documents, the borrower supplies borrowing base certificates, personal financial statements, access for field inspections, and independent third party audits to “verify” the borrowing base. Based on these assurances, the borrower receives access to a percentage of the agreed “borrowing base” on a revolving line. Even if the borrower defaults, the lender has only loaned 75%, 80%, or 85% of the value of the collateral, so the lender is protected – right?  Not so fast.