Lack Of “Future Advances” Clause in Security Agreement Costs Bank Collateral for $950,000 Loan
Section 9-204(c) of the Uniform Commercial Code makes it possible to secure future advances, even if the advances are not made pursuant to a commitment. However, the security agreement creating the security interest must “provide that collateral secures... [such] advances.” A March 22, 2012 decision of the United States Bankruptcy Court for the Central District of Illinois [...]