Brief Fact Summary. The Laniers, (Appellants) are guarantors who are challenging the sufficiency of a notice of disposition provided by Federal Deposit Insurance Corp., (Appellee), in conjunction with the sale of collateral.
Synopsis of Rule of Law. Before a creditor can sell the collateral underlying a secured loan, it must give the debtor and guarantor reasonable notification of the time after which any intended disposition is to be made. Notice is not defective simply because it does not specifically state that the goods would be sold privately. For a private sale, the creditor only need provide notice of the time after which a private sale or other intended disposition is to be made.
Mere inadequacy of consideration alone does not render a foreclosure sale void if the sale was legally and fairly made.View Full Point of Law
Whether in a notice of disposition a seller must indicate whether the disposition of collateral will be by public or private sale.
Whether a notice of disposition is defective because the sale takes place four months rather than ten days after the letter is sent.
No. The notice is not defective simply because it does not specifically state that the goods would be sold privately.
No. The sale of collateral four months after notification was not so untimely as to mandate a finding that the creditor was required to renotify the debtor of the planned disposition.
Discussion. Because the notice was adequate to inform reasonable businesspersons that their property would be sold within ten days or more, it was sufficient. The notice is not defective simply because it failed to state that the goods would be sold pursuant to a private sale. Four months after notification of the debtor was not so untimely as to mandate a finding that the creditor was required to renotify the debtor. Substantial lapses between notice and sale are permissible.