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Joseph A. Ernst
Joseph A. Ernst, Esq.

Joe's primary practice is SBA lending. In addition to his representation of SBA lenders nationally, Joe brings significant real-estate experience to his practice, having represented clients that include national retailers for whom he has handled their retail leasing needs nationwide. In prior positions, Joe has successfully represented national corporations and real estate investment trusts in real estate transactions for development of new shopping centers and redevelopment of existing shopping center, leasing, ground leasing, subleasing assignment and assumption of leases, office leasing for mixed-use retail properties and sales to big box and anchor tenants, as well as general contract negotiations and transactional matters in such areas as construction, finance, store operations, procurement, information technology and marketing and merchandising. He has also successfully undertaken the acquisitions of several retail chains and other companies.  




  • Pennsylvania
  • Connecticut 


To read more about Joe, click here




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Best Practices: When is the Sale of an SBA Loan Obligor's Business Personal Property "Voluntary"?  


By: Jeffrey S. Feldman, Esquire  


Jeffrey S. Feldman
Jeffrey S. Feldman, Esquire

SBA Standard Operating Procedure ("SOP") 50 57 allows an SBA lender to liquidate a loan obligor's business personal property collateral ("BPP") in several different ways, including a release of the lender's lien for consideration, the voluntary sale of the BPP by the loan obligor, a UCC sale, and judicial foreclosure. An SBA lender needs to have a firm understanding of which liquidation method it is pursuing so that it can document its loan file in accordance with the regulatory requirements for the applicable method.  In particular, an SBA lender needs to be careful to distinguish between a voluntary sale and a UCC sale, as the former requires different documentation from the latter, especially with regard to the treatment of other lienholders with competing interests in the BPP.


In a voluntary sale, an SBA lender must document that all other lienholders have provided their consent to the sale of the BPP.  SOP 50 57, Chapter 18(C)(2)(c), p. 105.  The consent of the other lienholders is necessary to avoid, among other things, potential attempts by those lienholders to rescind the sale or assert claims against the loan obligor or the SBA lender for conversion of their property.  In contrast, in a UCC sale, all parties with a  lien on the BPP are not required to provide their prior consent to the sale.  Instead, they are only required to be given reasonable notice of the sale in accordance with the UCC and applicable state law.


Occasionally, if the circumstances of the sale do not involve a straightforward contract between the loan obligor and a third party for the sale of the BPP, SBA lenders can become unclear on whether the BPP at issue is being sold voluntarily by the loan obligor as the title owner of the BPP or sold involuntarily by the lender as a secured creditor with an interest in the BPP. In determining which situation is applicable, SBA lenders should consider the following facts:


  1. Who Has Contracted With The Auctioneer Or Broker?  If there is a contract with an auctioneer or broker to sell the BPP, who is the party to that contract?  If the obligor is the contracting party, the SBA may view the transaction as being a voluntary sale.  If the lender is the contracting party, the SBA is more likely to conclude that the lender is liquidating as a secured creditor, either via a UCC sale or otherwise.
  2. Who Is Sending Out The UCC Notices To Other Lienholders?  If the BPP is being liquidated through a UCC sale, whose name is on the notices being sent to other lienholders with an interest in the BPP?  Again, if the obligor's name is on the notices, the SBA may view the transaction as being a voluntary sale by the obligor.
  3. Who Has Possession And Control Of The BPP Being Sold?  If the obligor controls the property instead of the lender, the transaction may be considered to be a voluntary sale.  Thus, if the loan obligor is cooperating with the SBA lender and allowing the sale of the BPP to occur without the repossession or removal of the collateral (as is typically the case), the SBA lender should document that fact in its file.

Lenders should always be sure to ask their legal counsel about any potential lender liability issues that might arise with regard to these situations, as well as any regulatory compliance issues that could potentially jeopardize their SBA guaranty. 


For more information regarding SBA loan liquidation, please contact Jeff at or at 267-470-1231.


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Presented By:  SBA Quality Circle Training 
Instructor:  Ethan W. Smith
Date:  November 20, 2014 at 9:00 am

For more information about this event and/or to register, click here.

Presented By:  SBA New Jersey District Office  
Instructor:   Ethan W. Smith
Date:    December 3, 2014
Location:   Tropicana Casino & Resort in Atlantic City

For more information about this event and/or to register, click here.

Date:  August 12-14, 2015
Location:  Hyatt Regency, Baltimore, Maryland

For more information about this event, click here.

Lynn Ozer / Executive Vice President / Susquehanna Bank 


Knowing that the attorneys at Starfield & Smith, PC are dedicated to keeping abreast of every change and nuance in ALL of the SBA's SOPs gives me the comfort that I need when assigning a loan to their firm for documentation, servicing situations or collection dilemmas. When the attorneys from this firm are the ones teaching the trade association "how to" I know that my confidence in their work product is justified. Our bank has used this firm for many years and have received excellent service and "spot on" advice. Their attention to every detail is the reason SBA lenders should depend on this firm! 


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