I'm not a lawyer, but I think this guy's analysis is off the mark.
Consider this simple example: If what he says is true, there would be no market for used equipment because no one would buy such equipment for fears of blanket liens pulling the equipment back in cases where the seller becomes insolvent at some point down the road. And if history is any guide, given a long enough time horizon, a sizable percentage of businesses become insolvent.
I think what he may be thinking about are fire sales. i.e. when an insolvent business sells assets, the bank has first claim to the proceeds, or can block such sales from occurring at distressed prices.
Consider this simple example: If what he says is true, there would be no market for used equipment because no one would buy such equipment for fears of blanket liens pulling the equipment back in cases where the seller becomes insolvent at some point down the road. And if history is any guide, given a long enough time horizon, a sizable percentage of businesses become insolvent.
I think what he may be thinking about are fire sales. i.e. when an insolvent business sells assets, the bank has first claim to the proceeds, or can block such sales from occurring at distressed prices.