Forum Selection and Arbitration Clauses

In this edition of Tipping the Scales, Andrew Alper discusses a recent case involving a forum selection clause where the court held the clause was enforceable, and parties that litigate a case extensively cannot attempt to move the case to a different forum at a later date. The article also explores arbitration clauses and the importance of either using them or losing them.... read more

Finance Leases Versus Vendor Leases

Among the challenges we face in selling leasing to business executives who are unfamiliar with sophisticated equipment financings is the task of explaining how our equipment leases differ from a vendor lease or a vendor-financed installment sale financing. This article will touch on some of the aspects of third-party equipment financings and the explanations and arguments that might be presented to the uninitiated and his or her lawyers. ... read more

Fifth Circuit Recharacterizes Non-Insider Debt as Equity in a Case of First Impression in the Circuit

In the Matter of Lothian Oil Inc., the Fifth Circuit concluded that the power to determine claims in bankruptcy under §502 of the U.S. Bankruptcy Code is not limited to merely allowing or disallowing the claim, but can include the power to determine the proper treatment of the claim, including recharacterization of the claim as debt or equity. More important for creditors, the Fifth Circuit rejected as a matter of law the claimant’s contention, and the ruling of the district court, that recharacterization of a debt as equity is only available as a matter of law with respect to a claim held by an insider.... read more

Leasing in Indian Country

A lessor contemplating a finance transaction in Indian country should exercise due diligence by consulting with counsel familiar with tribes and tribal law, waivers of sovereign immunity, and their effect on the finance transaction. Ultimately, it is a business decision whether to lease or finance equipment to a tribe, tribal entity or tribal member where the equipment will be on a reservation. Understanding the issues surrounding such a decision is the first step toward a successful transaction.... read more

Involuntary Bankruptcy Proceedings

The filing of an involuntary bankruptcy petition by a creditor can be a very useful tool for a creditor to collect money from its recalcitrant debtor. But given some new cases, maybe a creditor should give the filing of an involuntary bankruptcy proceeding a second thought. ... read more

Resting Comfortably — The Four Paths to Perfection

The last edition of Dispatches From the Trenches discussed the Article 9 concept of attachment. In this edition, Ken Weinberg discusses the four primary ways in which an attached security interest may be perfected — filing, possession, control and automatic perfection.... read more

Seventh Circuit Affirms Use of a Powerful Tool for Judgment Creditors in ‘Rare’ Cases

When defendants Pethinaidu and Parameswari Veluchamy defaulted on their obligations to Bank of America in June 2009, the bank sued in federal district court for breach of contract, obtained judgment against the defendants 18 months later and began aggressively pursuing post-judgment enforcement remedies. What follows is a rare case eventually upheld in the Seventh Circuit Court of Appeals. ... read more

Attachment: Your Security Interest Isn’t ‘Perfect’ Without It

The key point of this edition of Dispatches From the Trenches is to provide a friendly reminder that attachment is a cornerstone to a perfected security interest and that it is worthwhile to consider the requisite steps to attachment and their timing. Ken Weinberg reminds us that equipment lease forms need to be carefully worded so that the grant of the security interest occurs prior to acceptance in the event goods are not accepted before or simultaneously with delivery.... read more

Involuntary Bankruptcy Proceedings Part I

The filing of an involuntary bankruptcy petition by a creditor can be a very useful tool for a creditor to collect money from its recalcitrant debtor. But given some new cases, maybe a creditor should give the filing of an involuntary bankruptcy proceeding a second thought.... read more

Chapter Nine: What You Might Need to Know About Municipal Bankruptcies

More and more, we hear news of the genuine risk of insolvency for some local governments, increasing the likelihood that some may seek relief under Chapter 9 of the Bankruptcy Code. Lesley Hawes’ article provides a general overview of Chapter 9 and its unique provisions applicable to municipal bankruptcies.... read more

Property and Transactions Subject to Collateral Categories Under Article 9

The last edition of Dispatches From the Trenches generally discussed what kind of property and transactions are, and are not, subject to Article 9 of the Uniform Commercial Code (UCC). This edition provides more detail on the various, highly defined collateral categories created by Article 9. ... read more

Describe Your Debtor Correctly or Lose Your Lien

Make no mistake, Andrew Alper warns, Perfection Land is not as perfect as the name suggests. In the following article, he provides clear direction and compelling case analysis aimed at helping lessors to avoid falling down a particularly expensive and time consuming rabbit hole.... read more

Defining a Security Interest?

In Ken Weinberg’s estimation, Article 9 of the Uniform Commercial Code is an extremely thoughtful and thorough statute. But, he warns, it’s not the end all, be all of security interests, and it is therefore prudent to visit what is and what isn’t covered by Article 9’s broad scope.... read more

Bankruptcy Plan Confirmation

The Third Circuit’s decision in the case In re Philadelphia Newspapers concurs with a similar holding in the case In re Pacific Lumber Co. in which the Fifth Circuit upheld an order confirming a plan proposing to transfer collateral securing claims of the secured lenders free and clear of liens, paying the secured lenders in cash the value of their undersecured claims, and precluding the lenders from credit bidding. ... read more

Attorneys Discuss Equipment Leasing, Financing and Litigation in 2011

As 2011 brings a hopefully brighter outlook for the equipment leasing and financing sector, we asked a group of attorneys how they see the new year in terms of the state of the economy and its affect on litigation and bankruptcy as well as their predictions for the equipment leasing and financing industry as well as the banking industry. While there are signs for optimism after a number of hard years, our participants note that conservatism in lending, especially, will still reign.... read more

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