The current economic situation, and the resulting increase in charge-offs and delinquency rates, now has many lenders scrambling to re-examine their policies and practices regarding protection of the collateral securing such loans. Ensuring the correct debtor name is sourced and filed on a UCC Financing Statement is the beginning part of that process.... read more
September 2010
Claims of exemption can be critical to a debtor that seeks a fresh start through bankruptcy. In addition, they allow a debtor to retain certain categories of property up to a specified dollar value, including equipment and other tools of the trade, vehicles, clothing and household goods. Such assets can provide essential assets for the debtor to start or continue to work and recover financially after bankruptcy.... read more
September 2010
Special required notices to guarantors and other byzantine defenses help to explain why so many guaranties are practically unreadable and why many are loathe to make changes to these documents. Take the much-examined case In Re TOUSA, Inc...... read more
September 2010
In this edition of Tipping the Scales, Lesley Anne Hawes returns to discuss the implications of the so-called “hanging paragraph” in BAPCA as ruled upon by the Second Circuit Court of Appeals in AmeriCredit Financial Services v. Thompkins. The ruling, Hawes contends, will make it more difficult for debtors going forward … and gives creditors a reason to cheer.... read more
July/August 2010
For many outside our industry, equipment leasing and finance is a niche with magical and confusing terminology and structures such as synthetic leases, operating leases, true leases, FMVs, TRACs, ALIASs and EFAs. When you add software leasing and finance into the mix, you encounter a niche within a niche. In the following article, Ken Weinberg briefly addresses some of the unique considerations raised by such software transactions. ... read more
July/August 2010
This edition of Dispatches From the Trenches analyses some of the statutory framework of the Uniform Commercial Code, which provides some comfort to funders willing to go blind … that is, don’t receive executed notices and Acknowledgments.... read more
June 2010
Andrew Alper returns to discuss a recent case in which the Minnesota court drew from Article 9 commercial reasonable standards to justify its ruling in an Article 2A lease transaction when such requirements do not exist in Article 2A … not good news for lessors that don’t comply with Article 9 disposition agreements.... read more
June 2010
As forensic accountants work to piece together what’s left of the company, and fleet lessors comb the country for missing trucks, the three executives blamed for orchestrating the multi-million factoring fraud that brought Tulsa-based transportation firm Arrow Trucking Co. to its knees are busy pointing fingers at each other. Using court records, press reports and the statements of those involved, the Monitor attempts to untangle the convoluted mess that was Arrow Trucking. ... read more
May/June 2010
Many lessors have sighed in relief as the Graves Amendment generally appears to have addressed various state laws, which previously held lessors of motor vehicles strictly liable for damage caused by their lessees. However, the recent case of U.S. v. Saporito, reminds us that strict liability laws are still out there.... read more
May/June 2010
The case In re Taylor illustrates that the determination that the transfer of the security interest should be avoided is only the first step in granting relief to the estate, and formulating the proper remedy for the estate is more complicated than it would appear both practically and legally.... read more
May/June 2010
This issue of Dispatches From the Trenches discusses sole proprietorships (d/b/a), and explores some of the increased risks associated with lessees that fall into this category. These risks include the location, name and movement of the debtor as well as the transfer of collateral.... read more
March/April 2010
The recent case of Banc of America Leasing & Capital vs. 3Arch Trustee Services, Inc. decided on January 5, 2010, describes what judgment lien creditors might say is an unfair result shutting BALCAP out of the money on its recorded judgment lien. Here is another case where conflicting statutes make for bad law. ... read more
March/April 2010
This edition of Dispatches From the Trenches discusses: whether an assigned lease is part of the assignor’s bankruptcy estate; and whether a lessee has a valid cause of action if a lessor misrepresents that the “lease” is really a loan. Mixed goods and services transactions and conflicting choice of law provisions are also mentioned.... read more
January/February 2010
Under the ride-through option, debtors had an option in bankruptcy … to retain vehicles without reaffirming the debt and without redeeming the collateral. They could simply continue to make the monthly payments. If the debtor defaulted, lenders could repossess. However the Ninth Circuit of Appeals recent decision in the Dumont case may have taken that option away.... read more
January/February 2010
This edition of Dispatches from the Trenches discusses: a borrower’s attempt to avoid its obligations under an equipment financing agreement by asserting the defenses of fraudulent inducement, mistake and unconsionability, and why lessors should make sure their leases have standard language noting that the equipment does not constitute a fixture and is removable from and not essential to the premises where the equipment is located.... read more
November/December 2009