Drafting Errors - Routinely Cost Lenders’ Post-Bankruptcy Attorney’s Fees and Interest


Originally published in Community Banker - Spring 2013.

When a bankruptcy intervenes to prevent the continuation of a restructuring or loan enforcement effort, it is too late to supplement or strengthen loan documentation. Lenders are then stuck with what is — and sometimes more significantly — what is not in their existing loan documentation. Unfortunately, critical loan enforcement remedies and claim amounts may depend on not just the underwriting decisions relating to the loan itself or the value of any pledged collateral, but also on the scope and precision of what is sometimes derisively referred to as the “boilerplate provisions” in loan documents.

Sometimes lawyers prepare documents that contain paragraphs of mind-numbing complexity over simple, direct language. However, in the context of post-default loan enforcement, simple and direct language is at the core of the problem, resulting in omission or inadvertant waiver of important rights when the time comes to enforce the loan.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Lane Powell PC | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.