News & Analysis as of

Collateral

Kennis bestuurder/aandeelhouder wordt toegerekend aan vennootschap (Dutch)

by Dentons on

Recently a ruling from the Gelderland Court has been published which deals with the unlawful conduct of a company in granting a right of mortgage for the security of a debtor's debt....more

Secured creditors beware

by Thompson Coburn LLP on

A series of cases decided by the federal district court in Chicago holds that a properly perfected secured creditor can waive its right of priority in collateral in favor of a judgment lien creditor if it fails to properly...more

Reaffirming Rash – Replacement Value Applies to Cram Down Valuations

by Selman Breitman LLP on

Cram down reorganization, a fundamental concept in bankruptcy law, allows a debtor to retain possession and use of collateral while reducing the principal value of the secured debt to the present value of the collateral. ...more

Ninth Circuit Applies Replacement Value in Cramdown Even If Lower Than Liquidation Value

In a decision that addresses the value to apply to a secured creditor’s collateral facing cramdown, the Ninth Circuit, sitting en banc, reaffirms that, in determining cramdown value, a secured creditor is only entitled to the...more

Section 1111(b) Election Not Available When Collateral Is Sold Post Petition

by Dechert LLP on

The facts in Salamon are straightforward. Salamon (“Buyer”) purchased real property from Behrend (“Seller”) that was already subject to two liens (the “Preexisting Debt”). Instead of paying cash at closing, the Buyer executed...more

Thailand Business Security Act 2017

by DLA Piper on

Welcome to the installment of DLA Piper Alerts on Thai laws. The continuing series seeks to provide an overview of laws of Thailand and legal updates on a targeted basis. The Business Security Act B.E. 2558 (2015) (the...more

Perfection of security interests when assets move jurisdictions

by DLA Piper on

When a financing statement is registered to perfect a security interest in collateral, it is the responsibility of the secured party to monitor the registration to ensure that a new financing statement is filed if the goods...more

Sixth Circuit Court of Appeals Holds Properly Perfected Assignment of Rents Not Property of Bankruptcy Estate

by Foley & Lardner LLP on

In a significant ruling impacting commercial real estate lenders in Michigan, the 6th Circuit Court of Appeals has ruled that an absolute assignment of rents that had been fully perfected (by demanding payment from tenants to...more

Stock: Are Your Interests Perfected in the Digital Age?

by Williams Mullen on

In a secured loan transaction, it is critical for you, as the secured lender, to ensure that your security interest in the collateral is perfected in accordance with the Uniform Commercial Code (UCC) requirements. In the case...more

Japanese Variation Margin Requirements Take Effect

by Jones Day on

Following the Basel Committee on Banking Supervision and the International Organization of Securities Commissions' March 18, 2015, release of revisions to the framework for margin requirements for non-centrally cleared...more

Federal Court Rules That the Ship Mortgage Act Preempts State Law Protecting Permits From Becoming Security Interest

by Lane Powell PC on

Last month, in Bank of the Pacific v. F/V ZOEA, 2017 WL 823298, Case No. 3:15-cv-05758-RSL, the United States District Court for the Western District of Washington ruled that the federal Ship Mortgage Act, 46 U.S.C. §§ 31321...more

The Hague Securities Convention – I. Lending Against Securities in the U.S. After April 1, 2017

The Hague Securities Convention, which goes into effect in the United States on April 1, 2017, will have significant impact on the law applied to all transactions – past and future – collateralized by securities held by an...more

Chris Lazarini Comments on Covenant of Good Faith and Fair Dealing

by Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini commented on a case in which the plaintiff claimed Merrill Lynch acted improperly in selling shares held as collateral for a loan when plaintiff had not defaulted on the loan. The...more

Are the Assets in Custody?

by Bryan Cave on

Lenders to funds and other borrowers often extend credit based on a security interest over assets that are held in custody. The lender is granted a security interest in the relevant custody account and all of the cash,...more

Cross-Border Loan Transactions: Supplementing Canadian Law Governed Loan Documents with Collateral and Guaranty Documents Governed...

by Dorsey & Whitney LLP on

Many cross-border loan transactions involve subsidiaries that are organized in the United States and/or U.S. based collateral. To the extent that the underlying loan is made to a Canadian borrower by a Canadian lender, these...more

Court Affirms Conviction In Case Involving $126 Million Loan For Shopping Mall Transaction, Rejecting Argument That Sentence...

In a summary order on March 8, 2017, the Second Circuit (Katzmann, C.J. and Pooler and Lynch, J.) affirmed the conviction and sentence for wire fraud in United States v. Frenkel. The case attracted some public attention...more

Secured Creditor’s Obligations to Dispose of Collateral in Commercially Reasonable Manner Triggered Only Upon Possession

by Butler Snow LLP on

In a recent, well-written opinion, the Tennessee Court of Appeals, Middle Section, WM Capital Partners, LLC v. Thornton, No. M2015-00328-COA-R3-CV, filed January 17, 2017, determined that a secured creditor’s duty to dispose...more

Understanding Agreements among Lenders: How the Unitranche Differs from an Intercreditor Agreement

by Blank Rome LLP on

When seeking a loan, borrowers require both good financial terms and an efficient closing process. Unitranche facilities help accomplish both goals by combining a senior/first lien credit facility with a junior/second lien...more

Financial Stability Board Finalizes Measure and Metrics of Non-Cash Collateral Re-Use in Securities Financing Transactions

by Shearman & Sterling LLP on

The Financial Stability Board published the final measure and metrics for non-cash collateral re-use in securities financing transactions. The measure and metrics are part of the FSB's global securities financing data...more

"Possession or control" of Financial Collateral – Matter Number C-156/15

by White & Case LLP on

The Court of Justice of the European Union ("CJEU") has given its first ever ruling on the question of what constitutes "possession or control" of financial collateral for the purposes of the Financial Collateral Directive -...more

The Problem of Lender "Inquiry Notice" Status

by Ruder Ware on

If a lender is fully secured, can it just ignore suspicions of borrower misconduct? The danger is that a lender could lose its collateral under these circumstances and be treated as an unsecured creditor. This is exactly...more

Debtors Who Misuse Collateral Can Lose the Benefit of Discharging their Debt in Bankruptcy

by Burr & Forman on

On November 21, 2016, in a case entitled In re Monson, the Eleventh Circuit Court of Appeals affirmed the Bankruptcy Court’s decision, which held that a debtor’s conduct constituted a willful and malicious injury to a...more

Towards a new, more flexible legal framework for secured lending in Belgium

by White & Case LLP on

Upon entering into force, the law of 11 July 2013 on security interests in rem on movable assets will provide Belgium with a modern legal framework that will greatly facilitate secured lending. Although not as...more

Protecting an Interest in a Ground Lease – A Lender’s Perspective

by Poyner Spruill LLP on

Lenders are often asked to provide financing secured by a leasehold interest in land evidenced by a ground lease. A ground lease is an agreement between the fee owner of real estate (the ground lessor or landlord) and its...more

Historic Risk Management Rules and Practices Go Live on March 1, 2017 in Leading Markets

by Seyfarth Shaw LLP on

For the first time in the history of derivatives, regulators in leading markets will require assets to collateralize many derivatives which are not settled in a regulated clearinghouse. It is not possible to overstate...more

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