News & Analysis as of

ISDA Master Agreement: English court considers meaning of “Default Rate”

The English High Court in Lehman Brothers International (Europe) (In Administration) [2016] EWHC 2417 (Ch), in one of a series of cases arising from the Lehman insolvency, has had to consider (among other issues) the meaning...more

New York Rejects Antitrust Defense To Breach Of Distribution Contract

Your client is sued for failure to pay on a contract and says it shouldn’t have to pay because the prices were fixed by a cartel or that it was strong-armed into paying for a “bundle” of services or distribution channels even...more

Sandbagging in M&A Transactions: Default Rules in Delaware, New York and California

One of the most confusing legal issues facing foreign buyers of U.S. assets is governing law. Especially for Asia-based clients whose legal system is civil law based and uniform throughout the country, the U.S.’s state...more

Orrick's Financial Industry Week In Review

Financial Industry Developments - The CFPB Publishes Final Rule for Prepaid Accounts - On October 5, 2016, the Consumer Financial Protection Bureau (the "CFPB") finalized comprehensive consumer protections for...more

D&Os – Be Aware of Creditor Exclusion in Your Insurance Coverage

The U.S. Court of Appeals for the Fifth Circuit recently held that a Creditor Exclusion provision in D&O insurance coverage may result in significant limitations on the coverage provided to the D&Os, when the underlying...more

These Loans Can Be Problematical Even When The Borrower Isn’t An Officer or Director

I spent most of last week discussing California Corporations Code Section 315. As a reminder, that statute prohibits a corporation (Section 162) from making a loan of money or property to, or guaranteeing the obligation of,...more

Same Verse, Different Chapter: The Statute of Limitations Saga Continues in Florida

The Second District Court of Appeals joins the Third District in affirming a final judgment of foreclosure in favor of the bank in an action based on a breach date that falls outside the five-year statute of limitations under...more

One test or two? Insolvency events of default after Eurosail (continued)

Facility agreements almost always contain events of default based on a borrower's insolvency. Defining insolvency is therefore key. In an article published in July 2013 we discussed how, following Eurosail, the common law was...more

Appellate Court Notes

Supreme Court Advance Release Opinions: SC19378 - State v. Francis - SC19411 - State v. Wright - Appellate Court Advance Release Opinions: AC35949 - State v. Porter - AC36656 - State v. Gonzalez - AC36971...more

FHA Issues Final Guidelines on PACE Assessments

The U.S. Federal Housing Administration (FHA) issued final guidance in the form of Mortgagee Letter 2016-11 regarding the subordination of Property Assessed Clean Energy (PACE) assessments on Tuesday, July 19, 2016. As...more

Banks reflect on guarantees, rejoice on fees

National Australia Bank Ltd v Rose - On 21 July 2016, the Victorian Court of Appeal confirmed that a guarantee and indemnity provided by an individual was invalid on the basis that NAB had not complied with relevant...more

Deed of Trust Provisions Allowing Lenders/Servicers to Enter, Maintain, and Secure Encumbered Properties May be Unenforceable...

On July 7, 2016, the Supreme Court of the State of Washington issued its opinion in Jordan v. Nationstar Mortgage, LLC, which, prior to foreclosure, may prevent servicers from securing property after a default or, at least,...more

T&E Litigation Newsletter- July 2016 #2

The first two weeks of July have brought us some warm weather and three new decisions worth noting: First, in Bank of America, N.A. v. Commissioner of Revenue, Docket No. SJC-11995 (July 11, 2016), the Supreme Judicial...more

Brexit; Assessing the impact on Middle Eastern issuers accessing the UK and European Capital Markets

Many companies and other entities in the Middle East tap the UK and/or European debt and equity capital markets as part of achieving their corporate funding and broader strategic objectives. Whilst the precise legal and...more

Is Brexit “materially adverse” to you? Perhaps, if it triggers an ‘event of default’ under your agreement(s).

While the impact of the EU referendum decision on outstanding financing transactions is still to be determined, both lenders and borrowers may be wondering if the ramifications of Brexit have or could be considered to...more

Real estate finance transactions and valuation uncertainty – an unhelpful trigger?

The outcome of the EU referendum has put valuers in an unenviable position. The RICS Red Book requires a valuer to identify a situation where a reduced level of certainty should be attached to their valuation (VPGA 9 –...more

Bankruptcy Beat: Default Judgment Is Not Automatic Following Entry Of Default

On May 12, 2016, the Honorable Julie A. Manning issued a decision in an adversary proceeding entitled Law Office of W. Martyn Philpot, Jr., LLC v. Day, which addressed two issues. The first issue was whether the plaintiff was...more

Loan Enforcement and Creditors’ Rights

At times, lenders lose the promissory notes on defaulted loans. Lost notes are problematic because, in order to have standing to foreclose, a lender may be required in many states, including in New York, to possess the...more

Contractual interpretation disputes from the Trustee's perspective: The saga continues

In the first four months of 2016 three more judgments relating to issues of contractual interpretation of provisions contained in documents of securitisation transactions (all three of them for legacy CMBS deals) and...more

Third Circuit: The Repossession of Your Car as Collateral on a Usurious Loan is Not an FDCPA Violation

The U.S. Court of Appeals for the Third Circuit recently held that a repossession company did not violate the Fair Debt Collection Practices Act (“FDCPA”) when it repossessed the defaulting debtor’s car, even though the loan...more

Ninth Circuit Bankruptcy Appellate Panel Holds that an Oversecured Creditor Is Entitled to Default Interest After the Petition...

In Wells Fargo Bank, N.A. v. Beltway One Dev. Grp., LLC (In re Beltway One Dev. Grp., LLC), 547 B.R. 819 (B.A.P. 9th Cir. 2016), the Ninth Circuit Bankruptcy Appellate Panel recently held that an oversecured creditor is...more

Eleventh Circuit Holds that Borrower’s TILA Claims Are Subject to Agreement’s Forum Selection Clause

The Eleventh Circuit Court of Appeals recently held that a borrower’s Truth-in-Lending-Act (“TILA”) claim fell within the scope of a loan agreement’s forum selection clause. Stiles v. Bankers Healthcare Grp., Inc., ___ Fed....more

Risks of Withdrawing a Case: Reciprocity of Attorneys’ Fees in Connecticut Consumer Contract Default Actions

Lenders beware! If you have brought an action to seek recovery of a defaulted consumer loan whether it be foreclosure or a breach of contract action, Connecticut has a statutory scheme which provides that the debtor, if it...more

The Class X Factor: It’s a NO from the Chancellor

It’s not been a good month for Class X Noteholders. Following the judgment in the Windermere VII case in which Snowden J found against the Class X Noteholder, the Chancellor of the High Court, Etherton J, in Titan Europe...more

Fourth Circuit Case on Modification of Residential Mortgage

The Fourth Circuit has held that in a case where the rate of interest on a residential mortgage loan had been increased upon default, a Chapter 13 Plan proposing to “cure” default under 11 U.S.C. §1322(b) is an impermissible...more

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