News & Analysis as of

Lenders Debt

Explanation of J. Crew “back-door” provision and proposal for how lenders might address this in their documentation.

by King & Spalding on

Recently, J. Crew used a “back-door” provision in its credit facility to transfer approximately $250 million worth of intellectual property (“IP”) to an unrestricted subsidiary with the aim of borrowing against the...more

Southern District of New York holds that intercreditor agreement allows for payment of subordinated lender’s post-petition...

by King & Spalding on

On January 27, 2017, the United States District Court for the Southern District of New York ruled that the subordinated creditor was entitled to payment of post-petition interest prior to repayment of the senior lender’s...more

Third Circuit Rules in Favor of Noteholders on Make-Whole Provision in Debt Indenture

by Cozen O'Connor on

Debt indentures often contain what is known as a “make-whole” provision, which requires the borrower, upon an early repayment of the debt, to make an additional payment to the lender to compensate the lender for its...more

Le nuove garanzie introdotte dal Decreto Legge n. 59 del 2016, il Pegno Non Possessorio ed il Patto Marciano

On May 3, 2016, the Official Gazette no. 102 was published the decree Law n. 59/16, launched by the government on April 29 (the "Decree") containing, inter alia, a series of measures to speed up the recovery of receivables....more

The IRS Is Looking to Recharacterize Related Party Debt as Equity Simply for Failing to Meet on a Timely Basis New Contemporaneous...

by Charles (Chuck) Rubin on

In the early 1980's, the IRS issued regulations on the question of when loans to corporations would be recharacterized under Code Section 385 as equity. The conversion of purported debt can have significant adverse income tax...more

Dodd-Frank News: November 2015: Dodd-Frank Wall Street Reform and Consumer Protection Act Update

by Burr & Forman on

The Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted as a measure to promote financial stability and protection for consumers through increased regulation of nearly every aspect of the consumer finance...more

CFPB Issues Statement Following Reports of Widespread Student Loan Servicing Failures

by Carlton Fields on

The Consumer Financial Protection Bureau (CFPB) recently focused its attention on the student loan industry following alleged widespread servicing failures reported by borrowers and found by the CFPB's examinations and...more

Agency CMBS – the perfect pill for a large loan CMBS pricing headache!

by Reed Smith on

The recent below par pricing of two Goldman Sachs arranged CMBS deals demonstrate the potential perils of CMBS as a distribution tool for CRE debt. Indeed, these two deals bring into stark focus the pricing quandary that...more

Sixth Circuit Weighs in on TCPA “Prior Express Consent”

by Burr & Forman on

The U.S. Court of Appeals for the Sixth Circuit recently addressed both the timing and scope of “prior express consent” under the Telephone Consumer Protection Act (“TCPA”). The plaintiff in Stephen M. Hill v. Homeward...more

Finally, a SOL Decision Focused On Unjust Enrichment and Inequitable Results

This week, the First District Court of Appeals joined the Fourth District Court of Appeals in holding that Florida’s five-year statute of limitation (SOL), under Fla. Stat. § 95.11(2)(c), did not bar the lender’s second...more

Increased Risk for Buyers of Credit Card Loans

by Davis Wright Tremaine LLP on

Third party debt buyers may face increased threat of state-law class action lawsuits after a recent Second Circuit ruling prohibiting such debt buyers from invoking federal preemption defenses under the National Bank Act to...more

Settling Down or Ramping Up? Intercreditor Dynamics on Unitranche Transactions

by Dentons on

With sub-investment grade borrowers increasingly drawn to the higher leverage, more flexible terms and speed of execution offered by the Unitranche solution, its continued popularity in the mid-market shows no sign of...more

NY Attorney General Settles Action against Law Firm Collecting on Payday Loans

by Ballard Spahr LLP on

The New York Attorney General recently announced a settlement with Forster & Garbus, a large debt collection law firm that had filed collection actions against consumers arising out of payday loans. Specifically, Attorney...more

Creditors: Delete a discharged debt from a credit report or face possible liability

by Thompson Coburn LLP on

A typical lender is often managing tens of thousands of accounts of all different types and in various states of financial health. So what happens when a lender, for whatever reason, fails to update credit reporting agencies...more

Lender Beware: Ensure Plan Releases are Limited to Debtor’s Obligations

A creditor who settles with a debtor during a bankruptcy case must be sure to continue following the case during the plan stage, or risk the plan affecting the creditor’s rights against third parties. Iberiabank learned that...more

Borrowers Can Avoid Liability Even After a Trustee’s Sale

by Snell & Wilmer on

Since a lender must have a valid debt and valid lien to conduct a trustee’s sale, a borrower that allows the foreclosure sale to occur impliedly agrees that the debt and lien are valid. In Madison v. Groseth and BT Capital,...more

Are Distressed Loan Fund Investors “Financial Institutions” And Why Does It Matter?

Once again, those of us in the commercial finance world are reminded of the age-old adage caveat emptor. This time the warning is directed at hedge funds and other investors with a penchant for purchasing distressed debt from...more

District Court Denies Distressed Funds the Right to Vote on Bankruptcy Plan

The US District Court for the Western District of Washington (the "District Court") recently affirmed a bankruptcy court decision that prohibited a transferee of a secured lender's interest in a loan from voting on a debtor's...more

A Primer On UCC Article 9 Sales

by Hodgson Russ LLP on

Article 9 of the Uniform Commercial Code sets forth a statutory scheme for both creating and enforcing security interests in personal property. Pursuant to Article 9, a lender seeking to collateralize an advance on the...more

Revised LMA Standard Terms And Conditions For Par And Distressed Trade Transactions (Bank Debt/Claims) – ‘The Plainer English...

Background - The Loan Market Association (“LMA”) recently produced a revised version of the LMA Standard Terms and Conditions for Par and Distressed Trade Transactions (Bank Debt/Claims) (the “Revised Terms and...more

Tips For Collecting What You Are Owed

by Jaburg Wilk on

1. Make sure you have what you need from the start - Take advantage of all information needed to collect at the time the loan is made / the services are provided etc. The borrower or customer wants/needs your money/services...more

Commentary - General Obligation Debt: The Good, the Bad and the Ugly

Some in the public finance world are arguing that the Detroit bankruptcy and similar situations call into question the efficacy of general obligation debt, thereby undermining the market for and pricing of general obligation...more

Tax Filing By Lender Discharges Borrower From Mortgage Liability

by Charles (Chuck) Rubin on

If a taxpayer who has borrowed money from bank defaults on repayment and does not repay the bank, the taxpayer will have cancellation of indebtedness income to the extent that the amount due the lender exceeds the value of...more

Florida Spendthrift Trust Protection Withstands Constitutional Challenge [Florida]

by Charles (Chuck) Rubin on

Louis Steinmetz signed a personal guaranty of a $350,000 loan made to an LLC. The LLC defaulted on the loan....more

Lenders Beware: Debt Can Now Be Recharacterized as Equity in the Ninth Circuit

by Allen Matkins on

For the last 27 years, bankruptcy courts in the Ninth Circuit consistently held that debt could not be recharacterized as equity unless the movant proved inequitable conduct by the debt holder. On April 30, 2013, the Ninth...more

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