Loan Agreements

News & Analysis as of

Beyond the Headlines Part I: What The New CFPB Report Teaches Us About Arbitration Clauses

The Consumer Financial Protection Bureau released an “Arbitration Study” exceeding 700 pages to Congress this week.  You have likely heard the headlines – most commentators assume that the CFPB will use the study to support...more

Arbitration Denied Despite Related Agreement With Arbitration Provision

A Florida court of appeals affirmed a trial court decision to deny arbitration finding a later signed contract supplanted an earlier contract with an arbitration provision. The Appellant, HHH Motors, LLP, signed a retail...more

Appellate Court Notes

SC19216 - Sikorsky Financial Credit Union, Inc. v. Butts - Finally some clarity in rules pertaining to the award of post-judgment interest. Here the (consumer) loan agreement provided that interest would accrue at 9%...more

German Federal Court Of Justice Decides On Limitation Period For Consumers Reclaiming Administrative Fees In Loan Agreements

In May 2014, the German Federal Court of Justice (the BGH) held that clauses in consumer loan agreements charging a non-recurring “administrative fee” are invalid (see June 2014 Risk Note)....more

The Importance Of Selecting An Available Arbitration Forum

The Eleventh Circuit affirmed a Florida district court’s denial of Cashcall’s motion to compel arbitration, as the forum selected in the parties’ loan agreement was not available. Appellee Abraham Inetianbor initially...more

OFAC Sanctions Compliance Provisions in Various Agreements

Due to costly settlements secured by U.S. regulatory agencies, banks, insurers, and corporations are increasingly inserting rigorous OFAC sanctions compliance language into their credit agreements, insurance policies,...more

Guarantor Waivers Narrowed

A general waiver by a guarantor of “all defenses” does not actually waive “all defenses.” California Bank & Trust v. Del Ponti, — Cal.Rptr.3d —, 2014 WL 6908141 (Cal.App. 4 Dist.). That was the holding in a recent opinion...more

Waiting for the CFPB’s arbitration study

“Waiting for the CFPB’s arbitration study” isn’t the title of a new play but it does describe the study’s status as we enter the final hours of 2014. Since the CFPB sent letters to payday lenders in August 2014...more

Another Bankruptcy Proofing Strategy Bites the Dust, or Does It?

In an effort to minimize the risk of loss in connection with a loan default, lenders often employ creative means to make it difficult, if not impossible, for a borrower to file bankruptcy....more

Ross Holding and Mgmt. Co. v. Advance Realty Group, LLC, C.A. No. 4113-VCN (Del. Ch. Sept. 4, 2014) (Nobel, V.C.)

In this post-trial memorandum opinion, the Court of Chancery evaluated a reorganization under the entire fairness standard, and held that, although plaintiffs received a fair price, the unfair process infected the entire...more

North Carolina Supreme Court Upholds Enforceability of Waiver of ECOA Claim

Last month, the North Carolina Supreme Court issued an important opinion for lenders in this state. The opinion reversed the North Carolina Court of Appeals’ decision in RL REGI N.C., LLC v. Lighthouse Cove, LLC, which found...more

Second Federal Circuit Court Refuses To Enforce Arbitration By South Dakota Tribe

Using a different analysis, but reaching the same result as a recent decision from the Seventh Circuit, the Eleventh Circuit agreed that a defendant could not compel arbitration of consumer claims before the Cheyenne River...more

Eleventh Circuit Refuses To Compel Arbitration In Dispute Between Loan Servicer and Borrower

On October 2, the Eleventh Circuit affirmed a district court’s decision refusing to compel arbitration sought by a servicer in a dispute with a borrower over the terms of a loan agreement. Inetianbor v. Cashcall, Inc. No....more

New Decision on Enforceability of Make Whole Provisions

Another bankruptcy court — this time in New York — has weighed in on the issue of whether “make whole” provisions are enforceable in bankruptcy. See In re MPM Silicones, LLC, et al. (a/k/a Momentive Performance...more

Will the CFPB really complete its arbitration study this year?

We recently learned that earlier this month, the CFPB sent letters to payday lenders demanding copies of certain of their standard loan agreements for use in connection with the CFPB’s arbitration study. The letters are...more

Equity Cure Rights in Loan Agreements

The purpose of each of our client memos is to highlight for the reader developments in the middle-market lending space that we have observed over the course of our practice. While each deal is different, over time certain...more

Mainebiz Real Estate Insider – Lender Liability in Real Estate Closings; Know Your Closer Well

The general phrase “lender liability” usually refers to cases where a lender does not live up to its own loan agreement, or where a loan officer promises more than the loan documents provide, or where the lender sells...more

Delaware Court of Chancery Finds Contract Rate Applies to Post-Judgment Interest

The Delaware Court of Chancery recently held that, in a case alleging breach of a loan agreement for more than $100,000, post-judgment interest accrues at the rate set forth in the agreement and not at the lower statutory...more

Rhode Island Usury: Interest By Any Other Name Is Still Interest

In LaBonte v. New England Development R.I., LLC et al., No 12-328, the Rhode Island Supreme Court recently clarified the state’s usury law by holding that a fee could be included in the calculation of interest even though it...more

U.S. District Court Reaffirms Distressed Debt Funds Not Eligible Assignees under Loan Agreement

A recent decision by the U.S. District Court for the Western District of Washington found that certain distressed debt funds were not “financial institutions” under the definition of “Eligible Assignee” in the applicable loan...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

California District Court Compels Arbitration of TCPA Claim

The Eastern District of California recently compelled arbitration of a TCPA claim based on the broad language of the plaintiff’s arbitration agreement. See Delgado v. Progress Financial Company, No. 14-0033, 2014 WL 1756282...more

Strategic Tips for Approaching Lenders and How to Choose the Right One

For those small businesses that are looking to obtain debt financing or to refinance existing debt, there are some strategic planning tips to consider in approaching and selecting a potential lender. ...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

Are Loan Agreements Debentures?

In a recent case the Court of Appeal has answered “yes” to the question of whether loan agreements are debentures. Reversing the decision of the judge at first instance, the Court concluded that the literal words of the...more

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