At the bottom of the stack in investment fund structures, there are generally “real” assets—things like equity interests in portfolio companies, mortgage loans, commercial receivables, maybe even bricks and mortar. Fund...more
One of the most important aspects in arranging any fund finance transaction is structuring the security package. As anyone that has ever looked at a complete structure chart for a fund financing transaction knows, even a...more
The fact that commercial transactions can very easily become complex is not a novel statement. When financial institutions lend money to commercial entities, the basic documentation required to evidence the loan, promise to...more
Beginning July 1, 2023, many states began accepting revised Uniform Commercial Code (UCC) forms to perfect security interests. These revised forms were adopted earlier this year by the International Association of Commercial...more
Can human reproductive tissue (“HRT”) held by a fertility clinic serve as collateral for a loan to (or investment in) the fertility clinic? In short, the scope and extent of governmental regulation addressing the sale of or...more
It seems that every few years, we experience an unprecedented event that significantly affects the world. From a once-in-a-generation recession to a once-in-a-century pandemic, trade creditors and inventory lenders constantly...more
When a loan becomes distressed, it is essential for the secured lender to conduct a file review to determine if there are any deficiencies that need to be addressed. If deficiencies are not addressed, the lender’s collateral...more
Borrowers should not be surprised when their lender requests a “checkup,” financial review, or audit. Lenders are nervous. Despite long-term institutional relationships with customers, many banks are seeking to reduce...more
In a previous blogpost, we explained the technical requirements for financing statements and the potential risks of failing to satisfy them, highlighting a case where the court ruled, under a prior version of the Puerto Rico...more
Dealing with a financially distressed customer requires both vigilance and creativity. Vigilance is critical because closely monitoring a customer’s payment history and overall financial situation will signal whether a...more
Last year, the U.S. Bankruptcy Court for the Central District of Illinois determined in In re I80 Equipment, LLC that a financing statement which referenced a description of the collateral, but did not contain or attach the...more
Lenders often finance items that are installed in and/or affixed to their customers’ other leased or financed assets. When these items, known as “accessions,” are part of the transaction, they are usually “perfected” by the...more
Recently, two federal courts issued decisions defining the detail needed in collateral descriptions in financing statements. This is significant because if the collateral description is not sufficient then the financing...more
Manufacturers encounter financing statements in many contexts – as a borrower, as a supplier of goods sold on credit, as a seller in a leveraged acquisition, as a seller of equipment where financing is provided to the buyer...more
On August 20, the U.S. Bankruptcy Court for the Central District of Illinois in In re I80 Equipment, LLC, No.17-81749, 2018 WL 4006294 (Bankr. C.D. Ill. Aug. 20, 2018) held that a secured party failed to perfect its security...more
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
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
Ring v. First Niagara Bank, N.A. (In re Sterling United, Inc.), 519 B.R. 586 (Bankr. W.D.N.Y. 2014) – A chapter 7 trustee sought to recover as preferences payments made by the debtor to a lender and proceeds of...more