Promissory Notes

News & Analysis as of

Convertible Debt Term Sheets – What Companies Need to Know

Convertible debt is a type of financing companies frequently seek as a prelude to their first significant preferred equity financing, or as a bridge round between equity financings. A convertible debt round will typically...more

Foreclosure of Mortgage Securing Electronic Promissory Note Affirmed

Florida’s Fourth District Court of Appeal recently issued its mandate in Rivera v. Wells Fargo Bank, N.A. confirming the finality of its decision to uphold the enforcement of an electronic promissory note (“e-note”) in a...more

Has Your Promissory Note Been Outlawed?

The modern understanding of the term “outlaw” is someone who has broken the law and has not been captured and brought to justice. There is, however, another sense of the term. A note is said to be “outlawed” when the...more

NJ Tax Court Denies Interest Addback Exception - Does Your Company Still Qualify?

In a decision published April 26, 2016, the New Jersey Tax Court in Kraft Foods Global Inc. v. Director, Div. of Taxation ruled that a taxpayer couldn’t deduct interest paid to its corporate parent. The taxpayer’s...more

NC Business Court Refuses To Enjoin Similar British Lawsuit

It's possible to get an NC state court to enjoin a party from pursuing parallel litigation in another American state. But what about enjoining a party before an NC court from pursuing a parallel case in another country?...more

The Fourth DCA Issues Florida’s First District Court Opinion Specifically Ruling that Promissory Notes are Negotiable Instruments

The Fourth District Court of Appeal recently held that a promissory note is a negotiable instrument even though it references provisions in the mortgage. Onewest Bank, FSB v. Jose Nunez, Case No. 4D13-48176, 2016 WL 803542...more

Commentary on Elsman: Copy of Note Attached to Complaint May Evidence Standing to Foreclose

With its recently-issued opinion in Elsman v. HSBC Bank USA as Trustee for MLMI 2006-AF1, slip op. 5D14-1753, 41 Fla. L. Weekly D57b, 2015 WL 9491875 (Dec. 31, 2015), the Fifth DCA has added to a growing body of case law...more

Florida’s Fourth DCA Provides Clarity on Proofs Required to Enforce Promissory Note Specially Indorsed to Another

In Bank of New York Mellon Trust Company v. Dennis M. Conley, 4D14-2430 (Fla. 4th DCA Jan. 6, 2016), Florida’s Fourth District Court of Appeal clarified the methods by which a foreclosure plaintiff can seek to enforce a note...more

Security assignments – not always what they say they are?

The nature of security created under a security document does not always match its description in the document. Charlotte Drake explains how this recharacterisation risk can apply to security assignments. ...more

Appellate Court Notes

Appellate Court Advance Release Opinions: AC36382, AC36387 - Hilton v. Commissioner of Correction - AC36922 - Nationwide Mutual Ins. Co. v. Pasiak - This was Round Three of a case previously reported on. An...more

Litigation Alert: Washington Supreme Court Clears Up Ambiguity on "Holder" versus "Owner" of Secured Notes

The Washington Supreme Court, sitting en banc, affirmed in Brown v. Washington State Department of Commerce the Department of Commerce’s denial of a mediation request under the Foreclosure Fairness Act (FFA) made by a...more

Reach of Contractual Jury Trial Waivers Narrowed By Alabama Supreme Court

In Ex Parte Acosta, No. 1140200, — So. 3d —, No. 1140200, 2015 WL 3537476 (Ala. June 5, 2015), the Alabama Supreme Court refused to incorporate a jury trial waiver from a collateral loan document into a Promissory Note. ...more

California’s Secured Promissory Note Exemption

The line between real property transactions and securities transactions is not always clear.  California Corporations Code Section 25100(p) provides an exemption for a promissory note secured by a lien on real property...more

There’s Nothing Magic About the “Original” Promissory Note

In a victory for creditors, the Alabama Court of Civil Appeals recently reversed a trial judge’s decision to exclude a copy of a promissory note from evidence simply because it was not an original. Without the promissory...more

Equitable Liens: No Mortgage Does Not Necessarily Mean No Lien

Marcum v. Marcum (In re Marcum), 508 B.R. 499 (Bankr. M.D. Fla. 2014) – A creditor made two prepetition loans to a chapter 13 debtor for payment of delinquent real estate taxes. The loans were supposed to be secured by...more

Foreclosure Plaintiffs Cannot Rely Solely on Their Status as Parent Corporation

The ownership of the promissory note by a subsidiary corporation of the Plaintiff cannot alone establish standing to foreclose. In HSBC Bank USA, N.A. v. Ryan Kahan, et al., the Court granted the borrowers’ motion for...more

Domestic Partnership Agreements: Financial Disclosures and Privacy

To reduce risk of later attack on the domestic partnership agreement, domestic partners should make fair and reasonable financial disclosures to each other prior to signing the agreement. Each partner should disclose to the...more

Florida Appellate Court Provides Guidance on Proof Required to Enforce Lost Negotiable Instruments

As Florida works through its foreclosure backlog, many of the cases remaining are those with complications, for example a lost promissory note. Such issues are not insurmountable, but do require an attention to detail. For...more

SEC, FINRA, DC Sanction Success Trade

A recurrent theme in today’s enforcement environment is parallel and often overlapping proceedings. That is the case with a District of Columbia based broker that drew sanctions from the SEC, FINRA and DC. In the Matter of...more

Florida Court of Appeals Reverses Foreclosure of Reverse Mortgage by Expanding the Definition of “Borrower” to Include Surviving...

Home equity conversion mortgages, commonly known as “reverse mortgages” are popular loan products in Florida. In order to foreclose on a reverse mortgage, the lender generally must allege that all conditions necessary to...more

SEC Fines Adviser $20 Million Based on Conflicts

Failure to disclose conflicts of interest and/or to comply with firm procedures are the predicates for a series of SEC enforcement actions involving regulated entities. The most recent example of these trends is an action...more

Appellate Court Notes

Appellate Court Advance Release Opinions - AC36506 - Sidorova v. East Lyme Board of Education - Due to budget cuts, the Board of Education laid off the plaintiff who was a tenured French teacher. She sued for...more

New York Appellate Court Confers Standing on Assignee of Note Previously Discharged in Bankruptcy

A mortgage lender has standing to foreclose even when it obtains assignment of the underlying promissory note after the note has been discharged in bankruptcy, a New York appellate court has ruled. The case arose after the...more

Real Property, Financial Services & Title Insurance Update: Weeks Ending July 10, 17 & 24, 2015

REAL PROPERTY UPDATE - Eviction/Summary Judgment: Error to grant summary judgment where plaintiff failed to refute multiple affirmative defenses including an assertion that the eviction would cause an inequitable...more

Liberalization of Louisiana Foreclosure Law: Cat on a Hot Tin Roof

Legislation liberalizing Louisiana foreclosure law was signed by Louisiana’s governor on June 5. House Bill 697 becomes effective on August 1, 2015. One particular area where lenders strive to use technology involves...more

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