What began as an outlet for companies with riskier credit to raise debt, the private credit asset class has morphed into a viable alternative lending source for middle-market and, increasingly, large-cap companies. Private...more
In its highly anticipated decision, the Second Circuit has answered the question of whether a syndicated term loan qualifies as a “security” with a definitive “no”. On August 24, the Court of Appeals for the Second Circuit...more
The U.S. Bankruptcy Court for the Southern District of Florida created a three-factor test to help determine the ownership interests of social media accounts. The court in In re Vital Pharm found that (1) documented property...more
In March , the Court of Appeals for the Second Circuit requested that the Securities and Exchange Commission (SEC) submit a brief on whether a syndicated term loan qualifies as a “security.” The brief was highly anticipated...more
In Worthy Lending LLC v. New Style Contractors. Inc., New York’s highest court, the New York Court of Appeals, has ruled that a security interest includes a lender’s right to force the borrower’s account debtors to remit...more
The U. S. Court of Appeals for the Second Circuit heard oral arguments on March 9 in Kirschner. A reversal of the lower court’s holding — that syndicated loans as an asset class are not securities for purposes of securities...more
In Worthy Lending LLC v. New Style Contractors. Inc., the New York Court of Appeals held that a security interest includes a lender’s right to force the borrower’s account debtors to remit payments directly to the lender,...more
A 2020 case that held that syndicated loans as an asset class are not securities for purposes of the securities laws is making a return to the spotlight as an appeal threatens to upend the decision....more
On April 28, the U.S. Bankruptcy Court for the Northern District of Oklahoma in Kirtley v. Mabrey Bank (In re: Rudick) held that an entity other than the debtor may grant a lien on the debtor’s property, affirming the legal...more
The best-structured loan covenants in credit facilities are flexible enough to allow a borrower to grow, while reducing the lender’s risk of loss. However, many models and projections underlying those covenants are at risk of...more
On Dec. 31, 2021, the New York Department of Financial Services announced that commercial finance providers doing business in New York state will receive additional time to comply with the New York state Commercial Finance...more
On April 28, the U.S. Bankruptcy Court for the N.D. of Oklahoma in Kirtley v. Mabrey Bank (In re Rudick) held that an entity other than the debtor may grant a lien on the debtor’s property, affirming the legal standard that...more
On December 31, 2021, the New York Department of Financial Services (Department) announced that commercial finance providers doing business in New York state will receive additional time to comply with the New York State...more
In In re Karcredit LLC , the U.S. Bankruptcy Court for the Western District of Louisiana was faced with two lenders with claims to one original stock certificate as collateral. On June 1, the court held that the corporation...more
The Uniform Commercial Code was established to provide predictability and conformity in commercial transactions. Certain states have adopted nonstandard UCC provisions, which create an unreliable and unpredictable market for...more
In what may be the first step in a move away from the Secured Overnight Financing Rate (SOFR) as the replacement rate for LIBOR, the Loan Syndications & Trading Association (LSTA) issued a market advisory memo titled,...more
When is a loan not a loan? The SDNY Bankruptcy Court in In Re: Live Primary, LLC held that a $6 million start-up loan was actually an equity contribution after analyzing the terms of the transaction and the intent of the...more
On June 23, the New York County Supreme Court issued a rare preliminary injunction temporarily halting a mezzanine lender’s UCC foreclosure sale of the Mark Hotel in New York City because the procedures for the foreclosure...more
7/9/2020
/ Borrowers ,
Commercial Property Owners ,
Coronavirus/COVID-19 ,
Executive Orders ,
Foreclosure ,
Foreclosure Sales ,
Governor Cuomo ,
Irreparable Harm ,
Lenders ,
Mezzanine Lenders ,
Moratorium ,
Preliminary Injunctions ,
Uniform Commercial Code (UCC)
On June 15, the Federal Reserve Board released proposed term sheets to expand the Main Street Lending Program to nonprofit entities in sound financial condition before the onset of the COVID-19 pandemic. The announcement...more
As the coronavirus pandemic upends the economy, the financial health of the leveraged loan market has been impacted. The long-term effect of the pandemic on the leveraged loan market will depend on inherent market risks, the...more
In a very short period of time, private equity groups and their portfolio companies have had to deal with an unprecedented amount of change in response to the novel coronavirus (COVID-19) crisis....more
The Board of Governors of the Federal Reserve System (FRB) and certain other federal agencies issued an interagency statement on loan modifications and past-due loan policies in the wake of the economic disruption caused by...more
Lenders should view as cautionary tales two recently handed down decisions regarding UCC-1 financing statements and the perfection of security interests. On December 20, 2019, the U.S. Bankruptcy Court for the District of...more
2/24/2020
/ Chapter 12 ,
Commercial Bankruptcy ,
Debtors ,
Due Diligence ,
Lenders ,
Perfected Security Interest ,
Retail Installment Sales Contracts ,
Security Agreements ,
UCC Financing Statements ,
Uniform Commercial Code (UCC) ,
Unsecured Debt
On September 19, the Securities and Exchange Commission’s Investor Advisory Committee held a hearing to discuss the risks of increased leverage in the loan market and the potential impact leveraged loans and collateralized...more
10/29/2019
/ Arbitrage ,
Capital Requirements ,
Collateralized Loan Obligations ,
Covenant Lite Deals ,
Disclosure Requirements ,
EBITDA ,
Financial Markets ,
Information Sharing ,
Leveraged Loans ,
Loans ,
Rating Agencies ,
Regulatory Requirements ,
Securities and Exchange Commission (SEC) ,
Securities Regulation
Tax relief may be coming for issuers and holders of debt instruments and parties to derivatives and other financial contracts governed by LIBOR (the London Interbank Offered Rate). ...more
10/14/2019
/ Consumer Financial Contracts ,
Debt Instruments ,
FASB ,
Financial Instruments ,
Financial Regulatory Reform ,
IRS ,
Libor ,
Market Participants ,
Proposed Regulation ,
Rulemaking Process ,
Safe Harbors ,
Tax Planning ,
Tax Relief