News & Analysis as of

Loan Agreements

New York Appellate Court Upholds Plain Meaning of Reserve Provision in CMBS Loan Agreement

by Alston & Bird on

On October 24, 2017, a New York appeals court unanimously affirmed dismissal of a CMBS borrower’s lawsuit concerning the interpretation of a reserve provision in a commercial loan agreement. The dispute concerned the...more

Are You Being Served? Better Follow the Hague Convention

by Faegre Baker Daniels on

Serving judicial and extrajudicial documents abroad involves a complex patchwork of domestic legislation and international treaties. The recent High Court judgment in Marashen Limited v Kenvett Limited and Dmitry Ivanchenko...more

The Practical Effects of LIBOR’s Phase Out

Trillions of dollars’ worth of financial documents use the London Interbank Offered Rate, or LIBOR, to set the interest rate of a transaction. The ICE Benchmark Administration currently maintains a reference for LIBOR by...more

FCA Announces Discontinuation of LIBOR

by Hogan Lovells on

As you may know, on July 27, 2017 the UK's Financial Conduct Authority (FCA) chief executive Andrew Bailey announced that market participants should not rely on the London Interbank Offered Rate (LIBOR) being available after...more

SEC Staff Extends Effectiveness of No-Action Relief on Auditor Independence and the “Loan Provision”

by Dechert LLP on

The U.S. Securities and Exchange Commission’s Division of Investment Management (SEC Staff) on September 22, 2017 extended indefinitely the effectiveness of no-action relief granted a year earlier with respect to the...more

Finding the Unicorn in Lender Liability Litigation

by Bryan Cave on

Investors frequently talk in terms of trying to find the next unicorn, that small start-up company that is going to turn into a billion dollar valuation. Lawyers are like that as well, always looking for that new decision...more

Lights Out for LIBOR by 2021

by Ropes & Gray LLP on

Questions regarding the sustainability and desirability of the London Interbank Offered Rate (LIBOR) have prompted the UK Financial Conduct Authority (FCA) to urge the phasing out of LIBOR and a transition to alternative...more

New Case Law on Upfront Fees in German Loan Agreements

by Shearman & Sterling LLP on

On 4 July 2017, the German Federal Court of Justice (BGH)—in two separate cases—held that pre-formulated agreements on work fees that are payable independent from the term of the underlying loan and agreed between a financial...more

Loans to U.S. Subsidiaries Should Be Carefully Structured and Documented to Obtain U.S. Tax Benefits

by Dorsey & Whitney LLP on

Canadian companies should carefully structure and document loans and advances to their U.S. subsidiaries. If loans to U.S. subsidiaries are not properly structured and documented, such loans may be recharacterized as equity...more

Arrangement Fee Clauses in German Loan Agreements ruled invalid by German Federal Court

by Dechert LLP on

The German Federal Court issued a series of groundbreaking rulings on July 4, 2017. Arrangement fee clauses in German law loan agreements are invalid if they are included in general terms and conditions set by the lender....more

The End of Days (Or At Least LIBOR)

by Dechert LLP on

You know, sometimes life’s problems smack you against the side of the head like a 2×4, and sometimes it’s just a multiplicity of middling offenses that become so annoying that you might just want to roll over and die. Think...more

Third Circuit Holds That Statutes Of Limitation May Be Tolled By Books-And-Records Demands Under Delaware Law Despite Inquiry...

by Shearman & Sterling LLP on

On June 13, 2017, Chief Judge Smith of the United States Court of Appeals for the Third Circuit reversed in part the District Court’s dismissal of claims for breach of contract as untimely. Norman v. Elkin, No. 16-1924 (3d...more

CalPERS And Securities Lending – Waiting For Godot?

by Allen Matkins on

California Government Code Section 7603 is short and unambiguous - All loans of securities shall be made pursuant to one of the standardized security loan agreement forms, as developed by the administrators of the State...more

Recovery of interest swap break costs on early redemption of loan

by Allen & Overy LLP on

Could the bank recover under an indemnity in a loan agreement for the costs of unwinding a related interest rate swap when the loan was redeemed early by the borrower? In earlier proceedings, Warren J had ruled that the bank...more

When is a Working Capital Agreement a Loan? It Depends on Your Claim

Suppose you’ve entered into a financial arrangement that resembles a lending agreement, but it is not formally designated as such, and you think you’re paying too much....more

A five minute roundup of upcoming cases and anticipated regulatory developments of interest to the Financial Services sector

by DLA Piper on

Welcome to the fourth edition of our On the Financial Services Horizon newsletter – a regular update on upcoming cases and anticipated regulatory developments affecting the Financial Services sector....more

Before You Comment on My Haircut, Think Again

by Bryan Cave on

Back in 2008 and 2009 Eddie Liles lent around $102,000 to his brother Dallas to purchase rental properties at 554 South Shore Drive and 540 South Shore Drive in Greenup County, Kentucky, as well as a 2008 Ford 4×4 truck. The...more

Equity Kickers and the Criminal Rate of Interest

by Bennett Jones LLP on

Entering into a loan transaction that also has an equity component, such as the issuance of shares or warrants, has previously given rise to some concern that the loan could ultimately run afoul of the 60 percent criminal...more

Two Commercial Division Rulings Put Payday Further Out of Reach for Russian Businessman

Justice Anil Singh of the New York Commercial Division recently issued two decisions related to the long-running litigation between Russian businessmen Alexander Gliklad and Michael Cherney. ...more

Stored Materials: Finding Common Ground between Borrower and Lender

Stored materials present a potentially serious point of tension between lenders and borrowers in the negotiation of a construction loan agreement. In construction lending, the term “stored materials” refers to the materials...more

Group proceedings settlement update: Court of Appeal upholds binding nature of settlement on group members

by DLA Piper on

In Pekell, the Court of Appeal has provided welcome clarity around the effect of settlements in group proceedings, which should provide comfort to group proceeding defendants and their insurers. Importantly, the case affirms...more

Is your Motor Vehicle Loan Safe?

by Nexsen Pruet, PLLC on

Insurance policies may not protect the credit union's lien - Today’s insurance world is a complicated scene. Insureds have more choice than ever for insurance coverage. If a federal credit union has a lien on a motor...more

Forum on China Africa Cooperation

by Dentons on

The Forum on China-Africa Cooperation (FOCAC) is an official forum between the People’s Republic of China and the states in Africa. FOCAC holds a Ministerial conference every three years and holds a Summit every nine years....more

No implied term releasing an employee from their obligation to repay a loan in a voluntary redundancy situation

by Dentons on

In the recent case of Ali v. Petroleum Company of Trinidad and Tobago the Privy Council found that there was no implied term waiving an employee's obligation to repay a loan to their employer in a voluntary redundancy...more

Chris Lazarini Comments on Covenant of Good Faith and Fair Dealing

by Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini commented on a case in which the plaintiff claimed Merrill Lynch acted improperly in selling shares held as collateral for a loan when plaintiff had not defaulted on the loan. The...more

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