Archives: Secured Loans

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New York’s Revised UCC – Winds of Change (Part 1 of 2)

New York is the jurisdiction of choice for a majority of international and interstate financial transactions. Thus, lending lawyers and their clients should pay special attention to Chapter 505 of the New York Assembly Session Laws of 2014 (the “Act”), which amends the Uniform Commercial Code of the State of New York (the “NYUCC”). Over … Continue Reading

Questioning the form: Moayedi v. Interstate 35

“Never blindly rely on forms and boilerplate terms – negotiating contracts is much more than just defending forms, even if you’re dealing with a “repeat” transaction“. In my few months as a secondee with Reed Smith’s Houston office, this is some of the best advise I’ve received from the partners with whom I work. The … Continue Reading

Delaware Limited Liability Company Interests as Collateral

This post was also written by Aaron Bourke.  Most secured lenders have experience taking a security interest in limited liability company (“LLC”) interests.  Indeed, such arrangements are so common that lenders can easily fall into the trap of using shorthand (such as “membership interests”) to describe their collateral.  However, depending on the state of formation … Continue Reading

Interest Rate Swaps: What to do When the Loan Agreement Terminates

Here's the story: A lender wants to refinance a loan made by another bank, and the other bank has provided an interest rate swap to the borrower. The problem is that the swap is "out of the money" -- meaning that, in this case, the borrower would owe the bank about $20 million if the swap were terminated today. Termination of the credit facility causes the swap to terminate too, so, unless we can come up with another option, this additional $20 million will be owed on the day the loan is refinanced. What can we do?… Continue Reading

Second Liens Really are Second

With the increase in corporate bankruptcy filings over the past year, there have been some interesting bankruptcy court decisions that affect those of us on the front end in corporate lending. One recent case took up the question of whether a second lien is truly second -- and whether it is safe to expect the terms of your intercreditor agreement to be enforced.… Continue Reading

How to Avoid Lender Liability – Part 1

Back in the 80's and early 90's, there was a flurry of "lender liability" lawsuits, with lenders being sued when they exercised remedies after a default on a loan. By the mid 90's, these lawsuits appeared to have gone the way of the dinosaur -- but now they're back. What can you do to protect yourself against lender liability claims?… Continue Reading