Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Perfecting Lease Payment Streams
In August 2006, the U.S. Bankruptcy Appellate panel of the Ninth Circuit Court of Appeals (the 'panel') decided In re Commercial Money Center, 2006 Bankr. LEXIS 1080, *11 (9th Cir. 2006) ('CMC'). The panel held that payment streams stripped from equipment leases constituted payment intangibles under the Uniform Commercial Code (the 'UCC'). By thus expanding the collateral classification 'payment intangibles' under the UCC, this decision raised significant questions of law related to secured transactions and increased the risk associated with the securitization of lease payment streams.
More specifically, the decision in the CMC case is significant for two reasons: 1) by misconstruing an interest as either chattel paper or a payment intangible, it is now possible for a holder to unassumingly fail to perfect its interest in such chattel paper or payment intangible; and 2) it is now much easier for subsequent purchasers of securitized lease payment streams or of the associated chattel paper, or lenders taking a security interest therein, to fall victim to duplicate fraudulent transactions involving such payment streams or associated chattel paper. Since the prior sale of securitized lease payment streams which are classified as payment intangibles will be perfected automatically (without filing a UCC financing statement or taking possession of the underlying lease documents)there will be no notice to subsequent purchasers or lenders of such prior automatically perfected interests in the same lease payment stream. While attorneys, business professionals, and scholars discuss possible responses to these problems, it is up to legal practitioners to protect their clients in the interim. This article reviews the CMC case and its practical implications, provides an overview of some proposed amendments to the UCC with respect to such problems, and discusses suggestions of how to protect clients in the post-CMC environment.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
Coverage Issues Stemming from Dry Cleaner Contamination Suits
In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.