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C&J Vantage Leasing Co. v. Wolfe: One Year Later
In March 2011, the Iowa Supreme Court sent ripples of concern, if not terror, throughout the equipment lease finance industry with an unprecedented decision refusing to afford finance lease status to a contract between a finance company and a commercial end user, notwithstanding the fact that the parties had expressly agreed to such treatment in their written documents. In C&J Vantage Leasing Co. v. Wolfe, 795 N.W.2d 65 (Iowa Mar. 4, 2011), the court reasoned that “a transaction must first qualify as a lease before it can qualify as a finance lease.” The court found that because the contract at issue permitted the end user to purchase the financed equipment for $1 at the end of the lease term (in essence, any capital lease), the transaction was in fact a sale with a security interest rather than a lease. The court specifically refused to give effect to the parties' expressed intent, as stated in the contract provision that: “[t]his agreement is, and is intended, to be a Lease.”
The Iowa court's holding on this point caused justifiable concern in the equipment leasing community. Indeed, entire seminars have been devoted to discussing the C&J Vantage case and its possible ramifications. One particular concern was that the case might be invoked by defaulting lessees in other jurisdictions as a springboard for attacking finance lease treatment of written leases on the basis that one or more of the requirements set forth in Article 2A of the Uniform Commercial Code (“UCC”) were not met. Such argument could be raised not only in the context of “dollar out” leases, but in other factual scenarios, such as where it is alleged that the lessor did not actually receive the leased goods despite executing a Delivery and Acceptance certificate, or where some other technical requirement of UCC ' 2A-103(a)(3) was not met. Plainly, such a result could defeat a finance company's justified expectation that its agreements will be treated as a finance lease as provided in the written contract language.
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.
Supreme Court Rules Rejection of Trademark License Does Not Rescind Rights of Licensee
Mission Product Holdings, Inc. v. Tempnology, LLC The question is whether a debtor's rejection of its agreement granting a license "terminates rights of the licensee that would survive the licensor's breach under applicable nonbankruptcy law."