Is It a True Lease or a Loan?
The first part of this article, published in last month's issue, addressed the importance of the distinction between true leases and loans and began a detailed analysis of the rules that courts use for state law and bankruptcy purposes to determine the category in which a given transaction belongs. <br>As outlined in part one of this article, courts utilize the Two-Part Test provided in §1-201(37) of the Uniform Commercial Code, and any transaction that satisfies that Two-Part Test creates a security interest as a matter of law. The first prong of the test is satisfied if the lessee does not have the option of terminating the lease early or if any such early termination option requires the lessee to pay the lessor a significant sum. The second prong, which addresses the issues that are most often litigated, is discussed below.
On-Site Sales: What Lessor's Counsel Should Know
When equipment lessors evaluate the risks of underwriting lease transactions for manufacturing equipment, one of the primary considerations in the credit decision is the resale value of the equipment in the event of default. In preparing for this risk, a key component of an underwriter's evaluation must be how to access and market the equipment in the event of a default. Therefore, it is critical to look at every transaction from the perspective of how much money a piece of equipment will bring in a sale, if there is an established market for the particular equipment, and also, how and where the equipment can best be marketed and sold if a liquidation is necessary. An often-overlooked and significant factor in this analysis is whether the lessor will have unfettered access to remove the equipment to sell, refurbish, and/or prepare for liquidation at the location where it has been used.
FTC Addresses Earnings Claims in Internet Advertising
As franchisors find new ways to reach out to prospective franchisees, there are inevitably questions about how franchise laws ' written long before electronic media such as the Internet and e-mail were contemplated ' might apply. Recently, the Federal Trade Commission's (FTC) staff provided some guidance to help franchisors understand how the FTC Franchise Rule applies with respect to earnings claims made in the context of Internet advertising.
Heard it in the Halls: Highlights of IFA's Legal Symposium
Last month's International Franchise Association (IFA) Legal Symposium brought together many of the world's leading franchise attorneys and in-house counsel for large franchisors. The items below are brief accounts of some of the presentations and discussions.
News Briefs
Highlights of the latest franchising news from around the country.
Court Watch
Highlights of the latest franchising cases from around the country.
Peddlers or Partners?
Much as in the courtroom, service providers and clients often find themselves struggling with an adversarial dynamic, which, of course, is counter-productive to both partners and their mutual interests, and entirely avoidable.
Pearls For Practitioners
The Sedona Conference, a nonprofit organization dedicated to facilitating reasoned and just development of law and policy in several emerging areas, held its sixth annual meeting on Complex Litigation (Complex Litigation VI) March 25 and 26 in the scenic red-rock tourist destination of Sedona, AZ. <br>In response to the ever-increasing demand by lawyers, judges and litigants for guidance related to the duties, opportunities and overall complexities of litigation in the digital world, the conference again focused on electronic discovery. <br>Among myriad issues related to e-evidence discussed were retention and preservation of records.
CT Supreme Court Sets Computer Evidence Standards
In a ruling expected to be to computer technology what <i>State v. Porter</i> is to scientific evidence, the Connecticut Supreme Court in early May decided what foundation is needed for computer-generated evidence to be presented at trial. <br>As with <i>Porter</i>, the May 3 decision in <i>State v. Alfred Swinton</i>, which upheld Swinton's murder conviction, is expected to extend far beyond the case that spawned it.
