Bankruptcy Court Decides When Trade Vendor Priority Claims Get Paid
March 27, 2007
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania recently issued one of the first decisions in the Third U.S. Circuit Court of Appeals to interpret '503(b)(9), an important new Bankruptcy Code provision passed under the Bankruptcy Abuse Prevention and Consumer Protection Act: <i>In re Bookbinders' Restaurant Inc.</i> '503(b)(9) is certain to impact the relationship between a debtor seeking to reorganize and the trade vendors that deal with it.
Information Security Obligations
March 27, 2007
This article outlines the requirements for providing notification of a security breach under state security breach notification laws by any company and the factors that a public company needs to take into account regarding whether to disclose a security breach under federal securities law.
Illegal Use of Equipment
March 27, 2007
A Florida intermediate-level appellate court has held that a lessee is not relieved of its payment obligations when it discovers that it cannot lawfully utilize the leased equipment in the manner it intended. <i>De Lage Landen Financial Services, Inc. v Cricket's Termite Control, Inc.</i> While the writer is aware of similar results reached in other unreported Florida actions, this decision, the first reported decision in Florida, not only will provide assistance in dealing with similar scenarios but also exhibits the strength of standard lease clauses.
Vicarious Liability of Aircraft Owners and Lessors: A Chink in the Armor?
March 27, 2007
In 2005, the Superior Court of Rhode Island held that '44112 of Title 49 of the U.S. Code did not protect the owner and lessor of an aircraft from vicarious liability for negligence of a lessee of the aircraft. <i>Coleman v. Windham Aviation Inc.</i> In light of the decision in Windham (and others discussed below), owners, lessors, of aircraft must be aware of the possibility that a state court may very well impose vicarious liability.
In the Marketplace
February 27, 2007
Highlights of the latest equipment leasing news from around the country.
What Leasing Counsel Need to Know About Arbitration
February 27, 2007
Part One of this series analyzed the consideration that leasing counsel should give to discovery, locale selection, confidentiality, and expediting the arbitration process. This month's installment discusses issues relating to arbitrator-selection.
Information Security Obligations
February 27, 2007
One of the most pressing issues faced by any business, but especially those in the financial services industry, is the privacy and security of financial and other nonpublic information. This is the first in a series of three articles addressing some of the key issues surrounding corporate responsibility with respect to the privacy of information and security breaches. Whether public or private, small company or large, if you or your client are in possession of the personal information described below, the following series of articles is essential reading.
Financing Payment Obligations for Services: Are 'Hell or High Water' and 'Waiver of Defenses' Clauses Enforceable in Contracts for Future Services?
February 27, 2007
The primordial cornerstone of financing equipment lease receivables has been the ability of funding sources to rely on the enforceability of two related provisions contained in the underlying lease documentation:1) 'Hell or high water' clauses, where the lessee agrees that its payment obligations under the lease are 'absolute and unconditional' and are not subject to any defense, setoff, or counterclaim that the lessee may have against the lessor, its assignee, the manufacturer or seller of the equipment, or against any person for any reason whatsoever — essentially, it agrees to pay 'come hell or high water.'2) 'Waiver of defense' clauses, where the lessee 'agrees not to assert against an assignee' of the lease payments, any defenses, setoffs, or claims it may have against the lessor, as the original payee under the lease.
