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Is Your (Non-True) Lease a Sale?
Just in case the transaction you've just documented using your standard lease forms is not a 'lease,' you've included a granting clause in the form and filed UCC 'notice' filings. So, you've protected the lessor from a re-characterization
risk (i.e., that the transaction is deemed not to create a 'lease' under commercial law) ' right? Well, maybe not.
A recent decision by the Federal District Court for the Western District of Wisconsin reminds us of the need to draft documents that protect against the possibility that a lease may be re-characterized as a 'sale' to which Article 2 of the UCC applies. In Key Equipment Finance, Inc. v. Pioneer Transportation, Ltd., 472 F. Supp. 2d 1131 (W.D. Wis. 2007), the court found that a transaction documented as a lease was instead a sale of goods with a reservation of a security interest and that Article 2 applied to the transaction. Although the court ultimately rejected the lessee's Article 2 defenses, it did consider them.
The Key Equipment Finance decision involved a fairly standard three-party equipment financing arrangement. The equipment to be financed was communication equipment supplied by the vendor. The communication equipment was installed on lessee's trucks. To finance the purchase, lessee entered into a Master Lease Agreement and associated equipment schedules with lessor, which purchased the equipment from the vendor for the purpose of leasing it to the lessee. The agreements were drafted as 'leases.' However, the court characterized the transaction as back-to-back 'sales': '[lessor] acquired the T-Fleet Global Messenger Units from [vendor] and [lessee] acquired said units from [lessor].'
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?