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The Ability to Collect Rentals Under Article 2A Finance Leases or Leases with 'Hell or High Water' and/or Waiver of Defenses Provisions
In a recent opinion by a Magistrate Judge, Federal Trade Commission v. IFC Credit Corp., 2008 WL_1001154 (U.S.Dist.Ct. N.D.Ill. April 9, 2008), the court granted a NorVergence assignee's motion to dismiss one count of the FTC's complaint ' seeking to deny enforceability of the floating forum selection clause found in the leases acquired by such assignee (such holding being consistent with the Seventh Circuit's decision in Aliano Bros. as noted in the Forum Selection section below) ' but denied IFC's motions on two other counts. At this very early stage in the lawsuit, the court appears to be quite deferential to the FTC's arguments against IFC. Although IFC argued that the lessees ' small businesses and religious and other not-for-profit organizations ' were not 'consumers' under the Federal Trade Commission Act, the court (indicating that this issue was one of first impression under the FTCA) was inclined to defer to the agency's interpretation of the statute, which interpretation included such lessees as 'consumers.' The court also listed a good number of instances of alleged complicity by IFC in NorVergence's fraudulent scheme sufficient to warrant a trial.
Although difficult to tell for certain, some of the statements made by the court may betray a lack of understanding of financing industry practice. For example, the court refers to IFC's purchase of leases 'at a discount' ' perhaps implying that IFC knew it was purchasing questionable paper ' when what IFC paid may have merely equaled the present value of an aggregate payment steam, computed using an ordinary and reasonable discount rate of interest. In addition, the facts that: 1) the lessees appear to have been obligated by the waiver of defense clauses in the leases to continue paying IFC even if the lessees had defenses to paying NorVergence; and 2) IFC could argue that the leases were stand-alone equipment leases rather than a part of an integrated package of services, were both characterized as parts of a 'scheme.' In any event, to the extent that an assignee can be proven to have been aware of or part of a deceptive and fraudulent scheme, the UCC would not permit such an assignee to take advantage of a waiver of defenses clause ' whether or not the lessees are justifiably characterized as consumers.
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?