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Lender Beware: Ignore Suspicious Activity at Your Own Peril
In Grede v. Bank of New York Mellon Corp. (In re Sentinel Management Group, Inc.), 809 F.3d 958 (7th Cir. Jan. 8, 2016), the U.S. Court of Appeals for the Seventh Circuit held that a lender who should have discovered that its borrower lacked authority to pledge assets is not protected by a good-faith defense to a fraudulent transfer action. Without this defense, the lender lost its security. Because the lender was left with an unsecured claim, the court also addressed the question of whether the priority of the lender's claim should be further reduced through equitable subordination.
Background
Sentinel was a cash-management firm, investing its customers' cash in liquid low-risk securities. Sentinel also traded on its own account, with money borrowed from Bank of New York Mellon Corp. and Bank of New York (affiliated entities referred to jointly as BNYM). BNYM required that its loans be secured by its borrower's assets. Lacking adequate assets to provide the bank with the required security, Sentinel improperly pledged securities that it had bought for its customers with their money to collateralize the BNYM loans.
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.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?
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.