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Using a True Lease or a TRAC Lease
An equipment financing company will often decide whether it wants a transaction to be a true lease or a TRAC lease as opposed to a retail sale. A good reason to be able to make the distinction is to determine what might be the best structure for an equipment financier. This article explores the differences. We also consider what might happen when a lessee/buyer files a bankruptcy proceeding and the judge determines that the deal (that was carefully made a true lease or a TRAC lease) is a determined by the court to be a disguised retail sales agreement.
'Lease' vs. 'Security Interest'
According to the Uniform Commercial Code (UCC), generally adopted as the law in every state, and specifically Section 1-203 therein, “whether a transaction in the form of a lease creates a lease or a security interest is determined by the facts of each case.” UCC § 1-203(a). Looking at the remainder of UCC § 1-203, although the definition of a “lease” is not spelled out, it is clear that it will not be a “lease” “… if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee and 1) the original term of the lease is equal to or greater than the remaining economic life of the goods; 2) the lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods; 3) the lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement; or 4) the lessee has an option to become the owner of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.”
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.
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.
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.
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?