Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
'Secured Lender's Corner:' Protecting the Secured Lender Before a Mortgagor or Lessee Files Bankruptcy
Earlier this year, the United States Court of Appeals for the Fifth Circuit explored the application of the equitable lien doctrine after a secured equipment lender sought to recover directly from its borrower's insurance company once the borrower filed a Voluntary Petition under Chapter 11. The court affirmed the district court's denial of relief to the lender. This reinforces the importance that a secured lender protect itself when entering a transaction with a borrower or lessee to avoid a total loss if the borrower or lessee files a bankruptcy petition or if the leased equipment is damaged, missing or both.
A little diligence at the beginning of a transaction may avoid the unfortunate circumstance that befell the equipment lessor in the recent decision of the Fifth Circuit Court of Appeals in Sierra Equipment Inc. v. Lexington Insurance Co., 890 F.3d 555 (5th Cir. 2018). This case reveals what can occur when an equipment lessor did not require that a lessee make it a loss-payee or additional insured on the lessee's insurance policy.
The Sierra decision dealt with the application of a state (Texas) common law “equitable lien doctrine,” in a situation where a lessor of equipment (Sierra Equipment) sought to recover directly from an insurance company (Lexington Insurance Company), which covered the loss and destruction of leased equipment for the lessee. The case was originally filed in state court and removed by the defendant to the United States District Court, which dismissed the case for lack of standing because Sierra was not a party to the insurance contract. The Fifth Circuit affirmed in a decision that has application to both insolvency and insurance law.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
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?