Can you really lease a cow?
According to the Sixth Circuit, the answer is “yes.” Dairy cattle leasing is an increasingly popular method for producers to add to their herds while conserving capital for other purposes. Leasing is particularly attractive for thinly capitalized producers who wish to spread their fixed costs across more cows.
On August 26, 2014, Judge Drain, of the Bankruptcy Court for the Southern District of New York, concluded the confirmation hearing in Momentive Performance Materials and issued several bench rulings on cramdown interest rates, the availability of a make-whole premium, third party releases, and the extent of the subordination of senior subordinated noteholders. This four-part Bankruptcy Blog series will examine Judge Drain’s rulings in detail, with Part I of this series providing you with a primer on cramdown in the secured creditor context.
In its Scantling opinion, the Eleventh Circuit held that a Chapter 20 debtor (a chapter 13 debtor who previously filed and concluded a chapter 7 case) could strip off valueless junior liens on her principal residence even thought she was ineligible for a discharge in the chapter 13 case. Full disclosure: our firm, Berger Singerman, represented the appellee, Ms. Scantling.
On August 26, 2014, Judge Drain concluded the confirmation hearing in Momentive Performance Materials and issued several bench rulings on cramdown interest rates, the availability of a make-whole premium, third party releases, and the extent of the subordination of senior subordinated noteholders.
The lead-participant relationship arising from a loan participation has become a fairly contentious one over the last two years as the interests of the two have diverged. For example, loan participants that may be in a troubled condition are never terribly anxious to hear that the lead bank has obtained a current appraisal of the primary collateral. Likewise, a strong loan participant my push a weak lead bank to take more decisive action regarding collecting the loan and possibly foreclosing on the collateral.
On August 26, 2014, the Ninth Circuit Court of Appeals held that Wells Fargo (the “Bank”) did not violate the automatic stay by placing a temporary administrative hold on a chapter 7 debtor’s bank accounts. See In re Mwangi, 2014 WL 4194057 (9th Cir. 2014). Holland & Hart represented the Bank in this significant victory.
On August 29, 2014, Judge John T.
Bankruptcy Remote? Maybe Not
Lenders typically have extensive requirements for what inventory will be deemed “eligible” and included in a borrower’s borrowing base for purposes of determining how much the lender is required to lend. One of those typical requirements is that the inventory be owned by the borrower and located at a borrower location in the United States of America, where it will be subject to the Uniform Commercial Code and amenable to an Article 9 security interest.
Several recent legal and regulatory developments in the U.S. will likely alter the makeup of the group of arrangers and financiers willing to arrange and provide financing for certain highly leveraged transactions, and also provide guidance to those considering a loan-to-own or related acquisition strategy, in order to help avoid potential pitfalls.
Revised Leveraged Lending Guidance