By Porter Wright on Borrowers of Paycheck Protection Program (PPP) loans – together with their affiliates – who have loans in excess of $2 million and seek loan forgiveness will potentially need to complete necessity questionnaires according to the Small Business Administration. There are separate forms for for-profit and non-profit businesses and will likely affect 52,000 borrowers. My colleagues … Continue Reading
By Porter Wright on Several governmental agencies have issued a statement encouraging financial institutions to work with borrowers affected by the COVID-19 pandemic. The Board of Governors of the Federal Reserve System, Conference of State Bank Supervisors, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency issued a … Continue Reading
By Porter Wright on Background In loan agreements, lenders customarily require the borrower to make various financial covenants whereby the borrower promises to achieve certain financial metrics, often requiring the borrower to stay above or below certain thresholds based on its operations. Since financial covenants are based on past financial performance, breaches of financial covenants typically cannot be cured … Continue Reading
By Greg Daugherty on Every business owner must make a decision regarding what he or she will do with the business. If no family member is able or willing to assume ownership, an increasingly popular succession planning strategy has been to sell the business to an employee stock ownership plan (“ESOP”). ESOPs are popular in part because of the … Continue Reading
By Porter Wright on In this blog, we have described some of the original concerns with the “high volatility commercial real estate” loan regulation as well as some suggestions for change. These rules apply to certain real estate loans for acquisition, development and construction. Recently, there have been suggestions that changes are possible regarding “high volatility commercial real estate” loans … Continue Reading
By Walter Reynolds on Most of us are familiar with that old saw “location, location, location”. While location might enhance the value of real estate, including the location as part of the collateral description in the UCC financing statement can limit the protections provided to a secured creditor and may provide a strategy for attack by a bankruptcy trustee. … Continue Reading
By Porter Wright on Determining whether a security interest is properly perfected by using a state’s online lien search may be leading you astray. Perfecting a security interest in collateral establishes the priority of the secured party’s claim to such collateral, providing the perfected secured party with an interest in such collateral superior to the rights held by most … Continue Reading
By Porter Wright on The United States Court of Appeals for the Third Circuit plays a uniquely important role in the development of the bankruptcy laws. The liberal venue rule for bankruptcy cases set out in 28 U.S.C. § 1408 has led to the disproportionate filing of large and mega chapter 11 bankruptcy cases being filed in the District … Continue Reading
By Porter Wright on If you are a lender/mortgagee and your borrower/mortgagor is adding more real property collateral to the mortgage (in Ohio), how do you retain your first priority position in all mortgaged property while adding that property to the mortgage? This question is especially relevant when the borrower is assembling property as part of a development. The … Continue Reading
By Porter Wright on At a time of relative affluence in the farming industry, the FDIC has issued a warning on a need for monitoring agricultural credits. FIL-39-2014 (July 16, 2014) suggests that banking institutions of all sizes should carefully consider a recent, negative projection by the U.S. Department of Agriculture. While current market conditions are good, the projection … Continue Reading
By Porter Wright on FBI Director James Comey shared the bureau’s enforcement trends and objectives at the New York City Bar Association’s Third Annual White Collar Crime Institute on May 19. Comey recognized that although counter-terrorism is still a top priority for the agency, white-collar cases are receiving significant focus and resources. In the mortgage industry, agents are investigating … Continue Reading
By Porter Wright on In the unanimous ruling Monday, the U.S. Supreme Court resolved a split in circuits regarding the interpretation of the Mandatory Victim’s Restitution Act (MVRA). In Robers v. United States, the high court confirmed that for purposes of calculating restitution, the return to the lender of collateral securing a fraudulent loan is not completed until the … Continue Reading
By Brad Hughes on Last Spring, we discussed on this blog a trifecta of noteworthy lending cases pending before the Ohio Supreme Court. Today, the Court resolved one of them, and in doing so also resolved a certified conflict among Ohio’s appellate districts regarding whether Ohio’s Statute of Frauds bars a party from relying on an oral forbearance agreement … Continue Reading
By Porter Wright on 2013 was an active year for the Banking & Finance Law Report. Our authors covered a wide range of topics — from legislative and regulatory changes to court opinions to financing and bankruptcy matters in the healthcare, agricultural and oil and gas industries. To offer a glimpse into the news and trends of the past … Continue Reading
By Porter Wright on In a decision that will warm the hearts of vendors everywhere, the Court of Appeals for Ohio’s Eighth Appellate District recently upheld the enforceability of personal guaranty language in a credit application. See Wholesale Builders Supply, Inc. v. Green-Source Development, L.L.C., et al., 2013-Ohio-5129. This decision also serves as a reminder to read before signing. … Continue Reading
By Porter Wright on A recent change to Ohio’s agricultural lien law clarifies the interplay between security interests governed by Article 9 of the UCC and those governed by Ohio’s agricultural lien statutes, and confirms the ruling of the Sixth Appellate Court of Erie County in Ohio Dept. of Agriculture v. Central Erie Supply & Elevator Association, 2013-Ohio-3061. Central … Continue Reading
By Porter Wright on In its Oct. 30, 2013 decision in General Electric Capital Corporation v. Tartan Fields Gold Club, Ltd., et al., 2013-Ohio-4875, the Fifth District Court of Appeals made clear that a lender does not waive its right to enforce its rights upon the borrower’s default merely entering into negotiations to restructure a loan; the court further … Continue Reading
By Porter Wright on Secured lenders extending financial accommodations to borrowers whose collateral includes perishable food items should consider certain specific risks associated with such collateral. Notably, the Perishable Agricultural Commodities Act of 1930 (PACA) creates a statutory trust for the benefit of persons who originally sell the perishable agricultural commodities to such borrowers and are not paid. The … Continue Reading
By Porter Wright on In this hypothetical, we will consider the following circumstances. “Farmer Bob” grows wheat (i.e., crops) “AgBank” has loaned Farmer Bob money secured in part by his wheat “Massive Grain Elevator” wants to purchase Farmer Bob’s wheat Can Massive buy the wheat and not get the shaft from AgBank? It depends. In 1985 Congress passed the … Continue Reading
By Porter Wright on Commercial lenders will be glad to learn the Supreme Court of Ohio recently released a slip opinion overturning the Eighth District Court of Appeals’ decision in JNT Properties, LLC v. KeyBank, Nat’l Assoc. and concluding that KeyBank’s use of a "365/360" method of interest calculation in a commercial promissory note was not ambiguous. As previously … Continue Reading
By Porter Wright on In mid-September, an Ohio appellate court rendered a decision in a long-pending dispute that raises an important issue for health care lenders: the impact of a contested certificate of need application. The impact of such a contest should be carefully considered by health care lenders. On September 18, 2012, the Ohio Tenth District Court of … Continue Reading
By Porter Wright on Secured creditors of borrowers holding Federal Communications Commission ("FCC") broadcasting licenses, as well as such borrowers seeking credit, will be reassured by a recent decision of the United States Court of Appeals for the Tenth Circuit, In re: Tracy Broadcasting Corporation, released October 16, 2012. The Tenth Circuit has joined other courts in upholding the priority … Continue Reading
By Porter Wright on This article is Part Five in a seven-part series on how to structure sales and what to do when your customer fails to pay. You can find previous articles in this series here: Structuring Sales to Ensure Payment; Signs of Trouble Before Payment Default; Default by a Customer; Knowledge is Power and What to Consider … Continue Reading
By Porter Wright on This article is Part Four in a seven-part series on how to structure sales and what to do when your customer fails to pay. You can find previous articles in this series here: Structuring Sales to Ensure Payment; Signs of Trouble Before Payment Default and Default by a Customer: Knowledge is Power. Please subscribe to … Continue Reading
