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 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 The Ohio Judicial Conference has issued a bench card, a copy of which is attached, that gives Ohio’s Common Pleas Court judges a checklist they may use when presented with an order seeking judgment on a note containing a warrant of attorney. While the bench card is merely advisory, it represents a victory for those … 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 Porter Wright on Another attack on the use of warrants of attorney to confess judgment was recently introduced into the 132nd Ohio General Assembly. H.B. 67 was introduced on February 16, 2017 by Representative Ron Young, a Republican of Leroy Township in Lake County. The bill has not yet been assigned to a committee. The bill seeks to … 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 Steven Hoying on Last year, as noted by this blog, the FDIC, OCC, and Federal Reserve imposed harsher capital requirements on certain “high volatility commercial real estate,” or HVCRE, exposures, in accordance with the Basel III international banking standards. These new requirements were opposed not only by the real estate industry but also by banking associations, particularly the … Continue Reading
By Steven Hoying on Last year, as discussed by this blog, the NCUA proposed a new set of regulations designed to ease restrictions on business lending by credit unions. These regulations would remove all prescriptive limits on member business loans (“MBLs”) and replace them with the fundamental principle that commercial loans must be appropriately collateralized. The NCUA recently approved … Continue Reading
By Steven Hoying and Porter Wright on The Ohio General Assembly is currently considering a bill that would greatly restrict creditors’ ability to ask debtors to sign cognovit notes. A cognovit note allows a creditor, upon a debtor’s default, to enter judgment against the debtor without the usual notice or hearing. Current Ohio law, specifically Ohio Revised Code Section 2323.13, generally enforces … Continue Reading
By Steven Hoying and Porter Wright on Credit unions’ ability to lend to businesses may receive a boost if proposed NCUA regulations are approved. Business loans are becoming an increasingly important part of credit unions’ operations. Total business loans at federally insured credit unions grew from $13.4 billion in 2004 to $51.7 billion in 2014, growing from 3% of all total credit … Continue Reading
By Steven Hoying and Porter Wright on Lenders who finance commercial real estate exposures should be aware of new regulations that impose harsher capital requirements on certain “high volatility commercial real estate,” or HVCRE, exposures. In June 2013, the FDIC, OCC, and Federal Reserve jointly approved proposed rules intended to implement new international banking standards, known as the Basel III Capital Accords, … 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 Lenders can typically credit bid at sheriff’s sales in an amount well in excess of the minimum bid requirements, as a result of which some real estate investors shy away from attending and bidding at sheriff’s sales because they feel like they won’t necessarily get a “bargain”. Accordingly, lenders are typically the successful purchaser at … 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 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 Commercial leases often lack leasehold financing provisions despite the significant impact such provisions can have on the business dealings of the tenant during the term of the lease. Long-term, creditworthy tenants, those who have value in their leaseholds such as restaurants and hotels, are often prime candidates for leasehold financing. A leasehold mortgage is very … 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 As with our prior posts on oil and gas leases in bankruptcy (located here and here), this post presents another thorny issue – namely, “Is an oil and gas lease a lease at all?” Whether an oil and gas lease is a “lease” is significant in the bankruptcy context, because the Bankruptcy Code has several … Continue Reading
