In our
Creditors Rights,
Loan Enforcement and
Creditor Bankruptcy
Representation
practice group:
Brett D. Anders
Andrew M. Bond
Michael A. Campbell
Michelle L. Clardy
Sherry K. Dreisewerd
Robert J. Edwards
David D. Ferguson
Daniel J. Flanigan
Howard B. Gelt
Amy E. Hatch
Aaron C. Jackson
G. Edgar James
Shanti M. Katona
Scott S. Magdziak
Ryan J. Mason
Matthew R. Moriarity
Jason A. Nagi
Andrew J. Nazar
Thomas J. O'Neal
Anthony C. Porcelli
Jason L. Pyrz
Peter J. Schmidt
Scot J Seabaugh
Jean Soh
Terrance M. Summers
Jerry L. Switzer Jr.
Michael M. Tamburini
Angela S. Taylor
Jennifer K. Vath
Christopher A. Ward
Llynn K. White
To learn more about
this group,
click here.
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May 2010
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A Loan Enforcement e-Newsletter: |
Lender's Edge
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The Creditors Rights, Loan Enforcement and Creditor Bankruptcy Representation practice group provides these e-communications periodically to keep you updated on recently adopted legislation, important issues dealing with distressed assets and key changes in the law. To preview the entire edition of this Lender's Edge e-Newsletter, click here.
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In this Issue:
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The Automatic Stay in Chapter 11 Bankruptcy and Actions Against Co-Obligors: When is Stay-Relief Necessary? |
The automatic stay in bankruptcy stays all actions by a creditor to collect a debt against a debtor that arose before the filing of the bankruptcy case. But, does the automatic stay prohibit lenders who had the foresight to require guarantors or co-makers on a loan from proceeding against them after the borrower company files Chapter 11 bankruptcy? The answer is generally “no”, except in unusual circumstances.
An example helps illustrate the point. Lender makes a commercial loan to Borrower LLC. Borrower LLC is owned by two brothers, Barry and Bryce Borrower, each of whom own a 50 percent membership interest in Borrower LLC. Times are tough economically, and Borrower LLC defaults on its $2 million loan obligation owed to Lender. Discussions for a workout of the loan ultimately fail, and Lender files for foreclosure of Borrower LLC’s assets. A sale is pending. [ Full article ... ] |
Impacting the (Off) Balance Sheet: Participating Interests and FAS 166 |
In June 2009, the Financial Accounting Standards Board issued Financial Accounting Standard (FAS) 166. This new Standard, along with FAS 167, changes the way that banks account for securitized assets that are currently excluded from their balance sheets. The Standard effectively places new rules on the terms of loan participation agreements that every institution should carefully observe. As a result, it significantly limits what qualifies as a “participating interest” for purposes of derecognizing transferred assets.
The new Standard is effective for an entity’s first annual reporting period beginning after November 15, 2009. For calendar year filers, this Standard became effective on January 1, 2010. The Standard amends its predecessor, FAS 140, and imposes requirements on terms of loan participation agreements that are executed or modified after that date. The Standard applies to transfers that occur on or after the effective date. [ Full article ... ] |
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For More Information:
For more information, or if you have any questions, regarding creditors rights, loan enforcement or creditor bankruptcy representation, please contact:
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Polsinelli Shughart | In the News |
Headlines and Bylines from polsinelli.com |
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About Polsinelli Shughart PC
With more than 500 attorneys, Polsinelli Shughart PC is a national law firm that is a recognized leader in the areas of business litigation, financial services, bankruptcy, real estate, business law, labor and employment, construction, life sciences and health care. Serving corporate, institutional and individual clients regionally, nationally and worldwide, Polsinelli Shughart is known for successfully applying forward-thinking strategies for both straightforward and complex legal matters. The firm can be found online at www.polsinelli.com. |
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