TOUSA, Inc.: Upstream Guaranties, Fraudulent Transfers and “Cute” Savings Clauses

As noted in previous editions of Dispatches from the Trenches, guaranties have traditionally been subject to as more judicially-created defenses than any other finance document. Judges have, for example, required lawsuits to be brought against the primary obligor prior to suing the guarantor (the dreaded “guaranty of collection” instead of “guaranty of payment and performance”).…

Tilted Vehicles: Roll Through UCC Provisions Carefully and Watch Out for Speed Trap

Prudent lenders active in the financing of motor vehicles understand the intricacies that result from the interplay between the Uniform Commercial Code (the “UCC”) and state Certificate of Title Acts. This edition of Dispatches from the Trenches addresses a few key areas where overlapping provisions can complicate matters. It also provides a couple of notable statutory and case law updates. 1. Proper Method of Perfection—Watch out for Idaho, Illinois,…

More About ‘Boilerplate’…Skip at Your Own Risk

The last edition of Dispatches from the Trenches addressed a few areas of boilerplate which are frequently overlooked– namely amendment and waiver, merger and integration and severability provisions. This edition continues that theme by discussing further assurances clauses, notice provisions, counterpart language and miscellaneous interpretive provisions. A. Further assurances A further assurance provision is like…

A Little Something About Breaching the Peace

Most lenders who have had one or more deals go bad are familiar with the magical words “breaching the peace.” This legal concept can come into play when a borrower breaches its obligations under the underlying loan documents and the lender desires to repossess the goods pledged as collateral for the loan and sell such…