The Anti-Lien: Another Security Interest in Land*
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Contracts Becomes in the Purchaser with Notice a Specific Duty to Perform the Covenant
Sec. 3 PRIVATE ADJUSTMENTS S437 contracts becomes in the purchaser with notice a specific duty to perform the covenant. (2) The other theory explains the enforcement of restrictive equitable servitudes as an extension of the legal doctrine of negative easements to new situations. Few if any courts follow either the “contract” theory or the “property” theory of equitable servitudes consistently, but the general view that one takes of the theories may affect results. Thus, the fact that the English courts came not to apply Tulk to affirmative covenants and, as we shall see infra, p. S444, did not allow the benefit of equitable servitudes to be held in gross, may reflect [p*962] a “property” theory of equitable servitudes. In England, as we have seen supra, p. S418, the benefit of an easement may not be held in gross, and courts throughout the Anglo-American world have had difficulty with enforcing easements that compel the holder of the burdened land to do something. See note 3, supra. Other questions the answers to which might depend on whether one espoused a “contract” or a “property” theory of equitable servitudes are: (1) Is the original convenantor still bound on the contract after he or she has sold the land? (The original covenantor is bound as surety where the covenant is contained in a lease. See DKM3, p. 693. By and large, the original covenantor is not bound after he or she has conveyed away a fee estate. 2 A.L.P. § 9.18.) (2) What formalities must be followed in creating the covenant? (You will recall that the Statute of Frauds has different requirements for contracts concerning land and conveyances of interests in land. -
Credit Applications and Beyond
Credit Enhancements: Beyond the Personal Guaranty Thomas R. Fawkes and Brian J. Jackiw Goldstein & McClintock LLLP Warning Signs of Impending Default • Deviations in the manner or timing of counterparty payment may suggest liquidity issues or a potential bankruptcy filing • Counterparty requests lengthening of payment terms or additional trade credit • Counterparty becomes less cooperative and avoids communications concerning outstanding amounts due • Public reports (such as those published by Dun & Bradstreet) suggest that the counterparty is not paying its trade debts in a manner consistent with past practices • Rumors of the counterparty’s imminent demise are being conveyed by competitors or industry sources 2 What do you do if you do not have credit enhancements in place? TAKE THE MONEY!!!! • Comply strictly with any contracts in place • Do not extend additional credit • Evaluate past history • Make every effort to maintain ordinary course of business terms 3 Credit Enhancements and Protections Credit enhancements offer greater protection in the event a counterparty experiences financial distress and/or becomes a debtor in bankruptcy, and include: • Irrevocable Letters of Credit • Pre-payment of goods and services • Guaranty Agreements and Puts • Cross/Intercompany Guarantees • Deposits • Trust Agreements • Credit Insurance • Security Interests in Collateral (including purchase-money security interests) 4 Standby Letters of Credit • A letter of credit (LOC) is, simply put, a commitment to make a payment, typically issued by a counterparty’s -
Distinguishing Between Securities Account and Deposit Accounts Under the UCC
As Appeared in the Illinois Bar Journal December, 2000, Volume 88 #12 Distinguishing Between Securities Account and Deposit Accounts Under the UCC By René Ghadimi, Katten Muchin Zavis Rosenman ©Reprinted with permission of the Illinois Bar Journal. Copyright by the Illinois State Bar Association, on the Web at <www.isba.org> Lenders frequently take security interests in the deposit accounts and securities accounts of their borrowers to secure the repayment of borrowers loan obligations. This article explores the basis for perfecting security interests in securities and deposit accounts and discusses the often important and sometimes elusive distinction between the two. The first step [in] determining how to perfect a lien is to decide whether a given account is a deposit or a securities account, as such terms are defined in the UCC in the relevant jurisdiction. Cash collateral accounts of one form or another are an important part of many finance transactions. These accounts may constitute significant assets of a borrower and can assume many forms, including operating accounts, capital subscription accounts, various types of reserve accounts and cash management accounts. These accounts may contain funds that are maintained overnight or for extended periods. More often than not, business realities dictate that the borrower be allowed to maintain some degree of control over the funds and invest them in financial assets rather than letting them languish as cash balances. The question for lenders who typically take a pledge of these accounts to secure the loan obligations of their borrower is how to perfect their security interest. These lenders must confront the issue of whether these various accounts are deposit accounts or securities accounts under the Uniform Commercial Code, or maybe a little of both. -
MARSHALLING SECURITIES and WORDS of RELEASE
MARSHALLING SECURITIES and WORDS OF RELEASE Note on Hill v Love (2018) 53 V.R. 459 and Burness v Hill [2019] VSCA 94 © D.G. Robertson, Q.C., B.A., LL.M., M.C.I.Arb. Queen’s Counsel Victorian Bar 205 William Street, Melbourne Ph: 9225 7666 | Fax: 9225 8450 www.howellslistbarristers.com.au [email protected] -2- Table of Contents 1. The Doctrine of Marshalling 3 2. The Facts in Hill v Love 5 2.1 Facts Relevant to Marshalling 5 2.2 Facts Relevant to the Words of Release Issue 6 3. The Right to Marshal 7 4. Limitations on and Justification of Marshalling 9 4.1 Principle 9 4.2 Arrangement as to Order of Realization of Securities 10 5. What is Secured by Marshalling? 11 5.1 Value of the Security Property 11 5.2 Liabilities at Time of Realization of Prior Security 12 5.3 Interest and Costs 14 6. Uncertainties in Marshalling 15 6.1 Nature of Marshalling Right 15 6.2 Caveatable Interest? 17 6.3 Proprietary Obligations 18 7. Construction of Words of Release 19 7.1 General Approach to the Construction of Contracts 19 7.2 Special Rules for the Construction of Releases 20 7.3 Grant v John Grant & Sons Pty. Ltd. 22 8. Other Points 24 8.1 Reasonable Security 24 8.2 Fiduciary Duty 24 8.3 Anshun Estoppel 25 This paper was presented on 18 September 2019 at the Law Institute of Victoria to the Commercial Litigation Specialist Study Group. Revised 4 December 2019. -3- MARSHALLING SECURITIES and WORDS OF RELEASE The decisions of the Supreme Court of Victoria in Hill v Love1 and, on appeal, Burness v Hill2 address the doctrine of marshalling securities and also the construction of words of release in terms of settlement. -
How Protective Are Ukraine's International Bonds?
GLOBAL LAW INTELLIGENCE UNIT How protective are Ukraine’s international bonds? 27 January 2015 © Allen & Overy 2015 2 The Ukraine international bond issues | January 2015 How protective are Ukraine’s international bonds? Introduction This note contains a brief commentary on some of the main legal terms in international debt issues of or guaranteed by Ukraine. The objective is to analyse the degree to which these bonds are consistent with practice in the international capital markets and to weigh up the balance between the sovereign debtor and the bondholder creditors in terms of the rights and protections granted by the terms of the bonds. Our main conclusion is that the bond issue legal terms seek to enhance stability for both Ukraine and the bondholders if there is a crisis. International bond issues reviewed This commentary is based on the terms set out in an issue by Ukraine of USD700 million 6.75% notes due 2017 covered by a prospectus dated 13 November 2007. We have, so far, looked at another 14 or so prospectuses covering international bonds, all governed by English law, and the relevant terms discussed in this note seem to be the same or very similar. Nearly all are for U.S. dollars. These other prospectuses are for English law issues where the prospectus is dated October 2005, November 2006, January 2007 (Swiss francs), November 2009 (Naftogas restructured guaranteed issue), September 2010, November, 2012, February 2011, June 2011, July 2012, August 2012, November 2012, April 2013 and February 2014. There are significant differences in the latter document. We have also looked through a prospectus of 7 December 2012 for an issue of around USD550m notes issued by “Financing of Infrastructural Projects” guaranteed by Ukraine where there are detailed differences compared to the direct bond issues listed above. -
Equity and Trusts
Equity and Trusts Editor: Justice Mark Leeming MARSHALLING SECURITIES AND CONSTRUING RELEASES IN EQUITY The unanimous decision of the Victorian Court of Appeal in Burness v Hill1 is a timely reminder of the advantages to a junior secured creditor of the equitable doctrine of marshalling, and of the distinct ways in which common law and equity treat a release. FACTUAL BACKGROUND A simplified summary of the salient facts is as follows. Before his bankruptcy and death in 2016, Mr Thomas Love had borrowed substantial amounts from the Commonwealth Bank of Australia, secured by registered mortgages over three properties, A, B and C. Mr Antony Hill was Love’s solicitor in extensive and prolonged litigation. Love granted a second mortgage over property A to secure his indebtedness to Hill. Love was in default to the bank, which exercised its power of sale in 2011 and sold Property A for some $10 million. That was insufficient to discharge Love’s indebtedness to the bank. In the meantime, Hill sued Love in the County Court of Victoria and, in 2013, reached an agreement whereby judgment would be entered in the amount of $2.2 million, with execution stayed for up to a year. The agreement contained a generally worded release. In 2014, the bank sold Property B, but once again the sale proceeds were insufficient to discharge Love’s indebtedness to it. Hill lodged a caveat over Property C, asserting a right to be subrogated to the bank’s mortgage, and later commenced proceedings seeking an entitlement to be paid the $2.2 million judgment debt plus interest and costs from the proceeds of sale. -
Perfecting a Security Interest in an LLC Membership Interest in Virginia
Perfecting a Security Interest in an LLC Membership Interest in Virginia Rebecca C. Bowen Thompson McMullan, P.C. (804) 698-6223 / [email protected] With limited liability companies being the entity of choice for many businesses in Virginia and the lending opportunities that they create, it is important to understand how to perfect a security interest in an LLC membership interest. Under Virginia’s UCC, a membership interest may be classified as either a “security” (Va. Code § 8.8A-103(c)) or a “general intangible” (Va. Code § 8.9A-102(42)). Establishing and determining the correct classification is important because different rules are invoked for the perfection and priority of a security interest in a security versus a general intangible. Va. Code § 8.8A-103(c) provides that a membership interest is not a “security” unless it is “dealt in or traded on securities exchanges or in securities markets, its terms expressly provide that it is a security governed by [Article 8.8A of the Virginia Code], or it is an investment company security. However, an interest in a partnership or limited liability company is a financial asset if it is held in a securities account.” Accordingly, a membership interest is not a “security” unless: the LLC’s articles of organization or operating agreement “opt-in” to Article 8.8A by specifying that the membership interests are securities governed by Article 8.8A; (ii) the membership interests are actually dealt in or traded on securities exchanges or securities markets; (iii) the LLC is an investment company; or, (iv) the membership interest is a financial asset held in a securities account. -
Exhaustion and the Limits of Remote-Control Property
Denver Law Review Volume 93 Issue 4 Symposium - Future World IP: Legal Article 7 Response to the Tech Revolution December 2020 Exhaustion and the Limits of Remote-Control Property Molly Shaffer Van Houweling Follow this and additional works at: https://digitalcommons.du.edu/dlr Recommended Citation Molly Shaffer Van Houweling, Exhaustion and the Limits of Remote-Control Property, 93 Denv. L. Rev. 951 (2016). This Article is brought to you for free and open access by Digital Commons @ DU. It has been accepted for inclusion in Denver Law Review by an authorized editor of Digital Commons @ DU. For more information, please contact [email protected],[email protected]. EXHAUSTION AND THE LIMITS OF REMOTE-CONTROL PROPERTY MOLLY SHAFFER VAN HOUWELING t ABSTRACT In this Article I argue that intellectual property (IP) exhaustion should be understood against the backdrop of a long history of skepti- cism toward what I call "remote-control" property rights. IP is not the only field of law that gives remote rights-holders the ability to constrain the behavior of other people to use things in their rightful possession. Tangible property law-in particular the law of servitudes-features similar mechanisms, but hems them in with doctrinal limitations. Look- ing to this body of law helps us more clearly to recognize remote-control property's benefits and costs and, thus, to articulate a rationale for IP exhaustion as a limitation on remote-control IP. At the same time, re- mote-control IP is special. Restrictions on the use of works of creativity and invention have implications for the promotion of progress of science and the useful arts. -
Protecting Artistic Property with the Equitable Servitude Doctrine Thomas W
Marquette Law Review Volume 46 Article 4 Issue 4 Spring 1963 Protecting Artistic Property With the Equitable Servitude Doctrine Thomas W. Bertz Follow this and additional works at: http://scholarship.law.marquette.edu/mulr Part of the Law Commons Repository Citation Thomas W. Bertz, Protecting Artistic Property With the Equitable Servitude Doctrine, 46 Marq. L. Rev. 430 (1963). Available at: http://scholarship.law.marquette.edu/mulr/vol46/iss4/4 This Article is brought to you for free and open access by the Journals at Marquette Law Scholarly Commons. It has been accepted for inclusion in Marquette Law Review by an authorized administrator of Marquette Law Scholarly Commons. For more information, please contact [email protected]. PROTECTING ARTISTIC PROPERTY WITH THE EQUITABLE SERVITUDE DOCTRINE* TiOMAS W. BERTZ** Law like nature abhors a vacuum. And if there be no law fostering and protecting the business interests of a growing segment of indus- try, the courts will readily adapt existing legal doctrines to meet the commercial needs of an industrial innovation. This principle of law has asserted itself repeatedly and the time may be ripe for it to assert itself again. The vacuum, so to speak, is the void in the law caused by the inadequate coverage of the Copyright Act; the filling force is the resurgence of the doctrine of equitable servitudes as applied to chattels. Although the doctrine has existed for over a century, the employ- ment of it to enforce restrictions placed upon personalty in the mer- cantile world has been judicially restrained. The infrequent use of the doctrine was caused by the courts' rejection of it as an enforceable equitable device and by their past refusal to give full recognition to it. -
Partnership Property
PARTNERSHIP PROPERTY. In an article entitled "What Constitutes a Partnership ? " which appeared in the March number of this magazine,1 the writer endeavored to maintain the thesis that partners are co-proprietors and that the conception of partnership at the 2 Common law is that of co-ownership of a trade or business. If A stands in such a relation to B's trade that he gains if the trade is profitable and loses if it results in loss, these facts are significant only so far as they suggest an inference that he who shares the profit and loss of a trade is really one of the owners of it. Such an inference, however, is obviously not a neces- sary inference. Some other relation than that of owner may be adequate to explain A's connection with the enterprise. He may be a factor or a lessor or a lender. In a doubtful case it is even true that the inference will be against the existence of a partnership; for the courts recognize that he who seeks to hold A responsible for B's acts must make out a clear case in support of his claim. It follows that to make profit-sharing in any form the test of partnership represents a confusion of thought. To insist upon such a criterion involves the selection of one of the incidents of ownership as a conclu- sive test of the existence of the partnership relation, although that incident often attaches to relations other than that of ownership.' 137 Am. Law Reg. (N. -
Rights of Various Types of Creditors in Property Unavailable to the Debtor
RIGHTS OF VARIOUS TYPES OF CREDITORS IN PROPERTY UNAVAILABLE TO THE DEBTOR WHEN SATISFACTION cannot be obtained out of the general assets of a debtor, creditors will often attempt to realize on claims which are not avail- able to the debtor himself. Some of these claims arise out of transactions which injure debtor and creditors alike; others grow out of dealings which work injury only to creditors. While in appropriate circumstances these transactions will give rise to a cause of action,1 that cause of action will be vested not in all creditors, but only in those who are deemed to be injured. For the purposes of this comment it will be assumed that all of the other elements of recovery are present; an attempt will then be made to determine what sort of creditor may, and what sort may not, realize on the various claims unavailable to the debtor.2 Further investigation will be made of the assertion of such claims by a representative of creditors; for on such occa- sions similar questions are raised, though they are framed in terms of the extent of the representative's recovery, and the methods of distributing the recaptured property. A creditor who attempts to recover on claims unavailable to the debtor will normally rely on one of two theories. In situations falling under the first theory the debtor appears to be in command of greater resources than are actually at his disposal-a misleading impression that is created through the complicity, or at least passive acquiescence, of a third party. The basis of recovery, then, will be that credit was extended in reliance on the mis- representations attributable to that party. -
United States
Finance Handbook 2011 Country Q&A United States George E Zobitz, Paul H Zumbro and Christopher J Kelly www.practicallaw.com/9-501-2871 Cravath, Swaine & Moore LLP OVERVIEW OF THE LENDING MARKET In a minority of states, however, a mortgage transfers title to the lender until the secured obligations are met. 1. Please give a brief overview of the main trends and important Deeds of trust. A deed of trust is a variant of the mortgage and developments in the lending market in your jurisdiction in is used in many states in its place. It usually involves a convey- the last 12 months. ance of the real property by the borrower to a third party, who holds it in trust for the lender as security for the debt. The US loan market has experienced some volatility over the past Leasehold mortgages/leasehold deeds of trust. A leasehold 12 months, being marked by rapid swings in market demand for mortgage or deed of trust enables a lender to take a security in- new loans. At the beginning of 2010, much of the loan market ac- terest in the borrower’s interest as a tenant under a lease. Upon tivity focused on extending the maturity of existing loan facilities an event of default, the lender can foreclose on its leasehold through amend and extend transactions, as few investors were mortgage and become the tenant under the lease, or transfer the willing to make new money loans. As the year has progressed, tenancy to another entity. Leases often prohibit such mortgages new syndicated loan financings have become more prevalent, in- or deeds of trust, or require the landlord’s consent.