Bernstein Law Firm Quarterly
In this quarterly issue of Bernstein Law Firm's client advisory, our attorneys keep you current on a number of issues vital to the health of many businesses; this issue focusing on the new transfer tax ruling in Chapter 11 Bankruptcy, Confessions of Judgment under PA law and Consignments under revised Article 9 of the Uniform Commercial Code. We encourage you to share these advisories with others who might benefit from the information.
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|Shawn P. McClure
|Confession of Judgment Under Pennsylvania Law
As a creditor perhaps there is no greater tool than a valid confession of judgment clause within your written agreement clause with a customer. Imagine a customer fails to make payment on its commercial credit account. Now you must decide whether or not to hire an attorney and initiate a lawsuit. However, the last time a lawsuit was filed on one of your accounts, it was months, maybe longer before you received payment. A confession of judgment clause provides that one party agrees to allow the other party to the contract enter judgment against him or her.
Consignments: My How You've Changed!
| While lessors are rarely involved directly with inventory financing, there are times when it is important for them to understand the issues surrounding security interests in inventory. Once in a while, a lessee's inventory may be looked to as additional collateral in certain transactions. A lessor may also lease/finance goods that become 'inventory' in the hands of the lessee (e.g. an equipment rental lessee). A lessor may place recovered goods with a remarketer "on consignment." As such, it is important for lessors to understand the treatment of consignments under revised Article 9 of the Uniform Commercial Code (the "UCC").
Supreme Court Issues Ruling Clarifying Transfer Tax Exemption in Chapter 11
|The recent Supreme Court decision clarifying the bankruptcy transfer tax exemption that allows debtors to avoid paying stamp taxes or similar transfer taxes on assets transferred as part of a confirmed Chapter 11 plan of reorganization. The Supreme Court struck down a ruling that had stated the transfer tax exemption could be applied to pre-confirmation asset sales. As a result, the use of pre-confirmation Section 363 asset sales by debtors may be restricted.