California Senate Bill 1235 Will Not Become Effective Before Year End 2019.

Recently enacted California Senate Bill 1235 will require consumer-like disclosures to be made on certain commercial finance products under $500,000, including small business loans and merchant cash advances, and leases with nominal purchase options, among other things. Many clients and friends  have questioned when the new law will become effective. The Dept. of Business Oversight ("DBO") follows a set of comprehensive rules and requirements that include 
pre-text   and post-text comment periods and when complete, the formal text is submitted to the Office of Adminstrative Law ("OAL") for its final approval.  The DBO has assured us that the legislation will not become effective before the expiration of these comment and approval periods or until the quarter following final approval. As such, compliance with the legislation will not be required at least through the end of 2019.  On December 4, 2018, the DBO Commissioner published an invitation for the first round of pre-text comments, which are due by January 29, 2019. 

22917 Burbank Blvd.
Woodland Hills, CA 91367-4203.
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Marshall Goldberg

(Selected for Inclusion in 2019 SuperLawyers Magazine-10th consecutive year)
"Sears, America's Store," also known as Sears Holdings, after a 125-year run as one of America's leading retailers, filed for bankruptcy protection October 15th after an extended number of years of barely remaining solvent. The company survived this long as a result of having billions of dollars of its CEO's own money with which to maneuver financially. Eddie Lampert, the CEO of Sears for the past five years, will step down from his position as CEO, effective immediately, but will continue as Sears' chairman of the board. 
 Listing $11.3 billion in liabilities and $7 billion in assets, Sears Holdings announced that it had appointed Mohsin Meghji, managing partner of M-III Partners, as its chief restructuring officer. The bankruptcy will result in the closing of 142 stores around the end of 2018, with sales to liquidate inventory and other assets to begin shortly after the bankruptcy filing. Sears has 68, 000 employees and approximately 700 stores, which have often been under-supplied as a result of product vendors who lost their trust in the company as a viable retailer. Many of these stores have never been visited by younger shoppers, who don't consider the retailer to be an option for their retail needs.  Read More
The U.S. Bankruptcy Code (Title 11), under § 363, allows a Chapter 11 bankruptcy debtor, acting in the capacity of a debtor-in-possession, to sell assets at auction, thus giving the debtor more control in their ultimate disposition than in a Chapter 7 liquidation case where a trustee may sell or transfer assets without the participation of a debtor-in-possession.  
A § 363 sale has the potential advantage gained through an auction where participants submit bids competitively, and the final sales price closely reflects the best possible result for their disposition under the present circumstances, which may reflect a better alternative than reorganization. Potential buyers may purchase assets at a bargain price without any threat of a reversal of the sale while obtaining ownership of assets free and clear of any lien or claim.  Read More
Some interesting and trendsetting news from Japan's bankruptcy courts surfaced at the end of the summer of 2018. Nobuaki Kobayashi, the trustee of a hacked Japanese cryptocurrency exchange's bankruptcy estate, opened an online claims submission process for interested parties to recoup their losses. What made this a potentially trailblazing event, was that Kobayashi, as trustee, had the ability to make distributions in bitcoin and BCH (bitcoin cash), in lieu of paying the claims' value in fiat currency. More than some would say this is a significant procedural achievement for creditors and is likely a harbinger of the future. Read More
The California Residential Mortgage Lending Act (CRMLA) and the California Financing Law (CFLL), respectively in code sections Cal. Fin. Code §50501.5 and Cal. Fin. Code §22707.5, as well as the California Franchise Investment Law (CFIL) in Cal. Corporations Code §31406, empower the state's Commissioner of Business Oversight to issue citations to offenders who violate the CFLL, CRMLA, and CFIL, or any rule or order issued pursuant to these California laws. Read More

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December 2018


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Glass & Goldberg
22917 Burbank Blvd.
Woodland Hills, CA 91367-4203 
Phone: (818) 888-2220
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