Equipment Lease and Finance Association Workgroup Estabished to Assist Industry in Understanding Provisions of California Senate Bill 1235
I am happy to report that the Equipment Lease and Finance Association has created a workgroup that will collaborate in drafting information to assist the industry in understanding provisions of newly enacted
California Senate Bill 1235
and Best Practices in anticipation of regulations yet to be released. Two goals of this Department of Business Oversight workgroup are to make sure any and all implementing regulations are consistent with the legislature's and sponsor's intent and secondly, to produce guidance in t
Practices relating to bright lines DBO envisions.
takes effect Jan. 1, 2019; however, the DBO is required to adopt regulations addressing details such as the methods of calculation, the format, the time and the manner of the new disclosures. The DBO will specify the date by which finance companies are required to comply. I t is unlikely that compliance with the new law will be required before well into 2019.
GLASS & GOLDBERG, ALC
22917 Burbank Blvd.
Woodland Hills, CA 91367-4203.
(Selected for Inclusion in 2019 SuperLawyers Magazine-10th consecutive year)
Under legislation signed September 30, 2018, by Governor Brown, California will become the first jurisdiction in the United States to provide small business owners with the same protections that Truth-in-Lending laws have provided consumers for more than fifty years.
Senate Bill 1235, introduced and sponsored by Senator Steve Glazer, D-Orinda, will require lenders to provide certain disclosures with specificity, clarity, and consistency to small business owners at those instances that they offer them financing and close a transaction.
As reported here recently, SB 1235 has been signed into law by Governor Brown. The legislature believes this new law will protect small business owners and empower more small businesses to succeed. Many of the bill's supporters, including small business owners, believe the passing of this bill was critical not only to the economic health of California but to the entire nation as California becomes the first state to enact truth-in-lending laws that protect small business owners.
The Seventh Circuit Court of Appeals' recent decision in Illinois Department of Revenue v. Hanmi Bank challenges the prevailing view that as a matter of law an underwater senior creditor always could retain the entire proceeds of a free-and-clear sale with junior creditors receiving nothing. The Seventh Circuit's decision may allow junior creditors in future bankruptcy cases a recovery based on the theory that a free and clear sale under § 363 of the Bankruptcy Code (Title 11) creates a premium for those assets that a junior creditor may potentially be entitled to share.
In the case, In re Fagerdala USA-Lompoc, Inc., 891 F.3d 848 (9th Cir. 2018), the Ninth Circuit affirmed a creditor's ability to block a debtor's "cramdown" by purchasing junior debt to protect its own claim. The court reversed the bankruptcy court's decision to designate claims for bad faith pursuant to 11 U.S.C. § 1126(e). In doing so, the court thereby sanctioned the creditor's motive of purchasing claims to block the Chapter 11 plan for the purpose of protecting a pre-existing claim. Thus, Fagerdala illustrates that, in bankruptcy proceedings, at least in the Ninth Circuit, creditors may purchase claims to protect their economic interests.
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