Results 1 to 18 of 18
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04-03-2017, 09:01 AM #1
New york case is a win for the merchant cash advance industry
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04-03-2017, 09:08 AM #2
that is a win for splits, but a lot of other contracts are making it look more like a loan rather than an advance on receivables. I wonder how one of those deals would have done in the case.
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04-03-2017, 09:24 AM #3
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04-03-2017, 10:01 AM #4
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04-03-2017, 11:17 AM #5
This is a big win, I am curious to see how this effects the proposed bills that were being talked about in Albany. Will this make legislators more or less likely to try and pass state level regulation.
John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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04-03-2017, 11:34 AM #6
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- Dec 2013
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The Trump said we will be tired of winning ...I'm in need of a nap!
Last edited by mcaguru; 04-03-2017 at 11:37 AM.
Marcus Clapman | Business Development | Cresthill Capital
(High Commissions Payout Group)
——————————————————————————
Tel: 917-521-6528 | Fax: 212.671.1473
Email: bizdev@cresthillcapital.com
http://www.cresthillcapital.com
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04-03-2017, 11:48 AM #7
well there is a very fine line, but good for them! glad to see a win for the home team... need to make sure your agreements are clearly written!
The court cited extensive New York precedent for the position that, in order to constitute a loan, the principal sum given to one party must be absolutely repayable and not contingent upon future events. The court then quoted provisions from the agreement stating that (i) IBIS would receive a percentage of Four Paws’ daily sales, (ii) the transaction was not a loan, and (iii) the agreement would be governed by the Uniform Commercial Code (which does not govern loans). According to the court, these provisions indicated that the transaction was not a loan and not subject to usury.
The court also addressed Four Paws’ contention that the agreement established a “set and finite fixed daily payment” that could be used to calculate a usurious interest rate. In this regard, the court noted that it could not find such a provision, but, even if one did exist, the defendants' usury defense would still fail because “the Agreement provided no liability in the event that the seller’s business failed because it could not generate sufficient revenue to continue operating [and thus make payments].” The court also noted that Four Paws was not required to make any payments unrelated to revenue to cover deficiencies, and the agreement lacked a specific end date upon which all amounts owed by Four Paws would become due.
Court Rules MCA Arrangement Is a Loan Under New York's Usury Laws
The risk of loss is to be distinguished from the risk of nonpayment that is inherent in every loan and that may only be compensated for by statutory interest; the risk of loss by the death or insolvency of the borrower is the risk that every person runs who lends money on personal security only (72 N.Y. Jur 2d Interest and Usury, §87).
Although the defendant’s witness testified that by purchasing future receivables RDN Construction accepted business risks besides the normal risks of repayment common to a loan, the court discounted this testimony on the basis that “[m]erely telling the Court that risk is contemplated under the terms of the Agreement is inadequate, especially where, as here, the Agreement is illegible, with excessively small print.” In particular, the court noted the agreement did not specify that sales of receivables to the defendant were without recourse to the seller/plaintiff. In the absence of such language, the court determined that the plaintiff was absolutely obligated to repay and so the arrangement amounted to a loan.Anthony Diamond
Underwriter
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04-03-2017, 12:03 PM #8
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- Dec 2013
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Marcus Clapman | Business Development | Cresthill Capital
(High Commissions Payout Group)
——————————————————————————
Tel: 917-521-6528 | Fax: 212.671.1473
Email: bizdev@cresthillcapital.com
http://www.cresthillcapital.com
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04-03-2017, 12:30 PM #9
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04-03-2017, 01:11 PM #10
OOPS! I missed this one... look's like we're 2-1, but then again the odds of winning come down to whether or not the agreement is worded correctly!
Merchant Cash Advance Definitely NOT a Loan, New York Judge Rules
And I really do wonder what impact these court rulings are going to have indefinitely on state legislation for New York-based lenders, although I've heard that may temporarily be a win for us as well.Anthony Diamond
Underwriter
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04-03-2017, 01:21 PM #11
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04-03-2017, 01:26 PM #12
There are hundreds of MCA litigations pending at any given moment. It's only news if an MCA company loses or in a reported decision the judge took the time to fully articulate interesting applications of the law.
The score is definitely not 1-1 or 2-1 lol.
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04-03-2017, 01:30 PM #13
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- Apr 2013
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- 117
Sean-Do you have a link for the Pearl case against Creditor's Relief?
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04-03-2017, 01:33 PM #14
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04-03-2017, 02:01 PM #15
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- Aug 2016
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- 827
When these cases happen is it a right away scam that they just do not want to pay or is it in counter to business going down and they can not pay?
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04-03-2017, 02:30 PM #16
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04-03-2017, 03:08 PM #17
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- Oct 2016
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If it happens in the first week, I just assume scam. Probably coached-up, too.
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04-03-2017, 07:07 PM #18
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- Mar 2016
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