This blog post compares the uses of liquefied natural gas (LNG) as a marine fuel with other options for complying with the more stringent sulfur emission requirements of the International Maritime Organization (IMO) beginning in 2020 and then discusses the
Asset Finance in Brief
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Bankruptcy Hypotheticals for Equipment Lessors to Consider
No equipment lessor wants to find itself a creditor of a lessee in a reorganization case under chapter 11 of the U.S. Bankruptcy Code (the Bankruptcy Code). However, when such a situation arises, a lessor is not without recourse –…
Republic Airways Holdings, Inc.: Liquidated damages under attack in U.S. Bankruptcy Court (again)
In a decision with sweeping consequences for equipment lessors, the bankruptcy court (SDNY) in Republic Airways held that a liquidated damages provision in a true lease is an unenforceable penalty if it provides for the unconditional transfer of residual value…
The Greek Civil Code visits the English High Court: Personal guarantees, defences and competing applicable laws
Whenever interrelated contracts apply, different laws, issues and defences may arise owing to the discrepancies between the applicable legal systems. In HSBC Bank PLC v. Pearl Corporation SA and Ors, the High Court had to consider Greek law defences to…
California’s new commercial financing disclosures
Newly-effective California law requires a non-bank provider of commercial financing to present its financing recipient with certain consumer lending-style cost disclosures at the time when making an offer of commercial financing, and to obtain the recipient’s signature on the required…
UK insolvency shake-up
On August 26, 2018, the UK government issued its response to its consultation on insolvency and corporate governance. The consultation sought views on how the risk of company failure could be reduced by improving the corporate governance and insolvency framework.…
TRAC leases as disguised financing transactions: recent developments and a reminder about TRAC neutral statutes
For many decades, companies in the business of leasing “over-the-road” vehicles such as trucks, tractors, and trailers, have used terminal rental adjustment clause (TRAC) leases to maximize the value they can provide to their customers. Traditionally speaking, TRAC leases combine…
Financing of Scrubber Units and Emissions Technology
As part of a concerted move by the shipping industry community to reduce the environmental impact of shipping, the International Maritime Organization (IMO) has introduced regulations to reduce sulphur oxides emissions. These regulations require ships operating outside designated emission control…
The alternative path to damages in a true lease if liquidated damages are unenforceable (or Lessees, be careful what you wish for!)
Liquidated damages in true leases: applicable law
Uniform Commercial Code Section 2-A-504 is the applicable law regarding liquidated damages in a lease agreement. Section 2-A-504(1) provides that: “Damages payable by either party for default . . . including . .…
The Financing of Green Shipping
The shipping industry is a major contributor to harmful air pollution, generating an estimated 2.5 percent of the world’s greenhouse gas emissions. In a global market, the maritime transport sector is depended on as a reliable and cost-effective means of…