Drafting Equipment Leases: UCC Article 2A Compliance, Minimizing Risk Through Key Provisions and Clarity

A live 90-minute CLE webinar with interactive Q&A


Wednesday, June 5, 2019

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, May 10, 2019

or call 1-800-926-7926

This CLE webinar will guide counsel in drafting, reviewing and negotiating equipment leases. The panel will discuss essential clauses to ensure compliance with UCC Article 2A, mitigate the risk of re-characterization as a sale or a security interest, and clarify the rights and obligations of the parties to the lease.

Description

Equipment leasing is increasingly commonplace as companies lease rather than buy the capital equipment essential to operating their businesses. Equipment leasing can grow a business without large out-of-pocket expenses because it allows the lessee to spread the cost out over the term of the lease. But equipment leases have become exceptionally complex over time, resembling financially engineered instruments as much as traditional leases.

When negotiating an equipment lease, the parties may have many related goals. For example, the lessor may want to structure the lease under state law (and associated federal bankruptcy law) to protect the equipment from rights and claims of the lessee's creditors, especially if the lessee files for bankruptcy. The lessor may also want tax ownership of the equipment for U.S. federal income tax purposes.

In structuring the lease, however, the parties often confuse equipment lease concepts and terminology used in state law, U.S. federal income tax law and accounting practice, which sometimes appear deceptively similar. Lessors and lessees that equate these concepts and use terminology interchangeably in their equipment leases risk jeopardizing the benefit of the agreement. The leases must comply with UCC Article 2A or risk financially disadvantaging the lessor or the lessee. If a lease is re-characterized as a sale or a security interest because of its terms, the lease's underlying economics change dramatically.

Listen as our veteran panel of both litigators and transactional attorneys provides practical guidance in drafting, reviewing and negotiating equipment leases to ensure compliance with UCC Article 2A, mitigate the risk of re-characterization as a sale or security interest, and clarify the rights and obligations of the parties to the lease. The panel will also highlight the 17 critical drafting issues essential to every equipment lease.

READ MORE

Outline

  1. Overview
  2. Examples of equipment leases
  3. Lessor and lessee business considerations
  4. Applicable law
  5. UCC true lease test
  6. Non-true leases under the UCC
  7. True leases vs. non-true leases
  8. Lease drafting considerations
    1. Equipment
    2. Term
    3. Rent
    4. Sales and use taxes
    5. Hours
    6. Insurance
    7. Place of installation
    8. Transportation costs
  9. Maintenance and repairs
    1. Ordinary wear and tear
    2. Warranties
  10. Default
    1. "Merger" or "integration" clause
    2. Governing law
    3. Dispute resolution
    4. Venue
    5. Attorney's fees and costs

Benefits

The panel will review these and other key issues:

  • What do recent court decisions say about when a lease is deemed a "true lease" as opposed to a lease that creates a security interest? What is the significance in bankruptcy?
  • What are best practices for ensuring UCC Article 2A compliance?
  • What are the key clauses for clarifying the rights, obligations and remedies of the parties, including the manufacturer?
  • What are differences between "true," synthetic, "lease to own" and other equipment leases?
  • Which lease terms and facts can lead to re-characterization of a "true lease" as a sale or financing?
  • What are the adverse financial, tax and practical consequences where a "lease" is instead a sale of the equipment?
  • How should bundled services and products be reflected in equipment leases?
  • What are common red flags and traps of financeable leases?
  • What are the 17 critical drafting issues essential to every equipment lease?

Faculty

Cohen, Mark
Mark Cohen, J.D., LL.M.

Atty

Mr. Cohen has 34 years of experience as a lawyer. His practice is focused on drafting and reviewing legal documents,...  |  Read More

Gross, Edward
Edward K. Gross

Shareholder
Vedder Price

Mr. Gross has over 25 years of experience representing bank-affiliated and large, independent equipment financing...  |  Read More

Dominic Liberatore
Dominic Liberatore

Deputy General Counsel
De Lage Landen Financial Services

Mr. Liberatore is the Deputy General Counsel for De Lage Landen Financial Services Inc., a global provider of leasing...  |  Read More

Live Webinar

Buy Live Webinar
Includes Early Discount Savings of $50 (through 05/10/19)

Live Webinar

$247

Buy Live Webinar & Recording
Includes special savings of $250 (through 05/10/19)

Live Webinar & Download

$344

Live Webinar & DVD

$344 + $19.45 S&H

Other Formats
— Anytime, Anywhere

Includes Early Discount Savings of $50 (through 05/10/19)

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

48 hours after event

$247

Download

48 hours after event

$247

DVD

10 business days after event

$247 + $19.45 S&H