Louisiana Revised Statutes 9:3137.5 – True sales of receivables; not subject to recharacterization; simulation articles not applicable
Terms Used In Louisiana Revised Statutes 9:3137.5
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
- Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
A. All sales of receivables over exchanges subject to the scope of this Part as provided by La. Rev. Stat. 9:3137.4(A) shall conclusively result in consummated true sales for all purposes, and not be limited to a bankruptcy context, with the buyer acquiring all of the seller’s rights, title and interests in and to the traded receivables and the collection proceeds thereof, and with the seller retaining no vestiges of legal or equitable interest in the receivables sold.
B. As true sales, sales of receivables over exchanges located in this state shall not be subject to recharacterization as loans, extensions of credit, or other credit accommodations by the seller to the buyer, notwithstanding that the seller may be obligated to repurchase the receivable, or the buyer may otherwise have recourse against the seller if the receivable is not paid when due, and further notwithstanding that the seller may be entitled to receive a portion of the collection proceeds. Furthermore, sales of receivables over exchanges located in this state shall not be construed, under any circumstance, to be a simulated sale under the simulation articles of the Civil Code.
C.(1) The seller’s written agreement in the underlying documents that the seller absolutely, unconditionally, and irrevocably intends that sales of the seller’s receivables over an exchange located in this state result in true sales of such receivables for all purposes, shall be definitive and binding on the seller, and may not be subsequently disavowed or refuted by any of the following persons:
(a) The seller.
(b) The seller’s successors or assigns, or any person acquiring rights from or through the seller, including the buyer.
(c) Past and future owners, directors, officers, employees, agents, representatives and attorneys of the seller, or of its successors or assigns, or any person acquiring rights from or through the seller.
(d) The account debtor or any other person obligated to pay the receivable.
(e) All other third persons.
(2) Any person, including anyone listed in Paragraph (1) of this Subsection, attempting to recharacterize a sale of a receivable over an exchange located in this state as anything other than a true sale under Louisiana law, shall be personally liable and obligated by operation of law to reimburse the buyer and the buyer’s agents for attorney fees, court costs, arbitration costs, expert fees, and out-of-pocket expenses, including but not limited to travel expenses, expended in defense of the status of such sale as a true sale under Louisiana law.
Acts 2010, No. 958, §1, eff. July 6, 2010.