Food And Beverage Company Defaults On Asset Backed Loan

Case Overview

This case involves a commercial lending transaction between a food and beverage company and a major retail corporation. The food and beverage company sold various products large scale to the retail corporation for 6 years and had a $50 million dollar line of credit. In the final year, the food and beverage company defaulted on the loan and the lender opted to end the relationship. The food and beverage company found a new lender and negotiated an asset-backed line of credit. Several months before the loan was scheduled to close, the food and beverage company’s former comptroller claimed that the loan was based on fraud. The loan eventually failed and the food and beverage company went bankrupt.

Questions to the Security expert and their responses

What is your experience representing both lenders and borrowers in high-value asset-backed loans?

I worked in corporate, securities, and credit with a premier law firm prior to entering academia, where my work included advising both lenders and borrowers on a range of financings. This included commercial lending and working with a royalty securitization for a major entertainment company. I have also been engaged as a consultant on cases involving commercial lending and asset-backed securities.

About the expert

This expert has over 10 years of experience as an attorney, specializing in corporate and securities law. In addition to receiving his J.D., he also has a Ph.D. in Economics from UCLA. He has published on corporate governance and securities, and his research has been included in the Journal of Legal Studies, the American Law & Economics Review, and the law reviews of Chicago, Pennsylvania, and Georgetown. He currently serves as Professor for both a major university business school and law school.