Posts Tagged ‘borrower’

Beware of the Lending for Net Payroll

Monday, February 8th, 2010

When a borrower is in financial difficulty and having trouble making payroll, lenders should be warned not to advance a borrower only enough funds for the borrower to cover payroll net of taxes.  Even if a bank has not directed the borrower to ignore paying payroll taxes, federal law indicates that a bank could be held liable for those payroll taxes not paid by the borrower in this situation.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

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What is Marshalling?

Friday, August 28th, 2009

Some of you may have heard your attorney talk about the “equitable doctrine of marshalling.”  This doctrine is sometimes used when a senior creditor has a lien that covers two separate funds owned by a borrower.  If a junior creditor has recourse as to only one of those funds, the senior creditor may be required to exhaust the fund that is not available to the junior creditor before going after the other fund. (more…)

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