Typical finance disputes
Finance litigation often involves defaulted loans and enforcement against collateral, claims on personal or corporate guaranties, disputes among lenders under intercreditor agreements, and borrower claims that a lender acted in bad faith or broke a funding commitment. Many commercial loan documents select New York law and New York courts, and New York courts generally enforce the terms sophisticated parties agreed to, including broad waivers of defenses in guaranties. Lenders can use an expedited procedure for instruments calling for payment of money only, which can move a case to judgment faster than an ordinary lawsuit. Syndicated loan disputes and liability management transactions have produced their own body of litigation among lenders. The type of dispute shapes the defenses and the speed.
Documents and notices to assemble
Gather the loan agreement, promissory note, security agreements, guaranties, amendments, and forbearance agreements, along with every default notice and reservation of rights letter exchanged. Payment histories and the lender's calculation of what is owed sometimes contain errors or disputed charges. Communications about waivers, extensions, or informal accommodations matter, though many loan documents state that only written amendments count. If collateral is being sold, keep the notices of sale and records of how the sale was conducted, since its commercial reasonableness can be challenged. Borrowers should not move assets in response to a default without advice, because that can create new problems.
Early decisions in a finance dispute
The first thing to establish is where the dispute stands: before default, after a notice, in forbearance, or already in court. For borrowers and guarantors, we evaluate whether there are defenses or counterclaims and whether a negotiated workout, refinancing, or restructuring is realistic. For lenders, we assess the collateral, the guarantors' assets, and the most direct lawful route to recovery. Bankruptcy may change the landscape, so we discuss how a filing by the borrower would affect each side. Timing matters in finance litigation, and the right first step depends on who has leverage at that moment.
