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Topic: Recourse note

In the News (Wed 15 Feb 12)

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	Article 22 reporting form: Convention No. 102 - International Labour Standards (Site not responding. Last check: 2007-10-25)
		Please also state whether recourse is had to the last sentence of subparagraph (d) of Article 32, according to which, in the case of the widow, the right to benefit may be made conditional on her being presumed to be incapable of self-support; if so, please specify the rules.
		Please state whether recourse is had to the last sentence of paragraph 1 of this Article, according to which, in the case of the widow, the right to benefit may be made conditional on her being presumed to be incapable of self-support ; if so, please specify the rules governing the right to benefit.
		If recourse is had to paragraphs 1 and 2 of this Article the benefit the amount of which is shown under Article 62 should be the benefit granted during the time basis to a standard beneficiary whose breadwinner has completed 15 years of contribution or employment or ten years of residence.
	www.ilo.org /public/english/standards/norm/sources/reptforms/html/22e102.htm (12773 words)

	OSCN Found Document:KUYKENDALL v. CALDWELL
		The plaintiff alleged that, if the words "without recourse" were written in the contract, the same was done after it had been signed by Vennum, Bougher, and Kuykendall and without the knowledge or consent of the defendant in error.
		The principal point in controversy at the trial of the cause was whether the contract between the plaintiff and defendant provided for the plaintiff in error's indorsement of the note to be delivered, or whether the contract provided for plaintiff in error's indorsement "without recourse" on the note.
		"Notes to be Filed--Admissible as Evidence.--The shorthand reporter in any court of record shall file his notes taken in any case with the clerk of the court in which the cause was tried.
	www.oscn.net /applications/oscn/DeliverDocument.asp?citeID=28750 (656 words)

	[No title]
		The notes were included in the bases for depreciation of the videotapes and for investment tax credits, thereby creating the opportunity for the partnerships to return more in tax savings to the limited partners than the partners contributed in cash.
		Although the notes purported to represent recourse obligations, i.e., obligations for which the partners would be personally liable if the partnership did not meet them, the Tax Court correctly found (id. at 56) that it was doubtful that the parties ever intended to enforce the notes in accordance with their terms.
		The note obligations were inflated, the tapes were producing no revenues for the partnerships, and, although the partnerships had fallen in arrears, Scheer brought no action to collect the amounts in default.
	www.usdoj.gov /osg/briefs/1988/sg880127.txt (2500 words)

	7206 Instructions to Jury 3 p4
		The court held, however, that the recourse note transaction had economic substance because Rice's payment on the note was a "purchase of something of economic value.
		Rice's transaction was unusual because the interest payments on the recourse note were separable from the interest payments and depreciation that would have created the principal tax benefits of the transaction.
		In Cheek the Supreme Court noted that "[t]he proliferation of statutes and regulations has sometimes made it difficult for the average citizen to know and comprehend the extent of the duties and obligations imposed by the tax laws." [91-1 USTC ¶50,012 ], 111 S.Ct. at 609.
	www.irstaxattorney.com /Fraud-Statutes/7206_Instructions_to_Jury_3_p4.html (9131 words)

	Promissory Note Forms - Download Promissory Notes - State Specific
		Cognovit Note: A cognovit note is a note in which the maker acknowledges the debt and authorizes the entry of judgment against him or her without notice or a hearing: a note containing a confession of judgment.
		Recourse Note: A recourse note is a note where the default may result in loss of collateral and also personal suit and judgment.
		Renewal Note: A renewal note is a note that renews a previous note due date.
	www.uslegalforms.com /promissorynote.htm (393 words)

	note brokers and note investors in discounted mortgages and seller financing
		If the agreement of assignment of the note and the endorsement of the note is silent, the note is assumed to be sold with recourse.
		The note should be endorsed as follows: PAY TO THE ORDER OF (your name and the other non-sellers) then signed and dated by all the current owners.
		If the note is already in default you are unlikely to be recognized as the holder in due course.
	www.mortgage-investments.com /mortgage_and_deed_of_trust_note_brokers/note_buying_frequently_asked_legal_questions.htm (681 words)

	Partnership Taxation
		A partner's share of recourse liabilities equals the portion, if any, of the economic risk of loss for such liability that is borne by that partner (or persons related to such partner) if the liability is not discharged by the partnership.
		A recourse liability must be allocated to a partner to the extent that a person related to the partner bears the risk of loss.
		In addition, recourse debt that exists at the time of conversion of partnership to an LLC under state law may be treated as recourse debt for §752 purposes following the conversion if state law provides for continuation of the members' personal liability for the debt in the successor entity.
	taxtaxtax.com /pship/study/lect3.htm (5807 words)

	[No title]
		However, Paragraph 17 also provides that "this Note may not be transferred or assigned by Noteholder without the prior written consent of the Maker [Winthrop Southeast]." The evidence was uncontested that Winthrop Southeast did not give prior written consent to the assignment of the Note from the Loan Trust to NLI.
		A promissory note is rendered conditional when it provides that the borrower will not be liable personally for payment in the event of default and limits recourse for payment to certain tangible property or other collateral.
		See id. Thus, since the Note was not a negotiable instrument, neither NLI nor the Loan Trust could assert any right that a holder in due course may have had to rely on in the statutory provision at issue.
	www.courts.state.va.us /txtops/1982474.txt (1926 words)

	What Every Mortgage Investor Should Know
		Possession of the original promissory note is absolutely essential to any investor, as without the original note it is simply impossible to rely on any guarantee being made by the party from whom you may be purchasing the note that the note has not been sold or pledged for security purposes previously.
		Endorsing the note is typically done by having the transferring party (seller of the note) writing “pay to the order of (the name of the receiving party---buyer of the note)” on the reverse side of the original note, then signing his name as it appears in the note.
		What recourse means is that the person endorsing the note has made a passive guarantee of the terms of the note and is in the line of liability for performance of the terms of the note.
	www.advancedinvestmentcorp.com /WEMISK4web.htm (14010 words)

	FredCook & Co. Ma6 6, 1996, Alert Letter
		The note has a fixed term, with interest that is either (1) at a fixed rate and prepayable or (2) at a variable rate.
		Even if the ability to exercise the option by use of a non-recourse note was added to the option after grant, it would not cause a new measurement date if the term of the note did not extend beyond the original option term.
		The EITF further concluded that if (1) interest accrued on the non-recourse note is itself non-recourse (i.e., secured by stock itself), or (2) any interest paid is refundable if the stock is returned in settlement of the note, then the interest due is considered part of the option exercise price(Footnote 1).
	www.fwcook.com /960506.html (899 words)

	TH&T \| Publications \| Article Search Results (Site not responding. Last check: 2007-10-25)
		Thus, in order to avoid variable accounting, the interest rate on the loan may not be fixed on the date of grant because it would be impossible to conclude on the grant date that at the time of exercise, the stated rate will be the market rate.
		As a result, options providing for exercise with full recourse notes must provide at the grant date that the interest rate on the date of exercise will be the market rate at that later time.
		It is important to note that the Applicable Federal Rate (AFR) published by the IRS will not necessarily be deemed to be a market rate for financial accounting purposes.
	www.tht.com /Pubs/SearchMatchPub.asp?ArticleID=718 (363 words)

	54 Wn. App. 456, BAXTER v. STEVENS
		A discounting and assignment with recourse of a negotiable promissory note and security agreement for nonbusiness purposes in exchange for cash constitutes a loan for purposes of the usury statute, RCW 19.52.
		Baxter claims that the discounting of the note and the fact that he endorsed it with recourse, that is, with a guaranty that he would make the payments in the event that Ham did not, combine to make the transaction a loan as a matter of law, citing RCW 19.52.010(1).
		There a note sold to a finance company was held not to be a loan, but it does not appear that the seller (Greenwell) had given a guaranty or indorsement such as that given by Baxter here, which is specifically required under RCW 19.52.010(1) for the transaction to be considered a loan.
	www.mrsc.org /mc/courts/appellate/054wnapp/054wnapp0456.htm (1463 words)

	Interwoven Investors
		Note that nonaffiliates who transfer to one another can cumulate or "tack" their holding periods.
		These restrictions do not apply, however, to notes given to third parties (i.e., not the sellers of the shares) that are not affiliates of the company in return for funds allowing the purchaser to pay cash for the shares.
		5 A "full recourse" promissory note means that the borrower has personal liability for full repayment of the note; the lender is not limited to recovering the purchased shares in the event the borrower defaults.
	www.interwoven.com /investors/restricted/411.html (1719 words)

	Fidelity Employer Services (Site not responding. Last check: 2007-10-25)
		The Note was payable 10 years later at maturity, and the interest rate on the Note was not less than the appropriate applicable Federal rate (AFR) on the date the note was issued.
		The interest rate on the Note was not less than the appropriate AFR on the date the Note was modified.
		Employers that accept notes from employees may want to discuss the potential tax ramifications of modifications to such notes with their tax advisors before proceeding.
	www.fidelity.com /workplace/PublicSites/MainWrapper/0,,CSN2641_PSN2641_SSN2645_PID17895,00.html (479 words)

	Business Note Purchasers
		A business note is formulated when a business owner sells a business under a contract and takes back a note in lieu of cash; thereby, creating seller financing.
		In order for a funding source to find a business note enticing to purchase, the new owner of the business is required to have some cash equity paid into the purchase of the business.
		Although not necessary to create a business note, the inclusion of real estate and a reasonable interest rate must be a part of the note structure in order for Sovereign Mortgage & Funding Group to have the needed valuation to fund the purchase.
	www.sovereignfunding.com /business-note-purchases.html (318 words)

	7206 Instructions to Jury 2 p5
		According to the SMFA offering memorandum, the promissory notes were part recourse and part non-recourse--i.e., the investor was personally liable for the recourse portion of the note (approximately one-third of the total note amount), while the non-recourse portion was secured only by the sale of the artwork.
		As to the first requirement, that the declarant and the defendant were members of a conspiracy, we initially note that Rule 801(d)(2)(e) applies not only to conspiracies but also to joint ventures, and that a charge of criminal conspiracy is not required to invoke the evidentiary rule.
		In each of these cases, the court noted that the defendants were involved in the creation, organization, and operation of the tax shelters (limited partnerships) at issue.
	www.irstaxattorney.com /Fraud-Statutes/7206_Instructions_to_Jury_2_p5.html (9267 words)

	Sample Contracts - Full Recourse Promissory Note - Tier Technologies Inc. and James R. Weaver - Competitive ...
		Maker accepts and agrees that this Note is a full recourse Note and that Holder may exercise any and all remedies available to it under law.
		In the event of any action or legal proceeding concerning this Note or the enforcement of any rights hereunder, Holder shall be entitled to, in addition to any other relief to which Holder may be entitled, all legal and court costs and expenses, including reasonable attorneys' fees, incurred by Holder in connection with such action.
		Holder shall furnish to Maker reasonable evidence that the Note was destroyed, lost or stolen and any security or indemnity that may be reasonably required by Maker in connection with the replacement of this Note.
	contracts.onecle.com /tier/weaver.prom.2000.09.18.shtml (633 words)

	Legal Database (Site not responding. Last check: 2007-10-25)
		Plaintiff held the second note, which was subordinate to the first, and which provided for payment of $55,000 in installments.
		A clause in the note held that if any part of the property was sold or transferred by title borrower, or refinanced, then all sums would become immediately due.
		The court held that acceleration of an installment note is a harsh remedy, and a right to accelerate, given in a contract, should be clear and unequivocal.
	www.icsc.org /law/cases/3bcase17.html (292 words)

	Technical Advice Memorandum 200044004 - NMHC.org
		Recourse liabilities are generally includible in basis because they represent a fixed, unconditional obligation to pay, with interest, a specific sum of money.
		However, the mere fact that a note is recourse on its face is not determinative.5 For example, an obligation, whether recourse or nonrecourse, will not be treated as a true debt where payment, according to its terms, is too contingent, or repayment is otherwise unlikely.
		In such situations, not only are the payments on a nonrecourse note usually fixed in amount, but the obligation to make the payments is not, by its terms, confined to the income produced, and the underlying property has a potential value apart from the income stream which it is expected to generate.
	www.nmhc.org /Content/ServeContent.cfm?isPrinterFriendly=1&ContentItemID=1377 (3470 words)

	USB EAOC Opinion 97-11
		A promissory note would be executed under which an interest rate would be calculated on the basis of the risk of loss of the case and the fact that Attorney's portion of the recovery would be the only source of repayment of the funds.
		The fact that Lender may agree not to be involved in decisions involving the case or that Client may agree in writing and in advance does not save the proposed arrangement, as Rule 5.4(a) makes no exception for such cases.
		The note was endorsed to the bank "without recourse," and the attorney had the right to repurchase the note prior to the bank's instituting any legal action on it.
	www.utahbar.org /rules_ops_pols/ethics_opinions/op_97_11.html (1224 words)

	Debt and Property (Site not responding. Last check: 2007-10-25)
		Crane case rule states that purchase debt is included in the tax basis of an acquired property and in the proceeds received when debt relief occurs upon asset disposition.
		Relief from recourse debt is included in the amount realized.
		Property was transferred to lender and borrower was released from liability.
	www.law.uh.edu /faculty/wstreng/FederalIncomeTax/13.html (800 words)

	Smith Anderson: Resources »» Publications
		This defeats the tax purpose of the note, since the difference between the amount of the note when it is repaid and the value of the stock will be ordinary income (wages) to the employee.
		Regardless of whether a note is recourse or nonrecourse, if the stock price goes down, the employee will still owe the company the amount of the note plus interest.
		It is possible to draw everyone’s attention to this forgiveness-of-indebtedness income problem in advance – to provide in the note, for example, that the employee agrees he or she will recognize income equal to the indebtedness forgiven – but that does not fix the problem.
	www.smithlaw.com /page.cfm?pn=re&spn=publications&pubid=57 (1544 words)

	Note Sale, Sale of Note (Site not responding. Last check: 2007-10-25)
		The endorsement is usually written on the back of the note or on a separate piece of paper called an "allonge" that is permanently attached to the original note and becomes part of it.
		A note sold "without recourse" means that you do not have to pay if payments stop.
		If you intend to get out of the picture entirely, you must sign the endorsement with the two words, "without recourse." If you fail to use the words "without recourse" in the endorsement, you are guaranteeing it and you will be liable to pay if the payor stops paying.
	www.wallstreetbrokers.com /recourse.htm (236 words)

	Texas Promissory Note Forms - Free FAQ (Site not responding. Last check: 2007-10-25)
		A cognovit note is a note in which the maker acknowledges the debt and authorizes the entry of judgment against him or her without notice or a hearing : a note containing a confession of judgment.
		A recourse note is a note where the default may result in loss of collateral and also personal suit and judgment.
		An unsecured note is a note that is not secured by any collateral but only the promise to pay.
	www.uslegalforms.com /texas-promissory-note-forms.htm (482 words)

	Market Wire News (Site not responding. Last check: 2007-10-25)
		Note: If using a hands-free phone, lift the handset and press one to ask a question.
		Refer to Note 2 of the unaudited consolidated financial statements for the three months ended March 31, 2006 for the preliminary purchase price allocation.
		The impact of prior period regulatory decisions relating to prior reporting periods are recorded when the effect of such decisions are known, without adjustment to the financial statements of prior periods.
	www.marketwire.com /mw/release_printer_friendly?release_id=124338&category= (10158 words)

	Gerson Law
		In effect, the election to foreclose non-judicially on commercial property pledged as collateral, pursuant to terms of a deed of trust, converts a recourse note into a non-recourse note for most claims.
		Note also that loans insured by the Federal Housing Administration are not subject to California's "bad faith waste" rule.
		If the idea behind the language in the note is to cut off certain surety defenses, the language should be superfluous because the surety defenses should be explicitly waived.
	www.gersonlaw.com /non_recorse.html (2042 words)

	[No title]
		If a non-recourse note is delivered, the purchaser should consider the tax consequences to him or her of such a purchase.
		The laws of the state of incorporation should be reviewed to determine whether delivery of a promissory note is considered adequate consideration for the purchase of stock.
		Under the laws of the State of Delaware, an issuer may issue stock in consideration of receipt of the purchaser’s promissory note in excess of the par value.
	www.ustyleit.com /Stock_Purchase_Agreement.doc (802 words)

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