"Are Hedge Funds “Financial Institutions”? – An analysis of Meridian Sunrise Village, LLC v. NB Distressed Debt Investment Fund Ltd." by Paul Haskel

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April 16, 2014

In a recent decision that has captured the attention of the U.S. secondary loan market, the U.S. District Court for the Western District of Washington starkly concluded that hedge funds “that acquire distressed debt and engage in predatory lending” were not “financial institutions” and therefore are not eligible buyers of loans under the relevant loan agreement. For investment funds that regularly purchase loans on the secondary market, this rare decision that interprets the term “financial institution” in the context of secondary loan transfers appears to be of great concern.

In this memorandum, Richards Kibbe & Orbe LLP partner Paul B. Haskel discusses the Meridian decision and assess its level of significance to the loan market.

Please click here to read the memorandum.