Commercial Paper

COMMERCIAL PAPER

In re Southern Pacific Funding Corporation, 268 F.3d 712 (9th Cir. 2001)

Subordination clause in indenture agreement that preserved certain secured creditors’

rights both pre- and post- bankruptcy did not violate § 365(e)(1) of the bankruptcy code.

In re Crystal Properties, Ltd., L.P., 268 F.3d 743 (9th Cir. 2001)

“Without notice or demand” provision in default interest clause of loan agreement did not

alter requirement that holder of defaulted loan must carry out some affirmative act to exercise its

option to accelerate the loan and invoke the default interest clause. Default interest rate did not

come into effect until holder of the note first took affirmative action to put the debtor on notice

that it intended to exercise its option to accelerate, and thus invoke the default rate.

In re Bartoni-Corsi Produce, Inc., 130 F.3d 857 (9th Cir. 1997)

Under California law (3-419, 3-420) a bank does not convert a corporate bankruptcy

debtor’s check that lacks a payee endorsement by making a board-authorized deposit into the

transferee’s account

In re Lee, 179 B.R. 149 (9th Cir. B.A.P. 1995) aff’d 108 F.3d 239 (9th Cir. 1997)

Cashier’s check is transferred as of date of delivery, not date it’s honored.

In re Nusor, 123 B.R. 55 (9th Cir. B.A.P. 1991)

What constitutes negotiable instrument; holder in due course