BNA BOOKS’ “American Factoring Law” Provides In-depth Analysis of This Alternative Source of Business Capital

Arlington, Va., September 2011—BNA Books, a division of specialized news and information publisher BNA, announced today the publication of the 2011 Supplementto American Factoring Law, the first comprehensive work written in America on factoring—the practice of buying business receivables at a discount as a way to provide working capital for the seller.

American Factoring Law provides a detailed analysis of the legal and business issues of factors and factoring transactions that is unparalleled in scope. Exploring hundreds of cases involving factors and those who deal with them, this book is a must-have for attorneys, factors, their clients, bankers, accountants, judges, and businesspersons who sell or purchase goods or services. It offers a thorough history of factoring, the details of factoring contracts and relationships, and an in-depth understanding of the latest developments involving American factors and factoring law. This treatise delves into all major topics, including:

• When a sale constitutes a “true sale” of the accounts to the factor, and when it does not
• The nature and treatment of a factor’s “advances” to its client
• The timing and character of a factor’s charge-back of purchased accounts to the client, and distinctions between charge-backs rooted in “quality” recourse from those rooted in “credit” recourse
• Factoring of accounts without recourse, as compared to the factoring of accounts on a partial nonrecourse, partial recourse, split risk, or full recourse basis
• Accounting for factoring transactions under GAAP, from both the factor-side and the client-side, with illustrations from SEC filings, and including coverage of the effects of a new amendment to the Statement of Financial Accounting Standards (eff. 2010)
• Issues that arise when a factor’s client goes bankrupt
• Differences between full guarantees, limited guarantees, and validity guarantees taken by factors, and the impact on a “true sale” analysis
• Relationships between factors and their funding sources, participation agreements among factors, and relationships between factors and lenders who provide rediscounting credit lines

    The 2011 Supplement includes new and updated material of significant interest to factors, their clients, and those who represent them, including:

• Discussion of Amcor, Inc. v. CIT Group/Commercial Services, Inc., pending in U.S. District Court in New York, tried in September 2010, which, once decided, will provide further guidance on the chargeback of disputed accounts as well as on an old-line factor’s assumed credit risk in respect of undisputed accounts purchased with credit-approval
• Analysis of Nickey Gregory Co. v. AgriCap, LLC, a 2010 decision by the United States Court of Appeals for the Fourth Circuit which re-characterized a factoring transaction as a secured borrowing rather than a “true sale” of accounts
• A review of recent cases where legal fees have been sought by, and in some cases awarded to, prevailing factors in commercial litigation
• The rights of a factor to set-off, without prior judicial approval, when the factor receives a garnishment lien in respect of a judgment owed by its client
• How to handle subordinations and U.C.C. filings when a factor sells participation interests in purchased accounts.

David B. Tatge, David Flaxman, and Jeremy B. Tatge are the authors of the main volume and the new supplement. Mr. D. Tatge is a shareholder of Epstein Becker & Green, P.C., a national law firm with more than 325 attorneys, practicing in the Washington, DC office. Mr. Flaxman is general counsel of Rosenthal & Rosenthal, Inc., commercial old-line factors in New York City, founded in 1938, with a 2008 factoring volume exceeding $4.6 billion. Mr. J. Tatge is a customer service representative in the Boston office of Brown Brothers Harriman & Co., in its Global Custody business group. Brown Brothers is the oldest and largest private partnership bank in the United States.

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