New York Court of Appeals Roundup: ‘Worthy’ Clarifies Rights of Secured Creditors Under UCC
12.21.22
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In their column in the New York Law Journal, Litigation Partners Bill Russell and Linton Mann III discuss Worthy Lending v. New Style Contactors. In its decision, the Court held that the holder of a presently exercisable security interest in a debtor’s receivables is included within the ambit of an “assignee” entitled under UCC 9-406 to receive payments directly from an account debtor after providing the account debtor with notice of the assignment. The Court found that, in New York, creditors who are granted the right by their debtors to demand payment directly from those debtors’ account debtors may enforce that right against the account debtor pursuant to the New York Uniform Commercial Code notwithstanding any claimed dispute between the debtor and secured creditor.
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