WebCredenza 2024 Equipment leases: Drafting and UCC Article 2A issues

Many companies lease rather than buy computers and servers, company cars and other capital equipment. These leases are governed by UCC Article 2A, an intricate set of provisions governing their validity, treatment, and enforcement. If the lease is not properly drafted to comply with the UCC, it risks being re-characterized as a sale or a security interest, which gives rise to substantially adverse financial and tax consequences. This program will also provide you with a practical guide to reviewing equipment leases, including spotting red flags and avoiding recharacterization.

• Types of equipment leases – “true” leases, synthetic leases, “lease to own” arrangements, and more.
• Spotting red flags of financeable leases – and how to ensure UCC 2A compliance.
• Rights and obligations of the parties – manufacturer, lessor and lessee – and remedies for breach.
• Circumstances leading to re-characterization of a “true lease” as a sale or financing.
• Adverse financial, tax and practical ramifications of lease re-characterization.

Opinions and positions stated by presenters of MoBarCLE programs are those of the presenters and not necessarily those of The Missouri Bar. This program is intended as information for lawyers in Missouri, in conjunction with other research they deem necessary, in the exercise of their independent judgment.