Sale v. Lease

Anybody who teaches Article 2A as part of a basic Sales course knows that what differentiates a “true lease” from a “disguised sale” is one of those questions that defies easy answers.  Increasing transaction complexity and increasingly clever lawyers (we’re apparently doing a good job with our students!) aren’t making things easier.

Turns out the question also has significant importance in bankruptcy law.   David A. Hatch and Mark Douglas of Jones Day’s Los Angeles office explore Judge Frank Easterbrook’s (left) opinion for the court in United Airlines, Inc. v. HSBC Bank USA, N.A., 416 F.3d 609 (7th Cir. 2005), in When is a Lease Not a Lease? Seventh Circuit Adopts "Substance Over" Form Test for True Lease Determination.
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