Spencer Featured in Portland Business Journal’s ‘Party of Four’ Column About Overlooked Liability Issues
Lane Powell Shareholder Cliff Spencer was featured in the August 19 issue of Portland Business Journal in the “Party of Four” Q&A column. Cliff answered the question “What liability issues do businesses often overlook?” He pointed out the potential liability of latent default provisions in loan documents.
Although a business may be diligently servicing the debt obligation, the loan may include a borrowing covenant that the borrower maintain a minimum value to debt ratio. If the value of the underlying real property has gone down, the current ratio may be below the ratio originally required by the lender and the business may be in breach of its loan covenants.