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Clifford Chance

Clifford Chance

Briefings

Good News for the Loan Market: SDNY Distinguishes Syndicated Loans from Securities

July 8, 2020

In Kirschner v. JP Morgan Chase Bank, N.A., Judge Gardephe of the Southern District of New York dismissed a complaint that included state securities law claims based on allegations that interests in a syndicated term loan to a corporate borrower constitute securities. In dismissing the complaint, Judge Gardephe applied a four-factor test adopted by the U.S. Supreme Court in Reves v. Ernst & Young to determine that interests in a syndicated term loan did not constitute securities. This briefing discusses the analysis of the Reves factors in the Kirschner case and explores the extent to which this ruling provides guidance to market participants.

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