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Daniel T. Kane was recently quoted in The Daily Gazette’s recent article on confessions of judgment against startup and small businesses. Here’s an excerpt:
A local contractor was on the hook for $530 a day — a day!
He had negotiated a so-called merchant cash advance that gave quick access to money, but with a steep daily repayment schedule. He also was subject to fast recovery of the cash advance if he missed a payment because he had signed a “confession of judgment.”
You may have heard of this obscure legal document from the series of stories Bloomberg Businessweek did late last year under the heading “Sign Here to Lose Everything.”
The stories detailed small businesses being frozen out of their bank accounts after their confessions of judgment were filed in court, sometimes going belly-up as a result.
New York has seen a rash of such filings from around the country of late. According to the stories, cash-advance companies have secured 25,000 judgments in New York since 2012, most in the past two years.
The contractor’s confession of judgment was among a dozen I counted in one state Supreme Court in just the first seven days of January. Some of the businesses hailed from New York; others were in Texas, California and Iowa.
To read the full article by Marlene Kennedy, please visit: https://dailygazette.com/article/2019/01/31/kennedy-use-of-cash-advances-snares-some-small-businesses