The Daniel Patrick Moynihan U.S. Courthouse in the Southern District of New York, at 500 Pearl St. Photo: Ryland West/ALM
Once upon a time, I lamented that The Worst Place To Litigate Merchant Cash Advance Disputes Is Out-of-State. Since last June, beginning with the issuance of the befuddling decision in Fleetwood Services v. Ram Capital Funding LLC, 2022 U.S. Dist. LEXIS 100837 (S.D.N.Y. June 6, 2022), the Southern District of New York has taken over the “worst place to litigate” title for these merchant cash advance (MCA) transactions. Indeed, some SDNY judges are developing a federal MCA legal doctrine that may be read to substantially deviate from New York state authorities.
New York Law
In MCA transactions, the funder purchases a percentage of future receivables from a merchant for a discount and receives regular remittances—usually a fixed daily or weekly amount as an estimate of the specified percentage of the merchant’s average receivables—until the full purchased amount is delivered from the merchant’s actual receivables.
