Usury Argument in Merchant Cash Advance Suit Backfires HorriblyJune 25, 2018 | By: deBanked Staff
A New York Supreme Court judge in Erie County, New York has had enough with attorneys trying to argue that merchant cash advances are loans. In Yellowstone Capital, LLC v. Central USA Wireless, LLC et al (Index No: 811837-2017), the Honorable Timothy J. Walker balked at the defendants’ argument that the MCA agreement was usurious.
“The only ‘proof’ that Defendants submit in support of their usury claim are self-serving misconstructions of cherry-picked provisions of the merchant agreement, and an outright disregard for contrary provisions contained in that document,” he opined.
Citing dozens of trial court decisions in merchant cash advance cases and binding precedent established by Champion Auto Sales, the judge not only shot the usury argument down but also awarded the recovery of attorney fees to the MCA company for having to defend themselves against something so frivolous.
“The Court determines, in light of the history of these litigated matters and known binding precedent, Plaintiff is entitled to recover reasonable attorneys’ fees and costs incurred in defending the Motion [..],” he ordered.June 26, 2018