Pitfalls of Relying on General Indemnities

, New York Law Journal


In their Financing column, Jeffery B. Steiner and Jason R. Goldstein write: Lenders cannot rely exclusively on generic catch-all indemnification provisions to recover all of their loan expenses from their borrowers. To the extent that lenders expect to enter into hedging transactions when extending credit, the loan documents should delineate the circumstances when the borrower will be liable for losses arising from unwinding any such transactions, including upon an early prepayment.

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