Orrick
A New York state court has voided a $1.3 million loan agreement to a corporate borrower because the loan agreement's stated interest rate of 34% vi...
A New York state court has voided a $1.3 million loan agreement to a corporate borrower because the loan agreement's stated interest rate of 34% violated New York's criminal usury law statute. The loan agreement was governed by Virginia law, which doesn't allow corporate borrowers to plead a usury defense. However, because this borrower was based and licensed in New York, the court found a sufficient nexus to New York to allow the state's public interest against usurious contracts to void the agreement's choice of law provision and enforce New York's criminal usury law.