RICK L. KNUTH is the keeper of the Banking and Finance Law Spotlight Site.

Rick's practice focuses on assisting institutional and private lenders and borrowers in asset-based loan transactions, real estate financing, accounts receivable and inventory-based financing. He has over 30 years experience in loan documentation, mortgage and trust deed foreclosures, loan participations, credit opinion letters, workouts, and insolvency proceedings of all kinds. He counsels banks large and small in all aspects of their commercial credit relationships.

Look for postings by the other attorneys in our Commercial Lending and Banking Practice Group.

Keven M. Rowe (Group Leader)
Tom Berggren
Rick L. Knuth
Kyle V. Leishman
James W. Peters
Susan B. Peterson
Jacob Redd
George R. Sutton
Glen D. Watkins
Randon W. Wilson

Published Articles

"Fraudulent Checks- the 'Same Wrongdoer' Defense"
by Rick L. Knuth

Originally Published in Utah Banker Magazine Fall 2013.

Important Resources
Before You Send the Default Letter, . . .
Posted on Apr. 2, 2014

My blog entry of February, 2013 addressed using a pre-negotiation agreement before starting loan modification or workout discussions with a defaulting borrower. My central point was that pre-negotiation agreements are useful in two ways: (1) to cut off any claims of waiver and to clear the conversation of any shadow of lender liability; and (2) to focus the borrower’s mind on the need to solve the problem.

After that posting, one of my clients asked about the timing of sending the default letter and presenting the pre-negotiation agreement: When is the best time to present the pre-negotiation agreement? This is a very good question. Usually, I get a troubled loan file from the client after the default letter has already gone out. I review the loan documents, check to identify the collateral and make sure the lender is perfected, then call the work-out officer and ask how they would like to proceed. Sometimes it’s apparent that the banker on the other end of the phone has given this question no thought whatsoever.

That’s backwards.  The time for the lender to plan what they want from the borrower and how they are going to get it is before the NOD is sent.

The notice of default is a line-in-the-sand, pistols-at-dawn invitation to a fight. The last thing that you, as a lender, want to do is to arouse your miscreant-borrower from his deadbeat torpor and get him to his lawyer before you have decided what you are going to do. Once the excitement starts, the lender is no longer in control of how things play out, but will have to respond to whatever the borrower does. If, as is usually the case for a lender, you get to make the first move, you want your initial action to advance your overall strategy, and perhaps automatically sending off a default letter is not as effective as, say, setting off a deposit account; suing for a pre-judgment writ of garnishment or attachment; or appointing a receiver for income-producing collateral.

Before you start pushing over the dominoes with a default letter, know where you want to go.


This post was written by attorney Rick L. Knuth

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Rick Knuth is a member of the American College of Mortgage Attorneys.

George Sutton was recognized in 2012 as Utah Attorney of the Year in Financial Services Regulation Law by Best Lawyers in America.

Rick Knuth was recognized in 2012 as Utah Attorney of the Year in Banking and FinanceLaw by Best Lawyers in America.

All eligible attorneys in this group are ranked AV Preeminent by Martindale-Hubbell.

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