Question

Assume you are a newly hired associate at a prominent Manhattan law firm. The partner to whom you are assigned is representing a bank that is lending $500,000 to customer who is purchasing a building and restaurant business for $700,000. The bank wants as secure of a loan as possible. The real property and business are owned by the same entity, “Luigis’s Inc. The sole stockholder of Luigi’s Inc. is an individual named James McCarthy. The land and building are appraised at $400,000. The restaurant business owns quite a bit of tangible property, such as several point of sale cash registers, freezers, refrigerators, tables, chairs, plates and cookware, signage, ovens, and a large inventory of food products. In a brief memo, please set forth for the partner what steps and documents are needed to fully secure this loan.

Answer 1