Jencks Law, P.C. has been engaged in the factoring and commercial finance industry for over 25 years. The firm represents factors, local and regional banks, asset-based lenders, equipment finance companies and other finance companies, and routinely counsels over 50 commercial finance companies.

We assist factors through every stage of the relationship, from drafting the factoring agreement and related documents at inception to advising when a relationship should go into workout or bankruptcy. We work closely with clients to structure, negotiate and document flexible factoring arrangements that meet the needs of the specific transaction and protect the factor.

Matters we handle

• Contracts and documentation
• Consulting and operational best practices
• Due diligence
• Large and advanced collections
• Bankruptcy issues (client and account debtor)
• DIP financing
• Preference claims
• Mergers and acquisitions
• Litigation
• Risk management
• Lien priority issues
• Participations
• Intercreditor negotiations
• Fraudulent conveyance issues

Factoring litigation

Litigation is a large part of our factoring practice. We represent factors as plaintiffs and defendants in state and federal courts across the country, and we try cases. Most factoring disputes come down to the paper and the process: what the notice of assignment said and who received it, what the account debtor verified, and where the money went. We know how those operations run, and we build the case from there.

Disputes we litigate

• Collection actions under UCC § 9-406 against account debtors and freight brokers that paid the wrong party after receiving a notice of assignment, including payments made to the carrier directly or by check
• Disputes over broker and account debtor verifications, including detrimental reliance, estoppel and misrepresentation claims
• Misdirected payments: hacked email, fraudulent changes to notices of assignment, and redirected ACH payments
• Priority disputes between competing factors, lenders and MCA funders claiming the same receivables
• Double factoring and other client fraud
• Enforcement of factoring agreements, validity guaranties and personal guaranties
• Account debtor setoff, chargeback and defense disputes
• Turnover and recovery of collateral and proceeds
• Defense of lender-liability and recharacterization claims, including loan-versus-true-sale and usury challenges
• Multi-party and multi-district litigation
• Bankruptcy-related disputes: preference defense, cash collateral and lien priority

Many of these cases move fast. Money paid to the wrong party or redirected by a fraudster does not sit still, and a priority dispute can turn on who acted first. We move quickly to preserve evidence, put the right parties on notice and make demand.

We work with a network of local counsel across the country on transportation factoring litigation, and we serve as local counsel in South Dakota for out-of-state firms.

We know the operation, not just the agreement

Our services to factors extend beyond the law. We provide in-house consultations on office operations, the paper of transportation, industry trends, collection assistance, credit and field examination support. We understand how underwriting, verifications, notices of assignment, reserves, chargebacks and collections work in practice, because we have taught them for years: David’s IFA training classes and the firm’s 2022 Transportation Factoring Operations Manual cover each of those steps.

Documents and forms

The firm has developed factoring documents, templates and forms that can be customized to your company, including:

• Factoring Agreement
• Notice of Assignment
• Notification of Assignment
• Company Resolutions
• UCC Financing Statement Language
• Personal and Corporate Guaranties

Banks and agricultural lenders

Jencks Law, P.C. also provides services to banks in agricultural and commercial foreclosures and large collection actions, and supports loan documentation, title clearing and asset securitization.

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