FACTORING - Barakat + Bossa

Overview

Barakat + Bossa represents factoring companies, asset-based lenders, and secured creditors in structuring, documenting, and enforcing their account and asset based finance transactions. Our Factoring Practice combines a practical understanding of how factors operate with the litigation capability of a firm built for high-stakes commercial disputes. Our clients rely on us to protect their position from the first term sheet through final recovery, across industries including construction, transportation and freight, import-export trade, and staffing.

Strong enforcement starts with strong documentation. We advise factors on the structuring and negotiation of factoring transactions and prepare and review factoring, purchase, security, and guaranty agreements built to hold up under scrutiny. Our attorneys conduct due diligence and risk assessment on prospective clients and account debtors. We guide factors through UCC perfection and priority, compliance with state commercial financing disclosure laws, and newer collateral types such as controllable electronic records under UCC Article 12.

When a transaction goes wrong, we move quickly to protect our clients’ collateral and recover what they’re owed. We pursue account debtors who ignore notices of assignment and resolve priority disputes with competing secured creditors, merchant cash advance funders, and taxing authorities. We also investigate and litigate fraud, including fictitious or double-factored invoices, diverted collections, and fraudulent transfers. When an obligor files for bankruptcy, we enforce our clients’ rights through proofs of claim, cash collateral and adequate protection disputes, and non-dischargeability actions. We also handle post-judgment collection, garnishment, and cross-border asset tracing, and we defend factors against recharacterization, usury, and lender-liability claims.

Our attorneys are active in the factoring industry. They present to the International Factoring Association on fraud detection and creditor remedies and write regularly for Commercial Factor on issues such as PACA trust rights, self-help remedies, and creditor strategy in bankruptcy. That involvement keeps us close to the challenges our clients face and helps us give counsel that is both legally sound and commercially practical.

Key Contact

Jocelyne A. Macelloni

Factoring Practice Leader

Areas of Focus

Compliance and Regulatory Guidance

We provide focused regulatory guidance to businesses engaged in factoring. As scrutiny from state and federal authorities intensifies, clients rely on us to structure agreements that comply with usury laws, licensing requirements, and evolving disclosure obligations. Our team advises on minimizing enforcement risks by aligning practices with the latest legal standards and regulatory interpretations. With deep experience at the intersection of finance and litigation, we ensure operations remain both aggressive in the market and compliant under the law.

Dispute Resolution in Factoring Transactions

Complex disputes stemming from factoring and asset-based lending often involve intricate claims such as breach of contract, fraud, usury, and unlawful collection practices. Representation spans plaintiffs and defendants alike in state and federal courts, as well as arbitration forums, frequently achieving injunctive relief and favorable resolutions in high-stakes cases. Expertise extends to tortious interference, RICO allegations, and post-judgment enforcement. Employing a strategic, trial-ready approach, clients’ financial interests are vigorously protected while minimizing disruption to their ongoing business operations.

Due Diligence and Risk Assessment

Before funding a new client, purchasing a portfolio, or increasing a credit line, factors and funders rely on us to find the legal, financial, and regulatory risks that could undermine their position. We review agreements to confirm they are enforceable and structured as true sales of receivables, which reduces exposure to recharacterization and usury challenges. We also check the prospective client’s existing UCC filings, competing liens, tax obligations, and litigation history, and test account debtors and the underlying receivables for warning signs of fraud. This front-end diligence helps our clients price risk accurately, perfect and protect their collateral, and avoid costly disputes later.

Factoring Agreements and Documentation

We assist clients, both young and old in the industry, in drafting, updating, and negotiating their agreements so they are clear, enforceable, and tailored to their specific business needs. By carefully structuring terms and conditions, we help protect our clients’ rights while maintaining commercial flexibility.

Structuring and Negotiation of Factoring Transactions

Structuring and negotiating factoring transactions demands a nuanced understanding of both commercial goals and legal complexities. We collaborate closely with clients to design transaction frameworks that optimize regulatory compliance while maintaining operational flexibility. Our team carefully navigates key issues such as risk allocation, payment structures, and security interests, proactively addressing potential challenges. This strategic approach ensures factoring arrangements are resilient, transparent, and aligned with our clients’ broader business objectives.