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Scott Lessne

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Scott Lessne chairs the firm’s Commercial Finance & Lending team. Scott’s practice involves the representation of financial institutions and corporate clients in connection with the negotiation and documentation of commercial, asset-based, project-related, and real estate loan transactions, as well as advising clients on legal issues arising in complex single and multi-lender loan workouts and restructures. In addition, Scott advises financial institution clients on creditors’ rights remedies, including judicial and non-judicial enforcement actions and bankruptcy strategies. Scott has particular experience in the financial services, health care, energy, restaurant, and hospitality industries.

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What You Need to Know

Key takeaway #1: Bank regulators have shifted from prior approval to examination scrutiny. Banks no longer need supervisory nonobjection to lend against crypto collateral. Regulators are likely to focus their examinations on collateral operations, BSA/AML and sanctions compliance, and third-party risk management.

Key takeaway #2: Control-based perfection trumps filing, with a June 3, 2027, New York deadline to re-perfect existing security interests. Under the 2022 UCC amendments, a security interest in controllable electronic records perfected by control as of June 3, 2027, will have priority over a filing-only perfection, regardless of timing. Lenders relying on filing alone should consider taking steps to comply with UCC Article 12’s control arrangements before the adjustment date.

Key takeaway #3: Custody terms determine ownership in insolvency. Documents that permit a custodian or platform to use or rehypothecate pledged assets may impair the secured nature of a claim, leaving the lender with an unsecured one. Parties should confirm segregation, retained borrower title, and a prohibition on rehypothecation in custody documentation.

Key takeaway #4: Bankruptcy safe harbors may not apply; margin mechanics are the practical protection. Because spot crypto lending may fall outside the Bankruptcy Code’s safe harbors, conservative advance rates and market-based loan-to-value triggers are the principal protections.

Key takeaway #5: No capital recognition for digital asset collateral, and state licensing may apply. Digital asset collateral currently earns no credit risk mitigation relief under U.S. capital rules, and nonbank lenders may face state licensing obligations.

Continue Reading Lending Against Digital Assets: Five Key Takeaways for Lenders After a Year of Regulatory and UCC Change

Crowell & Moring attorneys Paul Haskel, John Laird, Scott Lessne, and Paul Muscutt have contributed a chapter to ICLG’s Lending & Secured Finance Laws and Regulations 2026, providing a comprehensive introduction to litigation funding.

The chapter examines the key players in the litigation funding space, the legal and regulatory frameworks governing funding arrangements in…

The UK Ministry of Justice has announced an intention to remove English third-party litigation funding from the current requirements of the Damages-Based Agreements Regulations 2013 (“DBA Regulations”) and provide for a different regulatory framework. As we have discussed previously here and here, various forms of uncertainty remain for third parties who wish to fund…

While it’s not common for a lender to require an individual guaranty in order to extend commercial credit to an operating business[1], when such a requirement arises, the individual providing a guaranty should not take such a requirement lightly. If the guaranty is structured as a full recourse guaranty, it will create an obligation whereby the individual guarantor is responsible to repay the loan from his or her own personal assets. Individuals who convince themselves that a guaranty is just a lender formality and hope to rely on their relationship with their lender should a problem arise with the loan, may find their sense of comfort to be misplaced. A recent decision from the Southern District of New York serves as a reminder that well-drafted guarantees can and will be enforced.

In White Oak Glob. Advisors LLC v. Clarke, No. 24-CV-2128 (JSR), 2025 WL 2113436 (S.D.N.Y. July 29, 2025), Thomas and Ana Clarke (the “Clarkes”) each signed individual guarantees in favor of White Oak Global Advisors LLC (“White Oak”) in connection with loans that White Oak made to businesses indirectly owned by the Clarkes. The loans matured in 2023 and a total of over $200 million was outstanding at maturity. The parties agreed in the guaranty documents that the maximum liability of each guarantor under their respective guarantees was to be capped at $20 million per guarantor. The underlying dispute focused on whether the guarantees were applicable to a promissory note (the “Note”) that had been amended and restated numerous times and if so, whether the guarantees were unconscionable.

Continue Reading Personal Guarantees: When a “Formality” Becomes a $20 Million Reality

2024 brought a number of headline stories that will impact the bankruptcy and restructuring market in 2025 and beyond. A few of those are summarized below.

LMEs (Of course).  Liability management exercises — sometimes referred to as “lender-on-lender violence” — continued on their growth trajectory during 2024, with restructuring advisors looking for (and finding) gaps in credit documents that allow for the practice.  While uptiers, drop-downs and double-dips were all the talk of the first 364 days of the year, the Fifth Circuit’s ruling in Serta coming on December 31st closed out the year with a bang (or a thud).  The Circuit Court reversed former Bankruptcy Judge David Jones’ ruling which had blessed Serta’s uptier transaction (allowing the majority lenders to leapfrog the non-participating lenders). Judge Jones’ original decision, coming from a prominent jurisdiction (Southern District of Texas) was a “stamp of approval” for many uptier transactions that came before and that followed.  Among other things, the District Court found that the exchange of existing debt for newly issued senior debt did not constitute an “open market purchase” because it was not made available to all lenders. The District Court further remanded to the Bankruptcy Court the question of whether the excluded lenders had valid counter-claims (breach of contract, etc.) against the participating lenders and the borrower. The court further stripped certain indemnification provisions that had been included in the plan to protect against such a ruling.  This brand new decision will likely have a dramatic impact on the feasibility of future LME transactions (at least until the drafting catches up). Others transactions that do not rely on open market purchases (J.Crew, for example) will be less impacted by the ruling. 

Continue Reading Bankruptcy and Restructuring in the US:  A Snapshot of 2024

Secured lenders who include personal property assets as collateral in lending transaction structures have long relied upon the regularity and clarity of the Uniform Commercial Code (“UCC”) provisions which provide a roadmap for creation, perfection and enforcement of security interests in personal property. Revisions made to the UCC since 2000 have recognized and incorporated concepts…

In our February 14, 2022 post, we highlighted certain consequences regarding the treatment of a merchant cash advance (“MCA”) transaction as a “loan” rather than a “true sale” of receivables or future receivables and the implications of such treatment to an MCA provider.  Among the takeaways was that a court’s characterization of an MCA transaction as a loan opens an MCA provider up to a host of potential claims by cash advance recipients (“customers”) and their successors (e.g., bankruptcy trustees) that are not otherwise available if the transaction is treated as a true sale.

Continue Reading Merchant Cash Advance Redux: Loan vs True Sale – New York Federal Courts Weigh In

Unitranche financing began as a middle-market product, tracing its origins to the days of recovery from the global credit crisis. The credit markets re-opened with an explosion of available capital from traditional lenders, business development companies and other direct lenders. With an increasing supply of capital, leverage shifted to borrowers and private equity, allowing them to better dictate the terms and conditions of their loan facilities. With the greater prevalence of so-called “covenant-lite” loans, also came the exponential growth of the unitranche market. What began as a financing structure most often used for loans of less than $50 million, unitranche loans are now regularly used for financings exceeding $1 billion, and in 2021, up to $3 billion.  A unitranche facility combines the benefits of multi-tranche debt regularly found in the syndicated lending markets (i.e., the ability to raise funds from lenders with different risk profiles and return expectations), with those of speed and certainty that are a hallmark of the private lending community. In its simplest form, unitranche facilities are structured using a single-tier, combing the senior and junior components of syndicated loans into one loan. Whereas a syndicated loan may require distinct grants of senior and junior liens on collateral to multiple lending groups, a unitranche uses a single lien to secure the entire facility. The benefits to the borrower are obvious: it is faced with a single term loan: one set of principal and interest payments, a single package of covenants to monitor, and a uniform list of defaults to avoid. Layering on the advantage of a single agent, a unitranche facility greatly streamlines loan administration from the borrower’s perspective.

Continue Reading The Continued Growth of Unitranche Financing

The merchant cash advance (“MCA”) industry recently provided two different bankruptcy courts with an opportunity to consider the characterization of MCA funding transactions as either “true sales” of receivables or “disguised loans”. [1] MCA funders typically provide cash to a financially distressed company in exchange for a percentage of that company’s future receivables collection. Companies in need of liquidity will often seek to monetize their receivables, either by selling them (i.e., a true sale) or using them as collateral for a loan (i.e., a secured loan). Recognizing the benefits of having an ownership interest in such assets in case of a counterparty’s bankruptcy, MCA funders typically attempt to structure their transactions as “purchases” of a company’s future receivables. For that same reason, a bankruptcy trustee or a debtor-in-possession will often argue that these transactions are really “disguised loans” and that the MCA funder is only a secured creditor of the bankruptcy estate that owns the receivable.
Continue Reading Receivables Transactions Revisited: Recent Decisions Split on Sale vs. Loan Characterization

Article 9 of the Uniform Commercial Code, adopted in all fifty states plus the District of Columbia with relatively few variations, sets out, among other things, the rules to be followed when obtaining a security interest in personal property collateral to secure a loan. The basic premise of Article 9 is that if the lender follows the rules, it should be protected against third parties, including other creditors or a bankruptcy trustee, who would seek to challenge the lender’s security interest or the priority of the security interest.
Continue Reading UCC Financing Statements and Debtor Name Errors: The Litigation Continues