The Legal Environment Dimension

Do borrowers benefit from the fact that lenders may freely assign their rights under loan agreements? If so, how?

What If the Facts Were Different?

Suppose that Hosch had sold the equipment financed by the loans from Citicapital to a third party. Would Hosch still have been liable to Colonial Pacific? Why or why not?

Edward Hosch entered into four loan agreements with Citicapital Commercial Corporation to finance the purchase of heavy construction equipment. A few months later, Citicapital merged into Citicorp Leasing, Inc., which was then renamed GE Capital Commercial, Inc. One year later, GE Capital assigned the loans to Colonial Pacific Leasing Corporation. When Hosch defaulted on the loans, Colonial provided a notice of default and demanded payment.