Category Archives: Interest Calculation

Convertible Note with 150% Default Penalty Not Usurious

A creditor purchased four convertible promissory notes from a company. The notes provided that they could be converted to unrestricted common stock of the company at a 45% discount. Upon an event of default, the notes carried a penalty that required a payment from the … Continue reading

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Erroneous Interest Calculation Dooms Criminal Usury Defense – Part II

As previously discussed, the method used to calculate an interest rate is a critical part of any usury action. This was again highlighted in a recent a New York state case. The plaintiff had filed an action to recover on a loan it had … Continue reading

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Class Action Alleges BofA Overdraft Fees are Usurious

McGee v. Bank of America, N.A. 0:15-cv-60480-JIC On March 9, 2015, a class action lawsuit was filed against Bank of America (“BofA”) alleging that the bank’s ‘extended overdraft fee’ constituted illegal and usurious interest.  The plaintiffs alleged that the rate … Continue reading

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Usury Defense Adequate Grounds to Enjoin Residential Foreclosure

Davis v. Blackstone Corp., 2015 Wash. App. LEXIS 466 (Wash. Ct. App. Mar. 2, 2015) The plaintiff in this case filed an action to enjoin the nonjudicial foreclosure of residential real estate that she owned.   She requested a temporary restraining … Continue reading

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Erroneous Interest Calculation Dooms Criminal Usury Defense

Madison Park Invs. LLC v 488-486 Lefferts LLC, 2015 N.Y. Misc. LEXIS 320 (N.Y. Sup. Ct. Feb. 5, 2015) The plaintiff Madison Park Investors, LLC (“Madison”) commenced this action to foreclose on a commercial mortgage on real property.  David Marom … Continue reading

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3,600% Interest Rate Unconscionable and Against D.C. Public Policy

Adduci v. Krane, 2015 U.S. Dist. LEXIS 13078 (D.D.C. Feb. 4, 2015) A business loan of $100,000 required a “Loan Exit Fee” of $900,000 be paid at the end of a three month term.  Unsurprisingly, Magistrate Judge Alan Kay found … Continue reading

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Method of Calculating Interest Determines Claim of Usury

Martell v Drake, 2015 N.Y. App. Div. LEXIS 692 (N.Y. App. Div. 3d Dep’t Jan. 29, 2015) In a short opinion by Justice Robert Rose, the appellate court affirmed the trial court’s rejection of the defendant’s affirmative defense of usury and … Continue reading

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