Results 1 to 7 of 7

Thread: Lending to Agricultural Producers

  1. #1
    Regular
    Join Date
    Nov 2002
    Posts
    452
    Post Thanks / Like

    Post Lending to Agricultural Producers

    When providing financing to an agricultural producer, what recourse does the lender have?

    Are you "secured" under Dominican Law by assets, future export contracts, receivables? Will this security be recognized in court?

    Is there precedent for this type of lending?

    What type of court oversees this procedure?

    Thanks in advance for any input.

  2. #2
    Bronze
    Join Date
    Nov 2008
    Posts
    925
    Post Thanks / Like

    Default

    Title to the land is your really only guarantee

  3. #3
    Regular
    Join Date
    Nov 2002
    Posts
    452
    Post Thanks / Like

    Thumbs down Wow

    That is crazy. I work on commodity structured trade finance deals and the flexibility in financing allows for increased capital flows into countries like brazil or colombia for example.

    I guess if you draw up an agreement under NY state law with a mortgage on the land then you could circumvent the process?

    Really kind of sad given all the potential the country has for agricultural products.

  4. #4
    Regular
    Join Date
    Apr 2009
    Posts
    32
    Post Thanks / Like

    Default

    yes its true, but you dont know the rules here. you lose.. Secure the money with the land... thats why farms lay shallow...

  5. #5
    DR1 Expert
    Join Date
    Jan 2002
    Posts
    2,229
    Post Thanks / Like

    Default

    There are various types of collateral possible: land (mortgage), equipment or inventory ("prenda"), receivables ("cesión de crédito"), etc.

    Now, don't make the same mistake I've seen made by some US creditors: establishing the collateral through a US contract. The collateral has to be established under Dominican law and registered in the DR according to Dominican law; otherwise, it will be very difficult, not to say impossible, to enforce.
    Fabio J. Guzman
    Guzman Ariza
    Attorneys-at-Law
    Sosúa, Santo Domingo, San Francisco de Macorís, Cabrera
    Las Terrenas, Samaná, Bávaro (Punta Cana) and La Romana
    Dominican Republic


    [email protected]


    Website

    The opinion above should not be construed to be formal legal advice and was given without reviewing the facts and documents pertinent to the case. The reader should NOT act based upon this opinion without seeking professional counsel.

  6. #6
    Regular
    Join Date
    Nov 2002
    Posts
    452
    Post Thanks / Like

    Default

    Mr. Guzman, thanks for your help. This is very educational for me.

    Basically a lender has a to establish collateral under dominican law, but the contract itself, excluding collateral could be drawn up under NY law.
    This is usually the way banks deal with Brazilian collateral.

    Dominican courts have to say that assets XYZ will be used as collateral in a transaction, thus enabling a lender to legally have recourse in the DR to said collateral.

    Is my understanding correct Mr. Guzman?

  7. #7
    DR1 Expert
    Join Date
    Jan 2002
    Posts
    2,229
    Post Thanks / Like

    Default

    No, Dominican banks can and do lend without collateral. However, if you do establish a collateral in the Dominican Republic, you have to do it pursuant to Dominican law.

    For a loan without collateral under a foreign contract, you can sue directly in the DR seeking a Dominican judgment to be enforced against assets in the DR.
    Fabio J. Guzman
    Guzman Ariza
    Attorneys-at-Law
    Sosúa, Santo Domingo, San Francisco de Macorís, Cabrera
    Las Terrenas, Samaná, Bávaro (Punta Cana) and La Romana
    Dominican Republic


    [email protected]


    Website

    The opinion above should not be construed to be formal legal advice and was given without reviewing the facts and documents pertinent to the case. The reader should NOT act based upon this opinion without seeking professional counsel.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •