On June 26, 2019, McCausland Keen + Buckman Shareholder Benjamin R. Picker testified at a hearing before the Small Business Committee of the United States House of Representatives on June 26, 2019. The title of the hearing was “Crushed by Confessions of Judgment: The Small Business Story” and the topic was described as follows:
Time and again, small businesses report one of the biggest challenges they face in starting, operating, or expanding a business is access to capital. Unfortunately, some small firms fall victim to merchant cash advance companies who require borrowers to sign a document called a confession of judgment (COJ) as part of an application. By signing, small business borrowers agree in advance to automatically lose in the event of a legal dispute. That lender can then accuse a borrower of not paying, without presenting proof, and have a court judgment signed by a clerk the same day. At that point the lender can present the COJ to the borrower’s bank demanding funds, leaving small business owners penniless overnight and forced to close their business. This hearing will enable the Committee to examine this practice as Members seek to address this issue. Members will hear from a variety of witnesses detailing the legalities of the practice, its use, and impact on small business borrowers.
Watch the hearing on YouTube by clicking here.
Mr. Picker's extensive litigaton experience includes utilizing, defending against, and otherwise litigating over confession of judgment provisisions.