A legal right drafted into a loan agreement allowing the lender to seek the right for damages in case of default on the loan. It identifies the party for recourse and this party must sign the document in order to bind itself to the lender. In most situations, the recourse is to a third party that will derive some form of benefit from the loan.
The Internal Revenue Service uses an economic substance test to identify sham transactions that exist solely to reduce or eliminate taxes. In addition, the courts use this same doctrine to rule on the legitimacy of activity […]