Loan contract governing law

[Researcher]

I am doing a research on bank loan contracting. I search some loan contracts between banks and Nevada-incorporated firms. Some agreements say that "Section 8. Governing Law. This Amendment shall be governed by and construed and enforced in accordance with the law of the State of New York".

I am not sure to what extent these clauses refer to corporate laws governing D&Os' fiduciary duties. If the directors and officers breach the fiduciary duties owed to creditors, should Nevada law or New York law be applied?

Thanks for the help!

 

[despritfreya]

Review the following for some info (you may have to cut & paste). Also Google "breach of fiduciary duty and choice of law".

Edt. Apparently even cut and paste doesn't work. Do the Google search. It should get you to the NY Law Review article.

Des.

 

[Michael Wechsler]

I've fixed this and in short, choice of law clauses may be enforceable as it pertains to the contract with some clear exceptions:

• It would be illegal to forum shift;
• The forum has no reasonable relationship to the parties or the transaction;
• There is some reason why enforcing the clause would be contrary to fairness and justice.

It's difficult to answer specific questions without details.