Contractors Equip Clause Samples
The "Contractors Equip" clause defines the terms under which equipment owned, leased, or used by contractors is covered under an insurance policy or contract. Typically, this clause specifies what types of equipment are included, such as tools, machinery, or vehicles, and may outline conditions for coverage, like storage requirements or usage limitations. Its core function is to ensure that contractors' equipment is protected against risks such as theft, damage, or loss while on a job site or in transit, thereby minimizing financial exposure for both the contractor and the project owner.
Contractors Equip. Supply, supra n. 4, 861 F.2d at 244 ("[w]hether a debtor in possession has an interest in property is determined by state law.") (citation omitted). However, it should also be recognized that bankruptcy courts, as courts of equity, have the power to recharacterize a transaction based upon substance rather than form. E.g., In re Omne Partners II, 67 Bankr. 793, 795-7 (Bankr. D. N.H. 1986) ("It is well established that a bankruptcy court, as a court of equity, may "look through form to substance" in determining the true nature of a transaction relating to rights of parties against a bankruptcy estate . . . . I do not believe however that bankruptcy judges have a warrant from Congress to run roughshod over the economic landscape recharacterizing commercial transactions entered into by sophisticated parties – restating them in terms of their "economic substance" contrary to their negotiated and agreed form – in the absence of some triggering factor permitting such recharacterization, i.e., an actual ambiguity in the documentation, a substantial factual dispute as to the intent of the parties, or some "disguise" or "misleading" aspect of the transaction."). 7 [Reserved] 8 Generally, with regard to courts that have adopted the First Approach, where commercially sophisticated parties have characterized transactions as sales and have acted consistently with that characterization, courts have been unwilling to disturb that characterization even though the transactions may also bear certain attributes of secured loans. Thus, in In re ▇▇▇▇▇▇▇, 562 ▇.▇▇ ▇▇▇, ▇▇▇ (▇▇▇ ▇▇▇. ▇▇▇▇), the court, in applying Illinois law, concluded, in upholding the transaction at issue as a sale, that the "real" intent of the parties is controlling as long as the characterization of the transaction by the parties is supported by the facts. "If the parties actually intended to effect an absolute transfer of ownership, a court of equity will not ignore that intent and make another contract for them." Id. Similarly, in Omne Partners II, supra n. 6, the court, in upholding that transaction as a true lease, concluded that the key factual issue was the intent of the parties and that a showing that the parties intended the transaction to be a sale-leaseback transaction would have to be rebutted by "clear and convincing evidence" that the transaction was understood by the parties to be, and had the economic substance of, a secured financing. While this standard suggests that where the parties inten...
Contractors Equip. Supply") ("Because the assignment involved only a security interest and did not transfer title, [the debtor] retained an interest in the account receivable even after [the secured creditor's] notice to [the account debtor]. This interest was sufficient to bring the account receivable into the debtor's reorganization estate.") (citation and footnote omitted) with In re Southwest Freight Lines, Inc., 100 Bankr. 551, 555 (D. Kan. 1989) (where debtor effectively conveyed its accounts receivable to creditor prepetition and confirmed postpetition that it had no equity in such accounts receivable, the bankruptcy court "was correct in holding that it lacked subject matter jurisdiction over the accounts and that the [bankruptcy] Trustee lacked standing to bring the adversary proceedings" to attempt to collect the accounts). Section 362(a)(3) of the Bankruptcy Code provides that the commencement of a bankruptcy case "operates as a stay, applicable to all entities, of . . . any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate" (emphasis supplied). This provision of the Bankruptcy Code arguably stays actions against non-estate property in the debtor's possession. Also, Section 105(a) of the Bankruptcy Code provides that "[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of the [Bankruptcy Code]." 5 See e.g., In re Crysen/Montenay Energy Co., 902 F.2d 1098, 1101 (2d Cir. 1990) (citing In re ▇▇▇▇▇▇'▇ Appliance Corp., 874 ▇.▇▇ ▇▇, ▇▇ (▇▇ ▇▇▇. 1989)).