§3137.5. True sales of receivables; not subject to recharacterization; simulation articles not applicable

A. All sales of receivables over exchanges subject to the scope of this Part as provided by R.S. 9:3137.4(A) shall conclusively result in consummated true sales for all purposes, and not be limited to a bankruptcy context, with the buyer acquiring all of the seller's rights, title and interests in and to the traded receivables and the collection proceeds thereof, and with the seller retaining no vestiges of legal or equitable interest in the receivables sold.

B. As true sales, sales of receivables over exchanges located in this state shall not be subject to recharacterization as loans, extensions of credit, or other credit accommodations by the seller to the buyer, notwithstanding that the seller may be obligated to repurchase the receivable, or the buyer may otherwise have recourse against the seller if the receivable is not paid when due, and further notwithstanding that the seller may be entitled to receive a portion of the collection proceeds. Furthermore, sales of receivables over exchanges located in this state shall not be construed, under any circumstance, to be a simulated sale under the simulation articles of the Civil Code.

C.(1) The seller's written agreement in the underlying documents that the seller absolutely, unconditionally, and irrevocably intends that sales of the seller's receivables over an exchange located in this state result in true sales of such receivables for all purposes, shall be definitive and binding on the seller, and may not be subsequently disavowed or refuted by any of the following persons:

(a) The seller.

(b) The seller's successors or assigns, or any person acquiring rights from or through the seller, including the buyer.

(c) Past and future owners, directors, officers, employees, agents, representatives and attorneys of the seller, or of its successors or assigns, or any person acquiring rights from or through the seller.

(d) The account debtor or any other person obligated to pay the receivable.

(e) All other third persons.

(2) Any person, including anyone listed in Paragraph (1) of this Subsection, attempting to recharacterize a sale of a receivable over an exchange located in this state as anything other than a true sale under Louisiana law, shall be personally liable and obligated by operation of law to reimburse the buyer and the buyer's agents for attorney fees, court costs, arbitration costs, expert fees, and out-of-pocket expenses, including but not limited to travel expenses, expended in defense of the status of such sale as a true sale under Louisiana law.

Acts 2010, No. 958, §1, eff. July 6, 2010.