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#668909 - 01/19/07 06:58 PM Standby Letter Of Credit Issues
Skyline Offline
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Skyline
Joined: Sep 2005
Posts: 590
Two issues proposed today: 1) Non-revocable expires in Aug 2007, customer request cancelled due to no longer dealing with vendor, and 2) Automatic renewable one person shop, person passes away, business ceases.

Can we take these off of our books or do we need to wait until expiration date? LO wants them off his list. Amounts will not impact our financials.
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Lending Compliance
#669013 - 01/19/07 07:54 PM Re: Standby Letter Of Credit Issues Skyline
Rocky P Online
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Joined: Jun 2003
Posts: 7,650
Florida
An irrivocable credit is "irrevocable".

Unless all parties agree to cancel the obligation it cannot be cancelled. What happens if your customer is trying to pull a fast one on the vendor? The bank would be liable for any and all funds. If the vendor agrees to cancel, have them return the original credit to you, along with their written authorization.

#2 - IMHO the same no answer - it becomes a liability of the estate, unless state law says otherwise.
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#669069 - 01/19/07 08:54 PM Re: Standby Letter Of Credit Issues Rocky P
Skyline Offline
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Skyline
Joined: Sep 2005
Posts: 590
SB - your tag line should be "others learning from you - one post at a time". Thank you for confirming the answer that I had already given the LO.
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