Merchant Cash Advance Litigation In Connecticut

The recipients of some merchant cash advances have an opportunity to defend, and even counterclaim for treble damages and attorneys' fees, when funders of certain loans characterized as merchant cash advances sue them in Connecticut. But it appears that most recipient defendants default, or negotiate a resolution instead. By failing to raise these defenses and assert counterclaims, these recipients are surrendering valuable leverage during the resolution process.

Fairly recently, Connecticut seems to have become a favored jurisdiction for "merchant cash advance" funders, who require Connecticut law to govern their contracts. They also, sometimes, require or allow for lawsuits based on those contracts to be brought in Connecticut state courts.