When a promissory note is lost, the obligation to repay a loan continues, and the lender may “re-establish” the note so long as it has not sold or transferred the note, writes our colleague Susan Vuernick in "Don’t Lose It over a Lost Promissory Note" in Cadwalader's REF News and Views. She goes on to review recent case law on lost notes arising in the context of real estate foreclosures. The article provides a helpful guide to the significance of a lost note and potential curative steps.

Of course, in the fund finance context, as with syndicated commercial credit facilities more broadly, there is no strict legal requirement for a note, and the primary benefit – a note’s usefulness as a negotiable instrument that a holder in due course can take free and clear of certain claims and defenses – is not available when the note does not contain all essential terms of the repayment and an unconditional promise to repay. Not surprisingly, a number of lenders have concluded that the additional administrative burden associated with notes outweighs the potential benefits.