When consolidating promissory notes, can you consolidate the notes to have the effective date of the original note?
2 Answers from Attorneys
Dear Sir or Madam,
This does not seem to be a securities law question, but in certain circumstances, promissory notes can meet the definition of securities under federal law, SEC precedent and state blue sky laws. Regardless, it seems that if both parties to the transaction wish to do so than they can consolidate the notes to the effective date of the original promissory note.
I would say that the effective date can be whatever all the parties agree upon (i.e., if both the obligor and oblige are in accord), provided that neither the intent or the effect of the backdating is to defraud a third party. Also, if applicable, note that the priority of recorded liens, etc. is often dependent upon the date of recordation, not the date specified in the recorded instrument.