LexisNexis ( March 20, 2017, 12:42 PM EDT) -- In our prior story about the very recent Iowa Supreme Court case, we saw the importance of the outright sale/secured loan dichotomy in litigation involving loan participations. For a look at the importance of the dichotomy in another jurisdiction—Iowa's next-door neighbor—consider a Minnesota bankruptcy court decision which involves the following question: If Lender A makes a loan to Lender B secured by all of Lender B's assets, does the collateral include amounts owing by Lender B's borrowers on loans in which Lender B acts as lead lender and other parties act as participants? The answer depends on whether the relationship between Lender B and the participants is truly a “participation” arrangement or a loan by the participants to Lender B. In the Minnesota case, the court finds that (1) the arrangements were "true" participations rather than secured loans, and (2) Lenders A and B intended to exclude all participation interests from Lender A's collateral....