Enforceability of Capital Commitments in a Subscription Credit Facility

A subscription credit facility (a “Facility”), also frequently referred to as a capital call facility, is a loan made by a bank or other credit institution to a closed end real estate or private equity fund secured by the capital commitments of the fund’s investors. As the number of new funds in formation appears to be up markedly from the recent past, interest in Facilities from funds and potential creditors is up dramatically.