February 7, 2026 – By Christian Smith, Berkshire Financial Services
The first week of February produced three converging signals. The Anadrill ruling from January 28 began circulating in legal publications. The NPR tariff story was building toward national attention. And the industry’s own market data showed a contradiction. The product is growing. The legal ground underneath it is eroding.
Bloomberg Law Is Tracking the Pattern
Bloomberg Law has been documenting how merchant cash advance lenders increasingly appear as major creditors when small and midsize companies file for bankruptcy. The pattern is consistent across industries and across federal districts. MCA debt is no longer an alternative-finance side note. It is a primary driver of business insolvency in 2026.
Bloomberg Law’s coverage matters because it puts the conversation inside the trade press read by the lawyers, judges, and creditors who decide how MCA contracts are enforced. The conversation moved from business-owner forums into legal publications. What lawyers read shapes what courts do.
The You Signed It Defense Is Losing in Court
In re Anadrill Directional Services Inc. was decided in the United States Bankruptcy Court for the Southern District of Texas on January 28, 2026. A Houston bankruptcy court allowed a trustee to challenge an MCA funder on usury grounds. The court found the merchant’s obligation to repay 1.016 million dollars on a 650,000 dollar advance lacked reasonably equivalent value.
That finding is the legal basis for a constructive fraudulent transfer claim. Constructive fraudulent transfer means payments already made can potentially be recovered. The challenge is not limited to stopping future payments. It extends backward to what has already been extracted.
Business owners used to hear you signed it, you are stuck with it. In 2026, that is no longer the full story.
The Marketing Blitz Is Accelerating. The Harm Is Accelerating With It.
The industry markets relentlessly. One Virginia business owner who manufactures handbags and accessories gets five calls and texts a day offering hundreds of thousands of dollars within a day. One Ohio business owner who imports sneaker-care products has fielded over a hundred emailed pitches in a matter of weeks.
Nine out of ten businesses get approved. The approval rate is high because the product is not underwritten for the borrower’s ability to sustain it. It is underwritten for the funder’s ability to extract value from it.
The Yellowstone Claim Deadline Just Passed
The New York Attorney General’s Yellowstone Capital settlement claim period closed on January 9, 2026. Merchants who paid more to Yellowstone than they received had until that date to file a claim. The settlement involves a 1.065 billion dollar judgment with more than 534 million dollars satisfied through automatic cancellation of outstanding merchant debts. Yellowstone is permanently barred from the sales-based financing business.
For businesses that missed the deadline, the settlement itself is the precedent that matters. The New York Attorney General has demonstrated both the authority and the willingness to pursue billion-dollar enforcement actions against MCA lenders. That changes the negotiating calculus in every active restructuring file.
What This Means for Your File
Legal ground exists. Bankruptcy courts are using it. State attorneys general are using it. The trade press is documenting the pattern. None of that activates on its own for your specific file. It activates when you have legal representation, your original agreements, and a structured program working for you from day one.
The ruling does not do the work. The structure does. Enrollment is what activates the structure.
To speak with a Berkshire Financial Services Finance Manager about your file, call 1-800-801-1019.
Informational purposes only. Not legal advice. Berkshire Financial Services is not a law firm. Results vary.