January 31, 2026 – By Christian Smith
The Anadrill ruling dropped January 28. The Yellowstone claim deadline passed January 9. The industry started 2026 with two events that together define the legal environment every business owner with MCA debt is now operating in.
The Anadrill Ruling: What It Actually Says and Why It Matters
In re Anadrill Directional Services Inc. was decided in the United States Bankruptcy Court for the Southern District of Texas on January 28, 2026. The case involved an oil and gas contractor. The MCA funder advanced approximately 650,000 dollars. The total repayment obligation was 1.016 million dollars.
The court allowed a trustee to advance claims of usury violation and constructive fraudulent transfer. Constructive fraudulent transfer means payments already made can potentially be recovered. The court found the obligation to repay 1.016 million dollars on a 650,000 dollar advance lacked reasonably equivalent value.
The ruling matters because of how the court got there. Courts use a three-factor test to decide whether an MCA is a disguised loan. Whether there is a meaningful reconciliation provision that actually adjusts payments when revenue changes. Whether the agreement has a finite, binding term. Whether the lender carries any real recourse if the merchant goes bankrupt.
If the MCA provider is absolutely entitled to repayment under all circumstances, the transaction is a loan regardless of what the contract calls it. The Anadrill court applied that framework and let the claims proceed.
The Yellowstone Deadline Passed. Here Is the Lesson That Remains.
The New York Attorney General’s settlement with Yellowstone Capital and related entities resulted in a 1.065 billion dollar judgment, more than 534 million dollars in cancelled merchant debts, and a permanent bar from the sales-based financing industry. The claim deadline was January 9, 2026.
For business owners who were not Yellowstone clients, the lesson is the precedent. The New York Attorney General pursued and won a billion-dollar enforcement action against an MCA lender. The industry is not immune from accountability at scale.
State attorneys general now have a documented playbook. They saw what was possible. The next enforcement action will not need to invent its framework.
What Starting 2026 With These Two Events Means
The legal environment for challenging MCA enforceability is more developed than it has ever been. Courts are using a documented three-factor test. State attorneys general are pursuing enforcement at scale. Federal courts are allowing usury claims that the industry argued were unavailable.
None of this erases contracts already signed. It expands the legal leverage available to business owners who are represented by attorneys who understand how to use it.
What This Means for Your File
January 2026 set the tone. Two events landed in the same month. The same month courts validated the disguised-loan framework. The same month a state attorney general successfully forced more than half a billion dollars in MCA debt cancellation. That is not coincidence. That is direction.
The window for a controlled resolution is defined by how long before lender escalation a structured program is installed. 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.