Archive for Banking

7th Cir. Holds Bankers’ Professional Liability Policy Did Not Cover Excessive Fees Claims

The U.S. Court of Appeals for the Seventh Circuit recently affirmed the dismissal of a bank’s lawsuit against its insurer for breach of contract and bad faith denial of coverage, holding that the insurance policy’s exclusion for any claim based upon or arising from fees or charges applied to the facts alleged. The bank argued

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9th Cir. Limits Subsequent Good-Faith Transferee Exception in Bankruptcy Fraudulent Transfer Actions

The U.S. Court of Appeals for the Ninth Circuit recently held that a debtor corporation’s sole shareholder and third parties who sold real property and services to the sole shareholder could be liable for fraudulent transfers. In so ruling, the Ninth Circuit held that the third parties were initial transferees of the debtor corporation’s funds

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9th Cir. Holds Nevada Deficiency Limitation Preempted as to Transferees of FDIC

The U.S. Court of Appeals for the Ninth Circuit recently affirmed final judgments against corporate borrowers and guarantors in three separate cases, holding that: (a)  the Nevada statute limiting the amount of the deficiency recoverable in a foreclosure action was preempted by federal law as applied to transferees of the Federal Deposit Insurance Corporation (FDIC);

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2nd Cir. Remands False Claims Act Claim on Materiality of Bank’s Representations

The U.S. Court of Appeals for the Second Circuit recently remanded a federal False Claims Act lawsuit based upon alleged misrepresentations made by a bank when it applied to borrow funds from the Federal Reserve System’s discount window. The Second Circuit remanded the case to the trial court to determine whether the relators adequately alleged

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9th Cir. Holds Creditor in Fraudulent Transfer Action May Recover Amounts Above Collateralized Debt

The U.S. Court of Appeals for the Ninth Circuit recently held that, where husband and wife debtors fraudulently transferred assets, the creditor was entitled to the full sum the creditor would have recovered and was not limited to the amount of the collateralized debt. In so ruling, the Ninth Circuit reversed a bankruptcy court and

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8th Cir. Rejects Borrower’s Attempt to Hold Bank Liable for Alleged Bad Advice

The U.S. Court of Appeals for the Eighth Circuit recently rejected a debtor’s attempt to hold a bank liable for allegedly faulty advice provided in connection with various lending transactions, holding that the debtor could not claim reliance on the bank’s advice when the debtor had an ability to investigate the details of the transaction

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6th Cir. Questions Bank’s Contractual Limit on Liability for Fraudulent Checks

The U.S. Court of Appeals for the Sixth Circuit recently reversed the dismissal of a class action lawsuit filed by a bank account holder who asserted that the bank violated the Uniform Commercial Code 4-401 and 4-103(a), dealing with liability for fraudulent checks. The account holder experienced check fraud and the bank refused liability because

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9th Cir. Rules Mortgage Underwriters Not Exempt Under FLSA

The U.S. Court of Appeals for the Ninth Circuit recently held that mortgage underwriters were not exempt under the federal Fair Labor Standards Act (FLSA) and were therefore entitled to overtime compensation for hours worked in excess of 40 per week. After analyzing the specific details of the underwriters’ responsibilities, the Ninth Circuit panel concluded

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8th Cir. Rules on Bankruptcy Trustee’s Ability to Recover Overdraft Covering Deposits

In a bankruptcy preferential transfer dispute, the U.S. Court of Appeals for the Eighth Circuit recently held that the bankruptcy trustee could recover true overdraft covering deposits, while deposits covering intra-day overdrafts were not recoverable. A copy of the opinion in Joseph Sarachek v. Luana Savings Bank is available at:  Link to Opinion. A company filed for

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2nd Cir. Upholds Dismissal of Supposed ‘LIBOR Fraud’ Claims

The U.S. Court of Appeals for the Second Circuit recently affirmed the dismissal of LIBOR-manipulation fraud claims brought by a group of hotel-related entities and their investor against a bank and two of its subsidiaries. In so ruling, the Second Circuit held that: (a) the borrower and related entities lacked standing to sue because they

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Fla. Court Holds Alleged ‘No Lawful Basis to Debit’ Enough to State Claim Under Reg J and UCC Art 4A

The Circuit Court of the Eleventh Judicial Circuit in Miami-Dade County, Florida recently dismissed equitable and tort claims for restitution, “money had and received,” negligence, indemnification, tortious interference and conversion brought by a company against its bank for reversing a wire transfer due to fraud.  However, the Court refused to dismiss the account holder’s claim

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4th Cir. Holds Entire Arbitration Agreement Unenforceable Due to Faulty Choice of Law Provisions

The U.S. Court of Appeals for the Fourth Circuit held that a creditor’s arbitration agreement contained unenforceable choice of law provisions rendering the entire agreement unenforceable. Accordingly, the Fourth Circuit affirmed the trial court’s order denying the creditor’s motion to compel arbitration. A copy of the opinion in James Dillon v. BMO Harris Bank, N.A.

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