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News & Analysis as of

Bank of Delmarva v. South Shore Ventures, LLC, Del. Super., C.A. No. S13C-05-008 THG (Oct. 21, 2014)

The Superior Court granted the Bank of Delmarva’s (“Bank”) motion for summary judgment as to each of Defendant John E. O’Brien’s (“Defendant”) counterclaims. In 2005, Defendant along with South Shore Ventures, LLC (“Shore”)...more

Surety Bonds: Direct Claims v Derivative Claims – Who Knew?

New Bern Riverfront Dev., LLC v Weaver Cooke Constr., LLC (In re New Bern Riverfront Dev. LLC), 521 B.R. 718 (Bankr. E.D.N.C. 2014) – The debtor made claims against a surety that issued a performance bond in connection with a...more

The Importance Of Selecting An Available Arbitration Forum

The Eleventh Circuit affirmed a Florida district court’s denial of Cashcall’s motion to compel arbitration, as the forum selected in the parties’ loan agreement was not available. Appellee Abraham Inetianbor initially...more

Uses and Advantages of Delaware Statutory Trusts and Delaware Limited Liability Companies in Structured Finance Transactions

Over the past 10-20 years, a large number of secured equipment finance and asset securitization transactions have been structured using either a Delaware Statutory Trust (a “DST”) created pursuant to the Delaware Statutory...more

Sometimes it Depends on “Whose” Hand is in the Cookie Jar

In a lengthy and somewhat detailed decision, the California Court of Appeal for First District, in Pittsburg Unified School District v. S.J. Amoroso Construction Company, Inc., Case No. A138825 (December 22, 2014), held that...more

“Start Spreading the News”: Recent New York Regulations Impact Debt Collection and Default Servicing

Last month, the New York Department of Financial Services (“DFS”) finalized a regulation with a number of novel requirements affecting debt collection (including servicing delinquent loans) in New York. Previously, debt...more

Thoughts for Commercial Lending in 2015 and Beyond; Upcoming Changes and How Best to Prepare for Them

During the past year I have been asked many questions from clients concerning commercial lending, ranging from loan production issues to bankruptcy concerns and loan enforcement matters. In this blog I have tried to address...more

New Jersey Bankruptcy Court Holds That Mortgage Was No Longer Enforceable and Borrower Was Entitled to a “Free House”

Action Item: In light of this decision, lenders should ensure that foreclosures in New Jersey are filed within six years of the date of default. Failure to file a foreclosure within six years may cause the action to be barred...more

Illinois Supreme Court Agrees to Decide Whether Party's Own Apparent Neglect Can Lose Right to Set Aside Default

In the closing days of its September term, the Illinois Supreme Court agreed to decide a question relating to the operation of Section 2-1401 of the Code of Civil Procedure: under what circumstances is the apparent lack of...more

Low-income housing tax credit workouts and bankruptcies: Understanding the basics

Note: This post is the first in a continuing series on the Credit Report Blog on the subject of workouts and bankruptcies involving low-income housing tax credit (LIHTC) projects....more

New York Appellate Division Decision Provides Comfort for Secured Lenders Negotiating With Their Defaulting Borrowers

On October 28, the New York Supreme Court, Appellate Division – First Department affirmed the dismissal of claims brought by a defaulting borrower against its lender, Siemens First Capital Commercial Finance LLC*, in Whitecap...more

Vendees' Liens—Construction Lenders Beware!

A recent Arizona Court of Appeals decision highlights a lien priority risk for secured construction lenders when the financed project fails. The problem—known as a “vendee lien”—is most likely to arise when up-front deposits...more

Spouse-Guarantor Rule: A Split Between Federal Circuit Courts

When a closely-held entity applies for a loan, the financial institution usually requires the entity’s owner(s) to guaranty the loan. If the owner is married, the financial institution may also require the owner(s) spouse(s)...more

CFPB Report Finds Distressed Private Student Loan Borrowers Driven Into Default

On October 16, the CFPB released a report highlighting complaints by struggling private student loan borrowers who describe being driven into default....more

Reducing a Customer's Accounts Receivable in the Zone of Insolvency

Reuters, Bloomberg and Debtwire are all reporting negative financial information about your customer: "Bond ratings are down-graded, bond prices are falling, a likely “restructuring” to address the bond debt,...more

Commercial Restructuring & Bankruptcy Alert - October 2014

In this issue: - Judge Says That Stockton, California Can Cut Pension Obligations - Third-Party Releases – Better Make Sure They Are Adequately Disclosed - Lawyers Who Sign Proofs of Claims for Clients...more

Cohort Default Rates Decrease; Proprietary School Default Rates Decrease for Third Straight Year

Earlier today the U.S. Department of Education (Department) released the official three-year Cohort Default Rates (CDRs) for FY 2011. For the uninitiated, this is a measure of the number of students entering repayment in FY...more

Department of Education Extends CDR Relief to Schools With Borrowers Facing “Split Servicing”

In advance of the release of the official FY2011 Cohort Default Rate (CDR) data, the U.S. Department of Education (Department) announced that the Department has “adjusted how it calculates CDRs for any institution that...more

Another Court Rules That Availability of Make-Whole Premiums in Bankruptcy Depends on Governing Documents

In a recent bench decision in In re MPM Silicones, LLC et al., Case No. 14-22503-RDD (Bankr. S.D.N.Y. August 26, 2014), the Bankruptcy Court considered bondholders’ right to recover make-whole premiums (premiums paid for...more

What Happens If You Default in Your Divorce Proceedings?

In an interesting case, Clementi v. Clementi, Wife petitioned the court for sole ownership of the mortgage free marital home, estimated at $200,000, when her Husband failed to respond to her divorce complaint which resulted...more

Maine Supreme Court Addresses MERS Assignments and Payoff Amounts During Cure Periods

The Maine Supreme Court has been active in the last few months – issuing several decisions that will likely impact foreclosure actions in that state. The decisions covered a full range of foreclosure issues, from whether a...more

Mortgage Enforcement: Dot Those “i”s and Cross Those “t”s – Or Else

A chapter 13 debtor objected to the portion of a mortgagee’s claim consisting of expenses related to foreclosure of its mortgage. She argued that since the mortgagee failed to comply with notice requirements under the...more

Motion to Set Aside Default Where Defendant Waited Too Long to Obtain New Counsel

Plaintiff Fleet Engineers, Inc. ("Fleet") develops, manufactures, and sells after-market products for the trucking industry. Defendant Tarun Surti, the president of Mudguard Technologies, LLC ("Mudguard"), owns a mud flap...more

Open the Door! Why You Shouldn’t Avoid Being Served in Your Debt Collection Lawsuit

Over the years I have noticed that I revisit the topic of whether or not you should avoid the process server in your debt collection lawsuit. It is usually spurred on by a person I meet with in a consultation who had a...more

Claimant Must Exhaust Administrative Remedies Provided For In The Financial Institutions Reform, Recovery, and Enforcement Act of...

After defaulting on his Hawaii home mortgage with Washington Mutual Bank ("Wamu") and facing nonjudicial foreclosure, Todd Rundgren (Hello It's Me) and his wife, Michelle (collectively the "Rundgrens"), sued Wamu and JP...more

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