Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Good Faith Lender Has No Fiduciary Duty to Other Creditors Or Its Borrower
The Second Circuit recently handed down a key creditors' rights decision Sharp Int'l Corp. v. State Street Bank & Trust Co. (In re Sharp Int'l Corp. & Sharp Sales Corp.), 2005 U.S. App. LEXIS 5241(2d Cir. Apr. 1, 2005). The court affirmed the lower courts' finding that a secured lender was not liable for aiding and abetting management's breach of fiduciary duty, and not liable for receiving a $12.25 million loan repayment from a closely held borrower it correctly suspected of engaging in massive fraud. The decision limits the scope of a lender's duties to its borrower and other creditors. Absent the lender's participation in its borrower's fraud, the lender should have no liability on a fraudulent transfer theory or on any other basis at least in New York, where Sharp arose.
The Role of State Fraudulent Transfer Law in Federal Bankruptcy Cases
A trustee or Chapter 11 debtor in possession may attack a fraudulent transfer either under Bankruptcy Code (“Code”) '548 or under state law, made available to the trustee by Code '544(b) (trustee may avoid any pre-bankruptcy transfer voidable by unsecured creditors). See e.g., In re Image Worldwide, Ltd., 139 F.3d 574, 577 (7th Cir. 1998) (bankruptcy case construing UFTA and applying state law); In re Leonard, 125 F. 3d 543, 544 (7th Cir. 1997) (“if any unsecured creditor could reach an asset of the debtor outside bankruptcy, the Trustee can use '544(b) to obtain that asset for the estate[,] … Trustee need not name a specific creditor.”) Because of generally longer reach-back recovery periods, state fraudulent transfer law is more frequently relied on in this kind of bankruptcy litigation. When, for example, a debtor fraudulently transfers assets in New York 3 years prior to bankruptcy, the trustee cannot rely on Code '548, but must rely on state fraudulent transfer law to challenge the transfer. New York's statute of limitations for fraud suits ' 6 years ' will govern. See e.g., Buncher Co. v. Official Comm. Of Unsecured Creditors of Genfarm LP IV, 229 F.3d 245, 250-51 (3d Cir. 2000) (“When recovery is sought under section 544(b) … [t]he remedy … adopts the longer 'reach-back' provisions of state law.”); Seligson v. N.Y. Prod. Exch., 378 F. Supp 1076, 1106-1107 (S.D.N.Y. 1974) (pre-code case; if fraudulent transfer claim is brought under state law, that state's statute of limitations applies.).
Yachts, Jets, Horses & Hooch: Specialized Commercial Leasing Models
Defining commercial real estate asset class is essentially a property explaining how it identifies — not necessarily what its original intention was or what others think it ought to be. This article discusses, from a general issue-spot and contextual analysis perspective, how lawyers ought to think about specialized leasing formats and the regulatory backdrops that may inform what the documentation needs to contain for compliance purposes.
Hyperlinked Documents: The Latest e-Discovery Challenge
As courts and discovery experts debate whether hyperlinked content should be treated the same as traditional attachments, legal practitioners are grappling with the technical and legal complexities of collecting, analyzing and reviewing these documents in real-world cases.
Identifying Your Practice's Differentiator
How to Convey Your Merits In a Way That Earns Trust, Clients and Distinctions Just as no two individuals have the exact same face, no two lawyers practice in their respective fields or serve clients in the exact same way. Think of this as a "Unique Value Proposition." Internal consideration about what you uniquely bring to your clients, colleagues, firm and industry can provide untold benefits for your law practice.
Risks and Ad Fraud Protection In Digital Advertising
The ever-evolving digital marketing landscape, coupled with the industry-wide adoption of programmatic advertising, poses a significant threat to the effectiveness and integrity of digital advertising campaigns. This article explores various risks to digital advertising from pixel stuffing and ad stacking to domain spoofing and bots. It will also explore what should be done to ensure ad fraud protection and improve effectiveness.
Turning Business Development Plans Into Reality
This article offers practical insights and best practices to navigate the path from roadmap to rainmaking, ensuring your business development efforts are not just sporadic bursts of activity, but an integrated part of your daily success.