Lender Beware: Ignore Suspicious Activity at Your Own Peril

Recently, the Seventh Circuit held that a lender who should have discovered that its borrower lacked authority to pledge assets is not protected by a good-faith defense to a fraudulent transfer action. Without this defense, the lender lost its security. Should the priority of the lender's claim should be further reduced through equitable subordination?

7 minute read July 01, 2016 at 11:46 AM
By
David Kupetz
Lender Beware: Ignore Suspicious Activity at Your Own Peril

In Grede v. Bank of New York Mellon Corp. (In re Sentinel Management Group, Inc.), 809 F.3d 958 (7th Cir.

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