Source: https://www.aciclaw.org/resources/news/all?page=10
Timestamp: 2019-04-18 22:24:20+00:00

Document:
Mortgage Anti-Deficiency protection can be waived.
Although Texas has a statute (Tex Prop. Code §§ 51.003-51.005) that protects against deficiency liability in certain circumstances, it also provides that the protections of the statute can be waived by non-individual (non-consumer) borrowers. Grace Interest LLC v. Wallis State Bank, 431 S.W.3d 110 (Tex. App.-Houston [14th Dist.] 2013) confirms that such a waiver can be given effect.
MERS Registration system does not contravene mortgage filing system law in Texas.
In a notable case by a county recording office against MERSCORP (the entity that maintains a system of records of assignments of mortgages), the court’s decision in March 2014 put to rest the last claim of the county and permitted the MERS system to operate as currently configured. Dallas County et al. v. Merscorp, Inc. et al., __- F. Supp. 3d ____, 2014 WL 840016, U.S. Dis. LEXIS 27200 (N.D. Tx. 2014) held that the Texas statute (Tex. Loc. Gov.
Minority Shareholder Oppression: Apparent changes in the Texas rules.
For several decades, the leading case in Texas in the area of oppression of minority shareholders in a corporation was Davis v. Sheerin, 754 S.W. 2d. 375 (Tex. App.-- Houston [1st Div.] 1988), which to some has become a seminal case in the area. In June of 2014, the Texas Supreme Court considered the general issue in the procedural context of a request for the appointment of a receiver of a corporation in a contest between a minority and the majority shareholders of the corporation. In that decision, Ritchie v. Rupe, ____ S.W. 3d. ____- (Tex.
In a September 18, 2014 order and decision in Securities and Exchange Commission v. Shaver et al., No. 4:13 CV 416 (E.D. Tx. 2014), the United States District Court for the Eastern District of Texas held that bitcoin is “money” and that a scheme involving bitcoin investment can be considered to be an investment contract under the Securities Act of 1933 and therefore securities liability (and liability under Ponzi scheme prohibitions) can attach. In November 2014, the U.S.
An insurance company retained a consultant to provide services in connection with the defense of an insurance claim. The insurance company had previously retained the consultant on multiple occasions. Each time the consultant accepted a job, including in the case at bar, it routinely confirmed the engagement by letter to which it attached standard “Terms and Conditions” that included a forum selection clause providing for exclusive venue for litigation between the parties in Texas.
A buyer and seller entered into an asset purchase agreement providing for the purchase of the seller’s assets. The asset purchase agreement referenced various “related agreements” that were executed as part of the purchase, including: (i) a promissory note executed by the buyer in favor of the seller’s president and sole shareholder; (ii) a guarantee of that note executed by the buyer’s parent company; and (iii) an employment agreement between the buyer and the seller’s president. Each of the four agreements contained a forum selection clause.
When a real estate development limited liability company owned by three members began struggling to meet its mortgage loan obligations, its lender agreed to modify the loan on the condition that each of the three members make additional contributions to the LLC. Only two of the members complied. Because the two funding members refused to advance the other member’s portion of the requisite contribution, the loan went into default.
Investors, directors, officers and shareholders of a corporate borrower sued a bank lender alleging that the bank had made misrepresentations to them in their capacity as potential investors. The plaintiffs alleged that the bank had said in a meeting with potential investors that it was “fully committed to providing all of [the borrower]’s short-term and long-term financial needs for growth.” The bank and the corporation entered into a factoring agreement pursuant to which the bank agreed to provide working capital to the corporation.
Three individual borrowers entered into two renewal mortgage notes with a bank, secured by real estate. On the same date, a related LLC as borrower entered into a renewal mortgage note with the bank on a separate loan secured by separate real estate. The three individuals also signed guarantees of all three notes. Each of the notes contained cross-default language, and the parties also concurrently executed two modification agreements expressly stating that all three notes were cross-collateralized and cross-defaulted.
A provision in an LLC operating agreement that prevented the company from filing for bankruptcy is deemed to be a “prepetition wavier” of bankruptcy protection, and thus void as a matter of public policy.
In In re Bay Club Partners, 2014 WL 1796688, 59 Bankr.Ct.Dec. 127 (Bankr. D. Or. 2014), the Bankruptcy Court for the District of Oregon held that the debtor, an Oregon limited liability company (“LLC”), had the authority to file for bankruptcy even though the LLC’s Operating Agreement specifically prohibited such a filing at that time. The Bankruptcy Court relied on well-established Ninth Circuit precedent that it is against public policy to allow a debtor to waive its pre-petition right to file for bankruptcy protection.
In Rockwood Select Asset Fund XI v. Devine, 750 F.3d 1178 (10th Cir. 2014), the Tenth Circuit held that a New Hampshire law firm’s opinion letter issued to its client’s lender in Utah did not subject the law firm to personal jurisdiction in Utah.
The classification of an arbitration award under the UCC in a bankruptcy case is determined by the nature of the underlying claim held by the debtor.
In In re C.W. Mining Co., 749 F. 3d 895 (10th Cir. 2014), the Tenth Circuit Court of Appeals held that a fully secured creditor’s post-petition transfer will not be avoided as an unauthorized transfer of estate property under § 549 of the Bankruptcy Code (the “Code”) or as a violation of the automatic stay under § 362(a) of the Code if the transfer caused no harm to the estate and avoidance would not benefit the estate.
Two competing interpretations of a “LIFO” clause can both be reasonable, and, even if one interpretation is more reasonable than the other, it does not mean the contract is unambiguous and that summary judgment is appropriate.
In Holladay Bank & Trust v. Gunnison Valley Bank, 752 Utah Adv. Rep. 21, 2014 UT App 17, the Court of Appeals of Utah (the “Court”) held that a district court erred in granting summary judgment to one party in a dispute over the terms of a contract, which included a “last in, first out” (“LIFO”) clause, without considering extrinsic evidence proffered by the other party because the contract terms were capable of more than one reasonable interpretation, and thus were ambiguous.
Contributed by Kevin Braun of Bingham McCutchen LLP:United States District Court for the District of New Hampshire holds that creditor’s sale of a repossessed aircraft at well below book value was commercially reasonable where there was no proof of diminished value due to non-repair or proof of bad faith on behalf of seller. Harley-Davidson Credit Corp. v. Galvin, 2014 U.S. Dist. LEXIS 123435 (D.N.H. 2014).
Contributed by Kevin Braun of Bingham McCutchen LLP:Lender’s perfected security interest in funds held by debtor was not extinguished, under Article 9 of the Massachusetts UCC, upon transfer of the funds from a bank deposit account to a court-ordered escrow account. Zimmerling v. Affinity Fin. Corp., 14 N.E.3d 325 (Mass. App. Ct. 2014).
Contributed by Kevin Braun of Bingham McCutchen LLP:Supreme Court of Rhode Island finds a so-called “commercial loan commitment fee” in a loan agreement to be part of the interest rate charged, leading to a violation of Rhode Island usury laws. Labonte (Am. Steel Coatings, LLC) v. New Eng. Dev. R.I., LLC, 93 A.3d 537 (R.I. 2014).
Dora Jimenez is an Assistant General Counsel at New York Life Insurance Company. Dora provides legal support to Private Capital Investors (the private debt investment arm of NYL Investors LLC, which is a wholly-owned subsidiary of New York Life Insurance Company) in connection with the private placements of secured and unsecured debt from domestic and foreign issuers.
Ralph Dudziak is a Chicago-based partner in Loeb & Loeb LLP's finance department and a member of the energy group. He focuses on private placements, project finance and development, leasing, secured lending and securitizations. Ralph’s wide-ranging financial practice serves several U.S. and international financing parties, including insurance companies, banks, leasing companies, investment banks, and other institutional investors, export credit agencies, renewable energy developers, and domestic and foreign borrowers and lessees.
Anthony Goodman is counsel with Babson Capital Management LLC where he advises internal business clients in connection with senior secured loans, mezzanine financings, project financings, private placements, private equity investments and credit tenant leases. Prior to joining Babson, Anthony was a member of the Transactional Finance Group at Bingham McCutchen LLP. Anthony is a graduate of the University of Colorado at Boulder and the University of Connecticut School of Law.
Jack R. Hayes is Of Counsel in the Washington, DC office of Steptoe & Johnson LLP. Jack advises financial institutions and other clients regarding U.S. economic sanctions, export controls, antiboycott, and anticorruption laws and regulations in the context of various international business transactions.
Payment of rent by administrators: the Game decision (Pillar Denton & ors v Jervis & ors  EWCA Civ 180).
A clear judgment in favour of landlords was handed down on 24 February 2014 by the Court of Appeal in the Game group litigation. This decision changes the position on when rent is payable as an expense of the administration and means that administrators can no longer exercise the tactic of putting companies into administration, just after a rent quarter day, in order to avoid paying rent for that quarter as an expense of the administration while retaining occupation.
UK Schemes - Stretching the Boundaries.
The growing number of foreign companies that seek to take advantage of the UK Scheme of Arrangement (a “Scheme”) is set to increase further as a result of two recent cases that have both stretched the boundaries applicable to Schemes and reiterated the willingness of the English courts (the “Courts”) to extend their jurisdiction to foreign companies looking to use a Scheme to compromise their creditors.

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