News Archive

Posted: December 11, 2014
Renewal you membership with the ACIC for 2015!Renew HEREIf you have any questions, please contact:ACIC Administrative OfficeRichard Rejinooffice@aciclaw.com972-233-9107 x.211
Posted: November 17, 2014
Early in 2014, the Bankruptcy Court for the Southern District of Texas held that interests that facially meet the requirements for overriding royalty interests (and therefore have a particular preferred status under the Bankruptcy Code) can be recharacterized as financings, and therefore outside the scope of that protection. NGP Capital Resources Company vs. ATP Oil & Gas Corp. (In re ATP Oil & Gas Corp.).; Case No. 12-03443 (Bankr., S.D. Tex. January 6, 2014).
Posted: November 17, 2014
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.
Posted: November 17, 2014
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.
Posted: November 17, 2014
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.
Posted: November 17, 2014
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.
Posted: November 17, 2014
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.
Posted: November 17, 2014
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.
Posted: November 17, 2014
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.
Posted: November 17, 2014
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.
Posted: November 17, 2014
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.
Posted: November 17, 2014
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.
Posted: November 17, 2014
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.
Posted: November 16, 2014
In Millennium Bank v. UPS Capital Business Credit, 327 P.3d 335 (Colo. Ct. App. 2014), the Colorado Court of Appeals held that an arbitration award recovered from a supplier of defective paint under a breach of warranty cause of action was not proceeds of an “account”, but rather proceeds of a “general intangible.”
Posted: November 16, 2014
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.
Posted: November 16, 2014
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.
Posted: October 9, 2014
Courtesy Jack Hayes and his colleagues at Steptoe & Johnson, LLP.  Read the original article here: http://www.steptoe.com/publications-9852.htmlOn September 12, 2014, the United States and the European Union issued new sanctions against Russia, including sanctions targeting the Russian financial, energy, and defense sectors.New US SanctionsOFAC Trade Restrictions
Posted: October 8, 2014
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).
Posted: October 8, 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).
Posted: October 8, 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).
Posted: August 5, 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.
Posted: August 5, 2014
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.
Posted: August 5, 2014
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.
Posted: August 5, 2014
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.
Posted: August 5, 2014
I hope this note finds everyone well and enjoying some well-deserved summer vacation time with family and friends.  Following our terrific Spring Forum in Chicago, the Trustees met on June 6th for their summer meeting.  We had a very productive meeting, the highlights of which included fleshing out the program for our Annual Meeting with our co-chairs Yves Denize (TIAA-CREEF) and Charles Kolin (Greenberg Traurig) – “The Search for the Missing Yield: Where in the World is My ROI?” is certain to be a compelling adventure.   Please plan on joining us October 16  & 17th at the Times Square

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