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Do Banks owe a Fiduciary Duty in Florida?

September 13, 2016 Banking & Financial Services Industry Legal Blog

In order to state a cause of action in Florida for breach of fiduciary duty, there must exist a fiduciary duty, a breach thereof, and resulting damages. Gracey v. Eaker, 837 So. 2d 348, 353 (Fla. 2002). In Doe v. Evans, 814 So.2d 370 (Fla. 2002), the existence of a relation of trust and confidence between parties was sufficient to establish the presence of a fiduciary relationship. Id. at 374, quoting Quinn v. Phipps, 113 So. 419, 421 (Fla. 1927).

Consumer Financial Protection Bureau Compliance: What Banks Need to Know, Part II

August 29, 2016 Banking & Financial Services Industry Legal Blog

CFPB Regulation Enforcement The CFPB is authorized to conduct investigations to determine whether any person is, or has, engaged in conduct that violates federal consumer financial law. The investigations often include subpoenas and other investigative demands for testimony, responses to written questions, documents, or other materials. Once a potential violation […]

Consumer Financial Protection Bureau Compliance: What Banks Need to Know, Part I

August 18, 2016 Banking & Financial Services Industry Legal Blog

What is the CFPB? The financial crisis of 2007-08 triggered a substantial adjustment in the federal government’s regulation of the banking and lending industry; one notable result being the establishment of the Consumer Financial Protection Bureau (CFPB) under the Dodd-Frank Act (the Act) in 2010. The general goal of the […]

Assignment for the Benefit of Creditors: Stay of Litigation

July 22, 2016 Banking & Financial Services Industry Legal Blog

This is the first of three follow up blogs to our earlier publication Assignment for the Benefit of Creditors: General Overview. This blog explores ABC’s lack of statutory automatic stay and whether there is a functional and practical equivalent. The next blog will discuss whether a creditor may file a claim after the statutory 120-day deadline. The third blog will examine whether a creditor may file a claim of fraudulent transfer against the estate.

Vendor’s Checklist When a Customer Files for Bankruptcy

June 1, 2016 Banking & Financial Services Industry Legal Blog

Many vendors have had the unfortunate experience of a customer filing for bankruptcy. If it hasn’t happened to you yet, it probably will at some point in the future. There are certain steps a vendor should (or must) take to protect itself and maximize its opportunity to collect any debts owed by the customer. Vendors that take advantage of these protections can maximize recoveries, better preserve their positions in their dealings with the debtor, and avoid pitfalls inherent in the bankruptcy process. Vendors, and their attorneys, should use this checklist and take immediate action when a customer files for bankruptcy.

Why Courts in the Eleventh Circuit Should No Longer Apply Denham’s Small and Recurring Numerosity Exclusion

May 11, 2016 Banking & Financial Services Industry Legal Blog

An involuntary bankruptcy case is typically commenced by a petition joined by at least three petitioning creditors. However, an involuntary petition may be filed by a single petitioning creditor if the debtor has 11 or fewer “qualified” creditors. This is often called the “numerosity” requirement. The Bankruptcy Code, in Section 303(b)(2), expressly defines which creditors count in the numerosity requirement. In determining whether there are 11 or fewer creditors, certain creditors are ignored, including (a) any employees of the debtor who are also creditors, (4) any “insiders” of the debtor who are creditors, and (3) any creditors who received voidable transfers under §§ 544, 545, 547, 548, or 724(a) of the Bankruptcy Code.

Assignment for the Benefit of Creditors: General Overview

February 4, 2016 Banking & Financial Services Industry Legal Blog

If you are considering bankruptcy for your insolvent business, an Assignment for the Benefit of Creditors (“ABC”) might be your answer. An ABC is a less expensive, quicker, quieter, and simpler alternative to traditional bankruptcy. An ABC is a state law procedure utilized to liquidate a failed, insolvent, or no longer viable business. Fla. Stat. § 727.101. An ABC is normally much simpler and usually less expensive than a comparable bankruptcy proceeding. This savings means larger payouts to both unsecured and secured creditors. This blog provides a general overview of the ABC process, and highlights a few benefits of ABC as compared to a Chapter 7 bankruptcy.

Unwinding Fraudulent Transfers and the Diligent Creditor Rule

January 4, 2016 Banking & Financial Services Industry Legal Blog

Quite often a creditor discovers that one of its debtors has avoided satisfying a liability by fraudulently transferring assets to another individual or entity. This is a frustrating discovery, but the creditor is not without remedies. Under Florida Statutes fraudulent transfers can be attacked and unwound through two methods. The popular method is filing a lawsuit to include a statutory cause of action to invalidate the fraudulent transfer under Chapter 726, Florida Statutes. A lesser used approach is through a post-judgment procedure known as proceedings supplementary under Section 56.29, Florida Statutes. This blog post discusses these two differing approaches for unwinding fraudulent transfers, when proceedings supplementary is the preferable approach, and a related doctrine of Florida common law known as the Diligent Creditor Rule.

Evicting Tenants After Foreclosure

August 17, 2015 Banking & Financial Services Industry Legal Blog, Real Estate Development, Sales and Leasing Industry Legal Blog

Lenders should be aware of a new Florida law, which requires lenders to provide existing tenants with at least thirty days to vacate the property after the foreclosure sale. Florida Statute § 83.561, titled “Termination of Rental Agreement Upon Foreclosure”, became effective on July 1, 2015. The law replaces a recently expired federal law titled Protecting Tenants at Foreclosure Act. As such, the implementation of this new Florida statute may come as no surprise to lenders. However, lenders should understand their statutory rights and responsibilities prior to evicting tenants after foreclosure.

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