Tag Archives: Banking Law

Proving Insolvency in Fraudulent Transfer Actions

There are two primary types of fraudulent transfers contemplated under Florida’s Uniform Fraudulent Transfer Act (“FUFTA”)—actual fraudulent transfers and constructive fraudulent transfers. When a debtor makes a transfer with “actual intent to hinder, delay or defraud” a creditor—that is, “actual fraud” under Fla. Stat. 726.105(1)(a)—insolvency of the debtor is largely irrelevant. Read Full Post

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Anti-tying Regulations: What Can a Bank Do and Not Do?

The state of Florida prohibits banks from using their own stock as collateral for extensions of credit. These prohibitions are known as anti-tying regulations. Tying is the practice of selling one product or service as a mandatory addition to the purchase of a different product or service. Read Full Post

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Remedies for Creditors Under FUFTA Chapter 726 – Part I: Who May Be Liable

Simply put, Florida’s Uniform Fraudulent Transfer Act (“FUFTA”) is a “powerful remedy.” See Brandon C. Meadow’s in-depth blog, Are Florida’s Fraudulent Transfer Claims Subject to Equitable Tolling? But what good is this powerful remedy if creditors do not understand what exactly it can do for them in light of misconduct by debtors? This blog post seeks to show creditors what rights and options they have for unwinding transfers and obtaining payback against those who assets were fraudulently transferred to. Read Full Post

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Loan Participation Agreements: Contract Drafting Perspectives for the Lead Bank

In a perfect world, all loans would be performing, and the lead bank and participant would share in the profits of a loan participation with minimal risk of loss. In the real world, a promising participation loan easily becomes a problem loan, and the lead bank and participant bank can find themselves embroiled in litigation against each other. Such litigation puts a substantial strain on the lead bank’s resources to enforce the loan documents against the defaulted debtor, at a time when the parties should be sharing resources for loss mitigation. One common reason a participant may sue a lead bank after borrower default is based upon the participant’s assessment of collectability. If the participant determines that the collateral is worthless or the borrower is otherwise judgment-proof, the participant may look to the lead bank to recover its share of participation in the failed loan. Read Full Post

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Are Florida’s Fraudulent Transfer Claims Subject to Equitable Tolling?

Many creditors are aware that Florida’s Uniform Fraudulent Transfer Act (“FUFTA”) is a powerful remedy used to avoid and unwind transfers of assets that debtors may make to hinder, delay and defraud their creditors. But what if you (the creditor) discover that your debtor made a transfer, and you didn’t know it was actually fraudulent under FUFTA until a year later? Your fraudulent transfer claims may be forever extinguished as being time barred, without a tolling period to account for the time that elapsed before the fraudulent nature of the transfer was discovered. Read Full Post

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Do Banks Owe a Fiduciary Duty in Florida?

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). Read Full Post

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Significant New Changes to the Rules of Discovery in Federal Court

The recent amendments to the Federal Rules of Civil Procedure (the “FRCP”) became effective on December 1, 2015, and they govern all cases pending and commenced on and after that date. The changes impact several rules of the FRCP, including those governing early case management, the scope of discovery, and preservation of electronically stored information (“ESI”). These amendments will undoubtedly have an effect on civil litigation practice. Key changes were made to the overall scope of discovery in an effort to address the increasing costs and considerable expense of resources involved in the discovery process. This article focuses on the changes to the rules of discovery and how those changes may affect civil litigation practice. Read Full Post

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Florida’s New Rules and Procedures Governing Mortgage Foreclosures

By: Brandon C. Meadows, Esq.

Lenders take heed: the Florida Supreme Court recently amended the Florida Rules of Civil Procedure governing mortgage foreclosures. Additionally, the high court promulgated several standard forms, which reflect the amended rules. The recent rule amendments and forms are in response to the recent legislation regarding mortgage foreclosures, including the new Section 702.015, Florida Statutes, which set forth the new pleading requirements for foreclosure complaints. The purpose of the statute is to “expedite the foreclosure process by ensuring initial disclosure of a plaintiff’s status and the facts supporting that status, thereby ensuring the availability of documents necessary to the prosecution of the case.” Read Full Post

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Considerations for an acquiring bank in Loss-Share transactions with the FDIC

The economy, to put it lightly, has not been the best in the recent years. One potentially lucrative by-product of the economic downtown was the opportunity for prospering banks to acquire failed banks from the FDIC at an incredible discount. The purchasing bank, in acquiring the failed bank, will likely enter into a Loss-Share Agreement (LSA) with the FDIC. Essentially, Loss-Share Agreements give the purchaser the benefit of the FDIC absorbing a large percentage of the losses realized on the acquired receivables. The purchasing bank, generally speaking, only incurs around 20% of the losses with the FDIC incurring the remaining 80%. While this seems like a “no-brainer” agreement, entering into a LSA—much like every contract—requires scrutiny to maximize revenue and avoid potential lawsuits. Beyond the general advice of reading every word prior to signing a contract, this Blog post identifies five things an inquiring bank needs to know about LSAs. Read Full Post

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Banking liability and avoidance of check scams: Enforcing deposit agreements when customers have been defrauded by Nigerian check scams

By: Charles B. Jimerson, Esq.

Stop me if you have heard this one: An attorney receives a call from a desperate potential new client. Somehow the business transaction this international client was dealing with has hit an unexpected bump in the road, and because the client is dealing with an international business set here in the U.S., the situation now requires the fine eye of an experienced business litigation attorney. The company the new client claims he works for and the debtor checks out so the attorney draws up representation papers and accepts the new client. Within no time at all the client calls and informs his lawyer a settlement to be paid to the lawyer’s trust account within days. Time is of the essence, and the client convinces the lawyer it needs the money wired as soon as the lawyer receives the money order or cashier’s check. Read Full Post

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