Case Studies

Lender Liability and Prudent Lending

Provided expert testimony involving claims against a private lender in a leveraged buyout transaction. Issues involved disputes over lender’s right to exercise remedies under the credit agreement, covenant defaults, payment defaults, alleged mismanagement by the owner of the acquired entity and borrower, negotiation between the parties prior to acquisition, due diligence, negotiation of the credit agreement and security agreement, appropriate disclosure of material facts, content and structure of post-acquisition negotiations, borrower’s adherence to the credit agreement and security agreement, and related matters.

Directors’ and Officers’ Liability

Provided expert reports and testimony on behalf of the FDIC in settlement negotiations involving claims against former directors and officers of several failed banks. Issues involved unsafe and unsound banking practices, violations of law, failure to heed and respond to regulatory criticism, failure to properly evaluate and respond to real estate market conditions, failure to adhere to and abide by bank loan policies and/or failure to adopt appropriate loan policies, imprudent lending, concentrations of credit, breach of fiduciary duty, and indices of negligence/gross negligence.

Commercially Reasonable Banking

Provided expert report in connection with claims made by the receiver for a failed financial advisory group against a large multi-state bank for negligence, violation of account integrity, and conversion, by allowing an individual to improperly deposit of an official check purchased by an LLC (the financial advisory group) into an unrelated account of the individual at the same bank. Issues included industry standards of ordinary care, deposit account integrity, conversion, commercially reasonable standards on deposit account activity, teller operation standards, customary deposit relationship, identification of the customer, adherence to the bank’s own internal policies, and customary procedures for cancellation of an official check.