Litigation

  • Unfair and Deceptive Trade Practices claims

  • Lender Liability

  • Civil Conspiracy

  • Fraud

  • Breach of Fiduciary Duties (Corporations and Limited Liability Companies)

Sample Litigation

  • A Borrower Under a Nonrecourse Promissory Note Was Freed From its Obligation to Pay Interest to the Lender.

    A non-SPE company borrowed $120,000,000 to purchase commercial real estate. The borrower signed a “non-recourse” promissory note and loan agreement that used New York law. A “non-recourse” loan means that the borrower has no personal liability to pay the principal balance of the promissory note. Instead, the lender looks to the value of the real property securing the borrower’s obligations if the loan defaults.

    After the property dramatically dropped in value due to market conditions, including the construction of newer competing facilities near the mortgaged property, the lender sued the borrower. The lender argued that the borrower was required to make interest payments, at the default interest rate, in perpetuity.

    The North Carolina court determined that the loan, by requiring interest payments on a non-recourse loan after default, violated New York public policy.

    The borrower settled for a fraction of the amount borrowed.

  • A Party to a Failed Joint Venture Settles for 95% of the Amount Owed.

    A party to a joint venture settled a case for 95% of the past-due payments that were due from its joint venturer. The joint venture agreement waived fiduciary duties, made the joint venturer responsible for maintaining the joint venture’s books and records, and made the client responsible for certain costs without providing a mechanism for reporting or reconciling such obligations.

    The joint venturer argued that it had no obligation to make any payment because the client owed the joint venture money and had committed fraud.

    Most of the joint venturer’s claims were dismissed by the court.

    The case settled for 95% of the amount claimed by the client.

  • Lender Liability Claims Fail.

    A publicly-traded company borrowed millions of dollars and pledged its real and personal property as security for the debt. When the borrower failed to make payments and the real property lost most of its value, the borrower sued the lender for various lender liability claims. The lender counterclaimed for the amounts due and for breach of contract.

    After the court rejected most the borrower’s lender liability claims, the lender obtained a favorable settlement.