Business Law News 2020, Issue 2
- Business Law News Editorial Team
- Business Law News Table of Contents
- California Enacts Solution to Fund Utility Wildfire Liabilities
- Damages in Wildfire Litigation
- Disaster Resources Help the Survivors of California's Wildfires
- Executive Committee: Message from the Chair
- Executive Committee of the Business Law Section 2019-2020
- Hot off the Presses: California Further Regulates Out-of-State Adjusters in the Wake of Record-Breaking Catastrophic Losses
- Message from the Issue Editor
- Regulatory Information for Attorneys Impacted by the California Fires
- Standing Committee Officers of the Business Law Section 2019-2020
- State and Federal Tax Deductions for Wildfire Losses
- 2018-2019 Commercial Law Developments
2018-2019 Commercial Law Developments
Parts III (Guaranties), IV (Fraudulent Transfers and Voidable Transactions), and V (Creditor and Borrower Liability)
Steven O. Weise, Teresa Wilton Harmon, John F. Hilson, Stephen L. Sepinuck, Edwin E. Smith, and Lynn A. Soukup1
- Capital Finance LLC v. Rosenberg, No. 1:2017cv02107, 2019 WL 296706 (D. Md. 2019)âScope of guaranty determined under ordinary contract interpretation principles. In appropriate circumstances, "and" can be disjunctive and "or" conjunctive.
- In re Futterman, 602 B.R. 465 (Bankr. S.D.N.Y. 2019)âA guarantor had no defense under U.C.C. sections 9-610, 9-615(f), or 9-626 even though, shortly after the collateral was sold to the secured party pursuant to a process approved by the bankruptcy court, the secured party resold it at a higher price to the only other bidder at the sale. Article 9 applies only to dispositions conducted pursuant to its terms, not to dispositions pursuant to some other law, such as the Bankruptcy Code. Moreover, Article 9 does not apply to real property transactions and while there might have been some personal property included in the sale, under U.C.C. section 9-604 a creditor has the option to proceed under the applicable real property law if both real and personal property are involved, in which case the provisions of Article 9 do not apply. Finally, even if Article 9 did apply, because the sale procedures were approved by bankruptcy court, the sale was conclusively deemed to be conducted in a commercially reasonable manner. Nevertheless, the court retained the authority to invalidate the sale or reduce the amount of the alleged deficiency if, as the guarantor alleged, the secured party colluded with the other bidder during the sale.
- Branch Banking and Trust Co. v. Healthgrowth Credit, LLC, No. A-18-CV-783-RP, 2019 WL 3816293 (W.D. Tex. 2019)âA bank with a perfected security interest in guarantors’ accounts stated claims for conversion and unjust enrichment, among others, against a lender that subsequently purchased and collected on the accounts. The lender did not pay the bank merely because its payments to the guarantors were made directly to the guarantors’ deposit accounts at the bank.
- Bowers v. Today’s Bank., 347 Ga. App. 615 (2018)âA guarantor’s springing liability on a nonrecourse debt, which was to ripen if the collateral became subject to a "voluntary bankruptcy or insolvency proceeding," did not ripen when the debtor consented to the lender’s receivership proceeding. The term "voluntary" modified both "bankruptcy" and "insolvency proceeding," and the debtor’s consent to the lender’s actions did not make the proceeding a voluntary one.
- In re Republic Airways Holdings Inc., 598 B.R. 118 (Bankr. S.D.N.Y. 2019)âBecause the liquidated damages provisions in aircraft leases were unenforceable penalties, they could not be enforced against the guarantors of the leases. Although guarantors are generally permitted to waive affirmative defenses, and the unenforceability of the principal obligation is an affirmative defense, the invalidity of a contract based on illegality or public policy cannot be waived.