Business Law Insolvency Law Committee

Summary: The Wyoming Supreme Court has held that the members of an insolvent LLC do not owe fiduciary duties to its creditors, unlike the principals of an insolvent corporation. [Mantle vs. North Star Energy & Construction LLC, 437 P.3d 758 (Wyo. 2019).] Read more

Summary: A bankruptcy court in New York has held that a group of term lenders who received payment under a debtor-in-possession order could not invoke an earmarking defense to the estate's avoidance claims because the order itself authorized the estate to prosecute those claims. [In re Motors Liquidation Co., 2019 Westlaw 367170 (Bankr. S.D.N.Y.).] Read more

Summary: The Pennsylvania Supreme Court has held that a mortgage assignee's litigation manager was able to authenticate the business records created by the original lender, depending on the circumstances. [Bayview Loan Servicing LLC vs. Wicker, 2019 Westlaw 1388516 (Pa.).] Read more

Summary: The Seventh Circuit has held that under Wisconsin law, where a "limited remedies" provision would have deprived the non-breaching party of all of its remedies against the breaching party, the clause is per se unconscionable and is unenforceable. [Sanchelima International, Inc., vs. Walker Stainless Equipment Co., LLC, 2019 Westlaw 1552681 (7th Cir.).] Read more

Summary: The Fifth Circuit has held that two agricultural purchase money security interests were unperfected because the secured creditors' financing statements listed both the debtor's correct name and its DBA, thus making it impossible for the Secretary of State's standard search logic to pick up the filings. Further, the contractual choice of law clauses contained in the parties' invoices did not control the issue of lien perfection. [Fishback Nursery, Inc., vs. PNC Bank, N.A., 2019 Westlaw 1548823 (5th Cir.).] Read more

Summary: A California appellate court has held that a fraudulent transfer claim attacking a collusive stipulated judgment between a judgment debtor and his brother is not subject to the litigation privilege. [Chen vs. Berenjian, 2019 Westlaw 1397592 (Cal.App.).] Read more

Summary: A district court in California has held that a state statute invalidating contractual penalty provisions was inapplicable to a default interest rate clause contained in loan documents. [East West Bank vs. Altadena Lincoln Crossing, LLC, 2019 Westlaw 1057044 (C.D. Cal.).] Read more

Summary: A California appellate court has held that a judgment creditor conducting an examination of a judgment debtor may obtain a subpoena duces tecum directing the debtor's bank to produce evidence, even though no examination of the bank itself had been ordered. [Shrewsbury Management, Inc. vs. Superior Court, 2019 Westlaw 1109754 (Cal. App.).] Read more

Summary: A California appellate court has held that a purchaser of conditional sales contracts was liable for the debts of two defaulting vehicle dealerships because the senior inventory lender retained the vehicles’ title certificates. [Ron Miller Enterprises, Inc., vs. Lobel Financial Corp., Inc., 2019 Westlaw 1199523 (Cal.App.).] Read more

The following is a profile of the Honorable Mitchell D. Dembin, United States Magistrate Judge for the Southern District of California. Judge Dembin met with members of the Business Litigation Committee and the Insolvency Law Committee in his chambers at the James M. Carter & Judith N. Keep Courthouse in San Diego and discussed his personal and professional background, his appointment as a Magistrate Judge and his experience on the bench. Read more