The California Court of Appeal determined that expanding a bank’s duties to include investigating and disclosing possible fraudulent activity was not warranted and that nonsuit in favor of the bank was properly granted. Kurtz-Ahlers, LLC v. Bank of America (Cal. Ct. App. May 8, 2020). Read more
Holding that Congress had no authority under either Article I or Section 5 of the Fourteenth Amendment to the United States Constitution to abrogate sovereign immunity for States that infringe on protected copyrights, the United States Supreme Court struck down the Copyright Remedy Clarification Act of 1990 (“CRCA”). In a discussion that may have a significant impact on the practice of Bankruptcy law, the Court affirmed that the Bankruptcy Clause is “unique” among Article I Clauses, suggesting that it would affirm its controversial Katz decision should the opportunity arise. Read more
Courtesy of CEB, we are bringing you selected legal developments in areas of California business law that are covered by CEB’s publications. This month’s feature is from the March 2020 update to Understanding Fiduciary Duties in Business Entities. References are to the book’s section numbers. See CEB’s BLS Landing Page for special discounts for Business Law Section members. The most significant legal developments since the last update include developments in such important topic areas as fiduciary duties in for-profit corporations; fiduciary duties in family businesses; duties of investment advisers and broker-dealers; breach of fiduciary duty litigation; and D & O insurance. Read more
The high-profile Chapter 11 of Sears produced another decision involving the high-profile Mall of America (“Mall”). MOAC Mall Holdings LLC v. Transform Holdco LLC (In re Sears Holdings Corp.), 2020 WL 2319194 (S.D.N.Y. May 11, 2020). Read more
Perez v. Mortgage Electronic Registration Services, 2020 WL 2312867 (9th Cir. May 11, 2020) follows a line of California appellate cases which hold that the owner of mortgaged property may not sue to stop a foreclosure based on a claim that the trust deed was not validly assigned to the foreclosing beneficiary. The case is another nail in the coffin of pre-foreclosure challenges based on the sometimes sloppy or unperfected transfers of mortgage documents. While that coffin may be closed, lenders still must peer into the very open casket of California’s Homeowner Bill of Rights, from whence such injunctions will rise again! Read more
Reversing the Bankruptcy Appellate Panel, the Eighth Circuit Court of Appeals recently held that a spouse’s earlier bankruptcy discharge did not retroactively extinguish the debtor’s joint and several liability for a fraudulent transfer judgment against the debtor and her spouse. Lariat Companies, Inc. v. Wigley (In re Wigley), 951 F.3d 967 (8th Cir. 3/9/20). Read more
The United States Supreme Court held that plaintiffs lacked Article III standing because, win or lose, they would still receive the exact same monthly benefits they are already entitled to receive. Read more
In Vincent Jue v. Maggie Liu, et al. (In re Liu), 611 B.R. 864 (9th Cir. BAP 2020), the U.S. Bankruptcy Appellate Panel of the Ninth Circuit ruled that: (1) an order denying a 11 U.S.C. § 109(g)(2) dismissal motion is final and immediately appealable; (2) non-statutory, equitable defenses are not available to a recipient of a preferential transfer; and (3) a California attachment lien obtained within the 90-day preference period automatically terminates upon the filing of a bankruptcy petition by operation of law. Read more
In Richards v. PAR, Inc., 2020 WL 1451906, the Seventh Circuit ruled that under the Fair Debt Collection Practices Act courts must look to state law to determine whether a repossession company has a present right to possess the property at the time it was seized. Read more
In Sterling-Pacific Lending, Inc. v. Moser (In re Moser), 613 B.R. 721 (9th Cir. BAP 2020), the Bankruptcy Appellate Panel for the Ninth Circuit held that the bankruptcy court abused its discretion in declining to rule on a lender’s adversary proceeding seeking a declaratory judgment that the lender’s attempt to collect fees awarded to it in state court litigation did not violate the debtor’s chapter 7 discharge injunction. The BAP directed judgment in favor of the lender on remand because the debtor had repeatedly conceded that there was no discharge violation. Read more