Representative Matters
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Avoided a fraudulent consulting agreement
We successfully prosecuted a fraudulent transfer action in the U.S. Bankruptcy Court for Maryland. Our attorneys brought an adversary action arising out of a business sale against the purchaser and seller’s principals. The fraudulent transfer arose when the business seller’s principals received a consulting contract nearly equal to the sale price at a time when creditors of the business were owed hundreds of thousands of dollars. The Court found that the money paid under the consulting agreement belonged to the creditors, enabling the Trustee to pay creditors a portion of their claims.
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Proved an attorney conspired to defraud a lender
The U.S. Court of Appeals for the Fourth Circuit unanimously affirmed a finding that an attorney conspired with borrowers to defraud an SBA lender. The defendant had been found liable by the U.S. District Court for the District of Maryland. Our attorneys represented the lender in both the lower court and on appeal. The defendant was subsequently disbarred for her conduct.
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Recovered fraudulent transferred real estate
We prosecuted a fraudulent conveyance action to recover two homes, each of which was fraudulently transferred multiple times, and successfully objected to the debtor’s discharge.
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Commercial Lending Newsletters
August 2008 Print-Friendly Version Includes: Recoupment Costs Disallowed - Consumer Borrower Has Right To Prepay Loan Without Penalty, Guarantor Unable To Escape Liability For Debts After Entity Change, Notice Compliance Necessary To Avoid Presumption Of Commercial Unreasonableness, and more.
Summer
2008 Print-Friendly Version Includes: SOP Modernization - The
New SBA SOP 50 10 Effective August 1, 2008, Borrower's Evidence Of 'Bait and
Switch' Keeps Lender Fraud Litigation Alive, A Disclaimer of Agency Fails If
Agency Relationship Exists, Practice Tip - Sealing A 12-Year Statute Of
Limitations and more.
May 2008 Print-Friendly Version Includes: Lender Not Required to Foreclose on Real Property When Life Insurance Proceeds Are Used to Satisfy Debt, Assignee Can Enforce Note Despite its Loss by Assignor, Depository Banks Must Ensure Employee Has Responsibility Before Cashing Company Checks, Ambiguously Defined Terms in Loan Agreement Not Enough to Support Breach of Contract Claim and more.
April 2008 Print-Friendly Version Includes: Maryland Foreclosure Law Update, Dispute Over Amount Due Does Not Prohibit Judgement on Liability in Favor of Lender, Both Good Faith and Good price Required to Avoid Possibility of Fraudulent Transfer, and more.
March 2008 Print-Friendly Version Includes: Borrower Forced to Sing the Blues Despite Non-Recourse Nature of Loan, Lender who Misled Potential Borrower Regarding Loan Amount May Be Liable for Fraud, Personal Jurisdiction is Proper Even if Guarantor is a Resident of Another State, and more.
February 2008 Print-Friendly Version Includes: Omission of "Inc." From Financing Statement Cost Creditor Perfection; Bank's Internal Prime Rate Does Not Amount To Ambiguous Language; Relative Value of Alternatives Confirms Prepayment Fee Is Enforceable,
and more.
January 2008 Print-Friendly Version Includes: Affirmative Statements to Third Parties May Create Fiduciary Obligations; Contracts with Conflicting Obligations Not Per Se Ambiguous; A Loan From A Shareholder To A Corporation Does Not Create Personal Liability On Its Majority Shareholder; Tip of the Month: Pitfalls In Purchasing Loan Documents To Minimize Recordation Taxes,
and more.
December 2007 Print-Friendly Version Includes: Dealing with a Troubled Loan; Creditor Allowed to Pursue Both Judgement Lien and Foreclosure to Collect Debt; Parol Evidence Permitted To Prove "Sham" Loan,
and more.
October
2007 Print-Friendly Version Includes: Fee Limitation in Modification Agreement Found Not To Alter Fee Provisions in Loan Agreement; Arbitration Clause Does Not Require Separate Consideration; Guarantor Cannot Admit Evidence of Oral Misrepresentation if Contract Terms Are Clear; Loan Officer Not Liable to Participant,
and more.
September
2007 Print-Friendly Version Includes:
Recordation Gives Purchaser Notice of
Prior Security Interest; Guarantor Escapes Responsibility Following Corporate
Merger; A Guaranty Guarantied to Fail, and more.
August
2007 Print-Friendly Version Includes:
Oral Modification Claim Proceeds Despite “No Oral Modification” Clause; Individual Lender of Lending Consortium Cannot Take Action In The Event of Default; Guarantor Not Liable For Undecided Portions of Lender's Pending Litigation With Third Party;
and more.
July 2007 Print-Friendly Version Includes:
Consideration for Guaranty Comes from Underlying Contract, Acceptance of Post-Default Payment Does Not Necessarily Constitute a Waiver, Attorney's Fees Recoverable For Recouping Collateral For Satisfied Loans, and "Tip of the Month: Multi-Jurisdictional Borrowers."
June 2007 Print-Friendly Version Includes:
Pending Lawsuit is "Material Adverse
Condition," Parol Evidence Inadmissible if No Fraud Found, "Valid Business Interest" Defeats Claim of Infliction of Injury Without Justification,
and a Tip of the Month: Notary Acknowledgements.
May
2007 HTML Version
May 2007 Print-Friendly Version Includes:
Financing Statement Alone is not Sufficient to Create a Security Interest, Terms of Lease Enforceable Even Though Provisions Are Unreasonable, Corporate Borrower Can’t Use Usury as Defense to Late Charge, and Tip of the Month: The Importance of Landlord Waivers.
April
2007 HTML Version
April 2007 Print-Friendly Version Includes:
When Financing Statement Is Pre-Filed, Perfection Occurs Upon Execution of Security Agreement, Lender Can Pursue Prepayment Premium After Default, and Tip of the Month: The Proof Is In The Perfection.
March
2007 HTML Version
March 2007 Print-Friendly Version Includes:
Liability May Be Imposed on Lender for Cancellation of Closing, Merger Clause Bars Fraud Claim, California Appellate Court Allows Suspended Corporation To Defend Action and more.
February
2007 HTML Version
February 2007 Print-Friendly Version Includes:
Lender Has No Duty To Disclose Financial Information of Borrower to Guarantor, The Importance of Obtaining a Purchase Money Security Interest, Failure to Dispose of Collateral in a Commercially Reasonable Manner Bars
Recovery Under Article 9, and a practice tip on Commitment Letters.
January
2007 HTML Version
January 2007 Print-Friendly Version Includes:
Creditor Overcomes Challenge of Jurisdiction, Guaranty Does Not Extend To Certain Changes Made By Bank Without The Guarantor’s Consent, Vague Contract Terms Cannot Create Personal Liability and more.
December
2006 HTML Version
December 2006 Print-Friendly Version Includes:
Oral Evidence Admissible to Supplement Terms of Promissory Note, When Filing a Financing Statement, Make Sure Debtor’s Name is Correct, California Court Rejects Dealership’s RICO Claims, and more.
November
2006 HTML Version
November 2006 Print-Friendly Version Includes:
Attempt To Restructure Debt May Relieve Parties From Obligations Under The Note and Guaranty, Bank’s Waiver of Claims Against Borrower Does Not Relieve Guarantor’s Liability For Debt, Change of Business Form Extinguishes Guarantor’s Obligations, and Lender’s Choice of Law Contributes to Rejection of Guarantor’s Defenses To Nonpayment.
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We assist conventional and government backed lenders faced with troubled loans throughout the region. Our lawyers are members of the bars of Maryland, Virginia, the District of Columbia, Pennsylvania, New York and New Jersey.
The firm’s mission is to contribute significantly to our clients’ successes, by applying to each project sophisticated legal knowledge, a bias for practical solutions, thorough and thoughtful negotiating strategies, and resolute and dedicated representation. We begin by analyzing and understanding the existing loan documents, looking for flaws in title and lien perfection so that any defect can be cured before the borrower, its counsel or another creditor can interfere with the lien position. From there, we develop a strategy based on our client’s goal, whether it is restructuring, reinstatement or enforcement and liquidation. We staff each matter with the appropriate mix of transactional, litigation and bankruptcy attorneys, keeping in mind the client’s goals, the size of the loan, the venue and the projected recovery.
Restructuring/Workouts
A loan that is or is about to become non-performing poses a myriad of problems for the lender. In such cases, experienced, creative and proactive legal representation is a must if the lender is to maximize realization and recovery. We provide our clients with the framework to deal constructively with problem loans and bankrupt borrowers and work with borrowers and lenders to produce a “win-win” resolution of a problem loan. When necessary, we assist lenders in recovering and liquidating real and personal property collateral and litigation in state, federal, and bankruptcy courts, both locally, and in conjunction with local counsel, nationally.
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Loan Enforcement
We represent conventional, SBA and USDA lenders in loan enforcement proceedings throughout the region. By combining the knowledge gained through our representation of lenders in the origination of loans with the expertise of our litigation and bankruptcy practitioners, we provide efficient, effective representation of lenders seeking to compel borrowers to honor their promise to repay their debts. We enforce promissory notes, loan agreements and guaranties and recover and help dispose of real estate and personal property collateral in Maryland, Virginia, the District of Columbia and Pennsylvania.
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Bankruptcy
The filing of a bankruptcy petition often disrupts a careful game plan. Rather than viewing a borrower’s bankruptcy as an obstacle, we view it as an opportunity. If the borrower’s management has not been honest or honorable, the Bankruptcy Code gives us the opportunity to bring to light that misconduct and replace management. A sale of bankruptcy assets in a bankruptcy court can yield values that can not be achieved in a private or non-bankruptcy sale of distressed assets. Bankruptcy also gives borrowers the opportunity to close unsuccessful locations so that it can concentrate on those that are successful and repay its lenders from the profitable operations. We represent secured, undersecured and unsecured lenders, landlords and other creditors in proceedings before the U.S. Bankruptcy Courts, including as well as performing services in proceedings at the direction of U.S. bankruptcy trustees appointed by the courts.
Our lawyers are not only experienced bankruptcy attorneys, but also experienced trial attorneys, allowing us to present cohesive, cogent and persuasive arguments to the Court.
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Asset Recovery
In the event that a loan goes into default and a foreclosure action becomes necessary, we represent lenders (including acting as substitute trustees when appropriate) in foreclosure actions in Maryland, Virginia, the District of Columbia and Pennsylvania. In such actions we will review the title, prepare default and statutory notices and advertisements, including 25-day notice letters to the IRS, prepare documentation required by the courts and auditors, attend foreclosure sales, and prepare subsequent court filings and deeds of conveyance. When necessary, we pursue deficiency judgements and eviction proceedings. In addition, our attorneys possess the experience to handle any unique issues which may arise, including title defects, mechanic’s liens and land use questions.
We utilize the remedies afforded by state laws, including bringing replevin/detinue actions, pursuing assets through garnishment and attachment, supervising sheriff’s sales and commencing fraudulent conveyance actions.
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