Sample Cases

Bank and attorney responsibilities
Issue: whether attorneys representing the bank had properly performed their duties in properly researching and perfecting the lender’s security interest in collateral that supported loans to a borrower.

Commercial bank loan structure
Issue: whether intercompany loans contained preferential terms that would have been available from a disinterested third-party commercial lender or investment banker.

Lead bank responsibilities in a syndicated credit
Issue: whether the lead bank properly performed its fiduciary responsibilities by 1) acting prudently in disclosing information to one or more participating banks, and 2) allocating the borrower’s loan payments to lenders in a proper manner.

Bank handling of non-negotiable collateral
Issue: whether the bank, in accepting certain non-negotiable collateral, utilized proper practices to safeguard the collateral while in its possession before returning it to the borrower.

Application of residential mortgage payments
Issue: whether the mortgage servicer acted properly and consistently in its 1) default notification, 2) decisioning on accepting/rejecting payments after default, and 3) application of payment proceeds on the borrowers’ obligation to the lender.

Loan terms on credit extended by a non-traditional lender
Issue: whether lending standards were appropriate when credit was not available from traditional banks due to difficulty in determining underlying collateral value and uncertainty in projecting cash flow within a reasonable time period.

Overdraft charges
Issue: whether the sequence of posting debit and credit transactions by the bank had a deleterious effect on overdraft fees charged to the account holder and was permissible under governing agreements and disclosures.

Prudent SBA loan underwriting and servicing standards
Issue: whether the bank followed Preferred Lender standards in making/servicing an SBA-guaranteed loan to an unsophisticated borrower.  

Loan to fund a portion of a construction project
Issue: whether the bank acted properly in approving a credit facility that provided funds to complete most of a project, then declined to make available additional funds to enable completion.

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