A new troubling case from California allows borrowers to present evidence of prior oral statements of a lender which contradict the terms of the written agreement between the parties with a standard integration clause. Marsha Houston of our Los Angeles office writes more about the case below.
The Newhall Land and Farming Company v. American Heritage Landscape, LP, et al. (In re Landsource Communities Development LLC, et al.) Adv. No. 09-51074 (KJC), (Bankr. D. Del., Aug. 30, 2012))
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In re 18 RVC, LLC, Case No. 812-72378-reg (Bankr. E.D.N.Y., Oct. 22, 2012)
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Lewis Brothers Bakeries Incorporated v. Interstate Brands Corporation (In re Interstate Bakeries Corporation), 690 F.3d 1069 (8th Cir. 2012)
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Inre Brooke Capital Corp., 2012 WL 4793010 (Bankr. D. Kan., Oct. 5, 2012)
In re Tracy Broadcasting Corporation, No. 11-1453 (10th Cir., Oct. 16, 2012)
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Custom and practice in Illinois with respect to mortgages has been to incorporate the note or other debt instrument by reference, rather than to disclose all of the financial terms of a loan transaction in the mortgage.
On December 31, 2012, Strategic Growth Bancorp Inc. (“Strategic Growth”), an El Paso, Texas-based bank holding company, acquired Mile High Banks (the “Bank”), a Colorado community bank, from the Bank’s parent, Big Sandy Holding Company (“Big Sandy”), through an auction process conducted pursuant to section 363 of the Bankruptcy Code. Davis Polk represented Strategic Growth and advised on the complex and overlapping bankruptcy, mergers and acquisitions, credit, tax and bank regulatory issues presented by the transaction.
Rejecting the formalistic approach, the Delaware Bankruptcy Court in Indianapolis Downs, LLC1 focused on the policies underlying the idea of the disclosure statement to uphold a post-petition lock-up agreement, entered into before approval of a disclosure statement, with sophisticated financial players who had access to the material information that the disclosure statement would have provided.
On January 31, 2013, the Bankruptcy Court for the District of Delaware in In re Indianapolis Downs, LLC1 declined to designate the votes of parties to a post-petition restructuring support agreement (i.e., a lock-up agreement), instead confirming the Debtors’ Modified Second Amended Joint Plan of Reorganization (the “Plan”) based on the votes of such parties.