The Bottom Line

The Bottom Line

In an opinion dated Jan. 10, 2020, Bankruptcy Judge Craig A. Gargotta of the Western District of Texas (San Antonio Division) held that a creditor who submits a proof of claim in bankruptcy waives its right to a jury trial, regardless of whether the creditor has couched its claim in protective language purporting to reserve its right to a jury trial. See Schmidt v. AAF Players LLC (In re Legendary Field Exhibitions LLC), 19-05053 (Bankr. W.D. Tex. Jan. 10, 2020).

What Happened?

Background

The Bottom Line

On Jan. 17, the U.S. Court of Appeals for the Second Circuit vacated the decision of the District Court for the Southern District of New York in Marblegate Asset Management, LLC v.

A lender cannot rely on its subjective intent in claiming that an otherwise properly filed UCC termination is ineffective, according to a recent decision by the United States Court of Appeals for the Second Circuit. Put another way, if a lender authorizes a termination statement, the termination is valid upon filing such UCC-3 even if the authorization was mistakenly given. While this result is not surprising, it does put lenders (and their counsel) on notice to be diligent in reviewing and authorizing the filing of UCC termination statements.