The recession has highlighted a new risk for borrowers – the risk that a lender will be insolvent and default on its obligation to fund loans under the credit agreement. This has created unexpected issues under credit agreements, which were written at a time when lender insolvency was not a perceived risk.”34
The failure of an FDIC-insured commercial bank, savings association or industrial loan company (collectively referred to as a “bank”) is traumatic and economically devastating to both stakeholders in the institution, as well as the local economy served by that entity.
A recent defeat by a student-loan creditor could turn out to be a victory for the industry overall.
On March 23, 2010, the United States Supreme Court decided an important case concerning a student-loan creditor’s motion to void a bankruptcy court’s judgment.1 The creditor brought this motion after initiating collection efforts and in response to the debtor’s request to cease and desist those efforts.
Once triggered by a debtor's bankruptcy petition, the automatic stay suspends a parties' right to commence or continue an action against property of the debtor’s estate. In general, a party can seek relief from the automatic stay for a variety of reasons, including for cause, lack of adequate protection or that the debtor has no equity in the property and the property is not necessary for reorganization. In a case of first impression, a district court in Pennsylvania has found that an injunction enforcing a non-compete provision in a franchise agreement was not a "claim" against t
USCA Ninth Circuit, September 23, 2008
California Coastal Commission, etc., et al. v. Michael A. Allen, ___ Cal. App. 4th ___ (Oct. 1, 2008, Case No. B197974)
During the second afternoon session of the first day of the PLUS D&O Symposium, the panelists discussed the complex underwriting issues that arise when the company to be insured is insolvent, in bankruptcy, or close to bankruptcy. The panelists discussed the following topics and provided the following insights: