The Nevada Supreme Court recently affirmed a lower court’s decision that a foreclosure under a Nevada statute giving “super priority” to homeowners’ association liens was preempted by the Housing and Economic Recovery Act of 2008 (“HERA”) in a foreclosure in which the Federal National Mortgage Association (“Fannie Mae”) held a mortgage. SeeSatico Bay LLC Series 9641 Christine View v. Fed. Nat’l Mortg. Assoc., 2018 WL 1448731 (Nev. Mar. 21, 2018). In 2004, the borrowers purchased a property with a home loan that was secured by a deed of trust on the property.

In In re Nilsson, 129 Nev. Adv. 101 (December 26, 2013), the United States Bankruptcy Court for the District of Nevada certified the following question to the Nevada Supreme Court:

The Ninth Circuit Court of Appeals held on July 27, 2009 in Boucher v. Shaw that individual managers of a bankrupt corporation can be held liable to the corporation's former employees for unpaid wages under the federal Fair Labor Standards Act ("FLSA").

On July 27, 2009, the U.S. Court of Appeals for the Ninth Circuit held that a corporation's managers can be held personally liable under the Fair Labor Standards Act ("FLSA") for wages that the corporation failed to pay to employees prior to the employer's filing for bankruptcy. This opinion serves as a cautionary reminder of the risks managers potentially face when a corporation files for bankruptcy and has failed to pay its employees for all wages earned prior to the filing.

In today's difficult economic climate, a growing number of companies have been forced to consider or even file for bankruptcy. Such filings may result in a stay of legal claims against the company, including those brought by current or former employees under the Fair Labor Standards Act (FLSA). But according to the Ninth Circuit, a company's filing for bankruptcy does not protect its individual executives and managers from potential liability under the FLSA.