All sorts of businesses and individuals extend credit in one form or another in our economy. Lenders, whether they be banks or other types of financial institutions or individual lenders of money (or other forms of value, such as guarantees), or whether they be suppliers of products or services who agree to finance their accounts, may incur liability to their borrowers and others for breaches of their lending agreements, in the harmful or damaging enforcement or maintenance of their lending agreements, or in the wrongful or abusive exercise of their security agreements or in collection of the indebtedness. Lenders may also incur liability in the initial making of their lending agreements if their activities are predatory, usurious or otherwise wrongful.
Examples of the firm’s successful handling of lender liability claims include:
- Represented successful LLC and majority owner in trial before the U.S. Bankruptcy Court voiding hundreds of thousands of dollars of real estate mortgages and decided an “important and determinative question of Mississippi limited liability company and property law for which there was no previously controlling Mississippi Supreme Court precedent”. Established that minority partner in LLC had transferred without authority or consideration all of LLC’s real estate assets to an LLC controlled by the minority partner who had then mortgaged the property. Succeeded in having the Court set aside all of the subsequent real estate mortgages and restore free and clear ownership of LLC to original LLC. The case produced six (6) published decisions, all of which found in our clients’ favor. The case also set precedent which has been utilized as persuasive jurisprudence in six (6) other states.
- Successfully represented large North American heavy equipment parts distributor in securing arbitration verdict against international parts manufacturer that manufacturer had wrongfully breached its sales and financing agreement with distributor, awarding high six figure damages and securing favorable repayment terms on remaining amounts distributor owed manufacturer. Established that manufacturer had wrongfully and fraudulently terminated the contract, made demand for more far more money than it was entitled to, and that distributor had at all times performed its obligations under the long-term supply agreement with manufacturer. Successful decision saved client from insolvency or bankruptcy and preserved its future.
- Successfully negotiated discounted payoff agreement between borrower and bank reducing amount of indebtedness and obtaining release of real estate security claimed by bank. Successfully represented financing intermediary in suit by Mississippi municipality against intermediary and lender procured by intermediary for wrongful and unauthorized indebtedness. Obtained dismissal with prejudice of intermediary from claims of municipality and potential cross-claims of lender.
- Successfully represented heavy equipment parts supplier against retail parts distributor, to whom supplier extended credit, when distributor fraudulently made an undisclosed bulk sale of its assets. Filed an involuntary bankruptcy proceeding against purchaser and subsequently obtained virtually full payment of sums due parts’ supplier.
Representative clients include: Kenwood Capital LLC, Heavyquip, Mitchell Technical Services.