Don't Let Borrowers Turn the Tables: Assessing and Avoiding Lender Liability Claims
|Date / Time:
Despite recent improvements in the nationwide economy, credit markets are still tight and loan defaults remain high. As a result, both lenders and loan servicers are at risk for lender liability claims brought by borrowers, guarantors, and even third parties.
For years, these claims were used mainly as stall tactics during foreclosure and bankruptcy proceedings, but now they are increasingly used as leverage during workout negotiations. As the market improves and borrowers have more potential equity to protect, they are becoming even more aggressive in using these claims. Third parties have also become more creative in pursuing claims against lenders related to borrower misconduct.
This webinar will analyze the most common lender liability claims and highlight the areas during the life of a loan when such claims arise. Emerging theories of liability will be explored, including the recent resurgence in the use of civil RICO and the rise of claims against lenders related to fraud or other misdeeds committed by the borrower.
Equally important, you will be offered concrete, practical steps for avoiding lender liability claims. Senior management, loan officers, workout officers, special servicers, and counsel will be able to improve their ability to spot potential lender liability risks, assess claims asserted by borrowers, guarantors and third parties, and avoid lender liability claims, thereby avoiding unnecessary litigation and maximizing the lender's recovery in a challenging legal and economic environment.
Common Theories of "Lender Liability" – an Overview
Problem Areas During the Life of a Loan
- Contractual Liability
- Common Law Liability
- Statutory Liability
- Bankruptcy Considerations
- Loan Application, Underwriting and Documentation
- Loan Administration and Discretionary Clauses
- Borrower Default and Loan Workout Negotiations
- Foreclosure and Repossession
- Dealing With Guarantors
- Secured Lenders vs. Bankruptcy Trustees and Creditors Committees
Tips for Avoiding Lender Liability Claims (Or Winning Those You Don't Avoid)About The Presenters
- The Resurgence of Civil RICO Claims
- Lender Liability to Third Parties: the Rise of Claims Related to Borrower Fraud
Rachel M. Blise
Andrew J. Wronski
- Associate and business litigation lawyer with Foley & Lardner LLP
- Member of the firm’s Business Litigation and Dispute Resolution and Bankruptcy and Business Reorganization Practices
- Experience assisting clients in a range of complex commercial litigation matters, including contract disputes, antitrust litigation, and class action defense; as well as experience in the areas of insolvency, bankruptcy, and creditors’ rights
- Represented secured and unsecured creditors in bankruptcies, commercial and residential foreclosure actions, and other debt collection proceedings with respect to a variety of issues, including avoidance actions, lender liability claims, and bankruptcy sale transactions
- Prior to joining Foley, she was a judicial law clerk for the Honorable Carolyn Dineen King, U.S. Court of Appeals for the Fifth Circuit in Houston, Texas
- Wrote, "Another Thorn in the Semantic Briarpatch of the Hanging Paragraph: Is Negative Equity a Purchase Money Security Interest?" 93 MARQ. L. REV. 1217 (2010)
- Admitted to practice in Wisconsin and before the U.S. Court of Appeals for the Seventh Circuit, the U.S. Court of Appeals for the Fifth Circuit, and the United States District Court for the Eastern District of Wisconsin
- J.D. degree, summa cum laude, articles editor for the Marquette Law Review and participated in the National Appellate Advocacy Competition, Marquette University Law School
- Partner with Foley & Lardner LLP in Milwaukee
- Serves as the chair of the Milwaukee office Litigation Department, the firm’s largest assemblage of litigators, and is a member of the firm’s Litigation and Business Reorganization Practice Group
- Focuses on trial work involving complex, financial, commercial and insolvency-related litigation
- First-chaired complex litigation cases involving banking and finance, lender liability, commercial loan enforcement and workouts, insolvency-related litigation under the United States Bankruptcy Code and state law insolvency provisions, the Uniform Commercial Code, federal and state securities laws, the Racketeer Influenced Corrupt Organizations Act and other matters involving sophisticated commercial transactions
- In addition to counseling clients on lender liability, insolvency and other complex litigation matters, appears regularly in federal and state courts across the country and has tried jury cases in the Western District of Wisconsin, the Northern District of Ohio, the District of Arizona, the Southern District of Florida and Wisconsin state courts, as well as additional bench trials and proceedings before the American Arbitration Association
- Counsels clients and presents frequently on lender liability, workout and insolvency issues
- Member of the American Bankruptcy Institute and the Turnaround Management Association and is a member of the board of directors of the Milwaukee Bar Association
- B.A. degree, magna cum laude, Marquette University
- J.D. degree, summa cum laude, Order of the Coif and articles editor of the Minnesota Law Review, University of Minnesota Law School
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