Addressing the Economic Crisis

As a result of the recent, almost unprecedented downturn in the United States economy, financial institutions are faced with difficult decisions about how they deal with their borrowers and other parties to loan and financing transactions. Borrowers, faced with extreme challenges to their businesses and the loss of the collateral they have pledged, are raising affirmative claims against their lenders and defenses to the payment of their financial obligations. Quarles & Brady has been helping such resolve similar matters for many years. In six offices across the country, our attorneys have helped to defend lenders, large and small.

More than 30 attorneys, spanning all of our offices and practicing in multiple legal disciplines — from commercial litigation, finance and bankruptcy to real estate, corporate services and others — work together on our national Lender Liability Task Force to protect our clients' interests. Whether we are helping to shield lenders from liability in the first place or defending them against claims in state and federal courts, lender liability defense has been a bedrock practice of Quarles & Brady in all of our offices.

A Sampling of the Lender Liability Experience of Quarles & Brady Attorneys

• Representing a New York investment fund in successfully defending two separate cases brought by commercial borrowers claiming that our client had intentionally interfered and acted in bad faith in allegedly controlling the administration of their loans from a lender acquired by our client. We won summary judgment in each case and an appeal by one borrower to the Ninth Circuit Court of Appeals.
  
  
• Representing a large federally chartered savings association in its defense of claims by a prominent real estate developer that the lender had breached the loan agreement and acted in bad faith by refusing additional advances to a condominium project under construction, but with significant cost overruns and the developer’s violation of several loan covenants.
  
  
• Counseling on lender forbearance agreements in situations involving significant commercial developments. In addition to the obvious need to memorialize the specific terms of the forbearance, these agreements provided an opportunity to wipe the existing slate clean, removing the borrowers’ claims of misrepresentation through oral communications and alleged waivers of the written terms of the loan agreements. The forbearance agreements recited consideration for a new package of very specific representations, warranties, and recitals.
  
  
• Representing a major national risk management company and its insurance broker subsidiaries, litigating claims against brokers involving property insurance coverage, especially business interruption and other time element losses. We have an unbroken string of trial victories in defending this client in multi-million dollar actions.
  
  
• Representing lenders in numerous Chapter 11 cases in pursuing secured claims and defending against the claimed right of Debtor-in-Possession to use cash collateral.
  
  
• Representing consumer lenders in defense of numerous statutory and common law claims, including claims under FCRA, FDCPA and TILA and the federal Holder Rule, in numerous state and federal trial and appellate courts across the United States.

The Lender Liability Task Force complements Q&B's other initiatives stemming from the financial crisis, namely: 

• The Financial Services Task Force, whose mission is to help our clients understand the opportunities and restrictions accompanying that legislation, as well as the Troubled Assets Relief Program, or TARP.
  
  
• The Stimulus Legislation & Opportunities Task Force, which is dedicated to assisting our clients to evaluate and understand opportunities arising from the American Recovery and Reinvestment Act of 2009 (the “Recovery and Reinvestment Act”).

For more information on how our Lender Liability Task Force can help you, please contact Don P. Martin at (602) 229-5700 or , or your Quarles & Brady attorney.