Financial Services Litigation
Our Firm's trial lawyers represent banks and other financial institutions in a variety of complex litigation matters and counsel clients on how to avoid litigation.
LENDER LIABILITY
We have extensive experience in lender liability problems. Our work includes representing financial institutions in lender liability suits as well as advising banks on how to best conduct business to minimize the risk of lender liability litigation.
LOAN WORKOUTS
Our litigators offer an unusual depth of experience as counsel in problem loan and problem investment situations, including successful litigation and workouts on multimillion dollar loans for the United States' largest savings and loans and other institutions. For banks and thrifts with pervasive loan problems, we provide supervision of regular collection counsel; access to experienced workout consultants; vigorous prosecution of major loans recoveries by UCC sale, foreclosure or judgment; and pursuit of fidelity bond and other insurance claims where appropriate.
REGULATORY ISSUES
We have extensive experience working with the management and owners of troubled financial institutions in informal negotiations and formal administrative proceedings by state regulators, the FDIC, the Comptroller of the Currency, the Federal Reserve and the federal thrift regulators. We have been particularly effective in negotiating capital plans and other remedial undertakings by institutions under substantial pressure from their regulators. Our lawyers have represented purchasers of the assets of closed banks at FDIC auctions and are familiar with the unique problems attendant to such transactions.
OFFICER AND DIRECTOR LIABILITY
We counsel bank and thrift executives who may face serious personal liability for errors and omissions or failure to adequately supervise others. We place particular emphasis on issues involving surety bonds, directors' and officers' insurance and bylaw indemnification.
Our lawyers have extensive experience defending individual officers and directors of financial institutions in regulatory actions and private suits against owners and management for alleged mismanagement, negligence and fraud.
EVERYDAY OPERATIONS
In addition to significant litigation issues, our litigators can assist banks and other institutions in everyday disputes arising from matters of loan contract interpretation; federal preemption of state and local law concerning the regulation of thrifts, banks and other financial institutions; truth-in-lending; letters of credit; certificates of deposit; lien priority; guarantees and other instruments.
REPRESENTATIVE FINANCIAL INSTITUTIONS LITIGATION EXPERIENCE
- Representation of a savings and loan client as a plaintiff in the supervisory goodwill litigation against the United States in the Court of Federal Claims. While most of the 125 "goodwill" cases are stalled, we have obtained summary judgment on liability and completed a trial on damages.
- Serving as special counsel to an Oklahoma thrift in a four week jury trial in Colorado on a lender liability lawsuit by three real estate developers. We were retained one week before trial to revamp the defense of a case with clear liability and a claim for $26 million in punitive damages. The jury awarded only actual damages of $6 million and we negotiated a $2 million settlement during the appeal.
- Representation of the bank trustee of the United States' third largest ESOP in a class action alleging misconduct in establishing the ESOP and in voting at contested shareholder elections. This case was settled with no contribution by or relief against the bank.
- Coordination of the representation (through several law firms) of an Illinois bank with serious problem loans involving a fidelity bond claim, a lender liability lawsuit, a shareholders' derivative lawsuit, and an investigation by a special committee of the board of directors. The lawsuits were dismissed and the fidelity bond claim paid without litigation.
- Representation of an $11 million judgment creditor of an Alaskan bank in negotiating a settlement agreement with the bank, the Comptroller of the Currency and the FDIC for a $3 million payment the day before the bank was closed.
- Representation of banks as fiduciaries in numerous trust construction and trust reformation proceedings and advising bank trust departments on investment issues, ESOP administration and related matters.
- Defense of OCC civil money penalty proceedings for outside directors of a Michigan bank on bank holding company transactions, and for directors of an Illinois bank on a $6 million legal lending limit violation; both proceedings were resolved with no penalties.
- Representation of Illinois, Kansas and Alaska banks and thrifts in regulatory negotiations and administrative proceedings concerning capital and operating problems.
- Representation of a major savings and loan association in a variety of lawsuits arising from more than 100 fraudulent mortgage loans which were made by a dishonest loan officer and resulted in millions of dollars of losses. These loans were FHA-insured, and we defended a charge by the Department of Justice and Housing and Urban Development Agency under the False Claims Act. This litigation was settled on terms very favorable to the client. Additional matters included the client's claim against its fidelity bond insurer, which was also settled on favorable terms, and representation of the client in litigation against participants in the fraud.
- Representation of an Illinois savings and loan association in a lender liability case. The trial in a Colorado state court, in which our client was represented by other counsel, resulted in a judgment of more than $25 million against the client. We handled the appeal, and the Colorado Supreme Court reversed the adverse judgment.
- Representation of a large Illinois savings bank, which had purchased millions of dollars of whole loans on the secondary market, in litigation against the selling institution and certain of its officers. The loans had been procured through fraudulent application documents. The defendant institution became insolvent and went into receivership. Before trial, we settled our client's claims against the officers with their D&O insurance carrier.
- Representation of a savings and loan association and certain officers and directors in a wrongful termination suit brought by its former chief executive officer. The trial court granted a motion for summary judgment, and the appellate court affirmed.
- Representation of a large midwestern bank as the mortgagee in a contested foreclosure case involving a sizable real estate development. Following numerous motions and hearings, our client prevailed on all counts.
- Representation of a downstate Illinois bank in a coverage dispute with its bonding company relating to losses on loans made by a dishonest employee. A favorable settlement was obtained.
- Representation of the officers and directors of another downstate bank in a lender liability case where our motion to dismiss all claims against them was granted. We then became lead counsel in the defense of similar lender liability claims against the bank.
- Representation of a major Chicago bank in a Securities and Exchange Commission (SEC) investigation regarding the issuance and sale of municipal bonds. The SEC brought no charges against our client.
- Representation of numerous banks and savings and loan associations in regulatory matters including loan loss reserves, replacement of officers and directors, supervisory board meetings, consent agreements and supervisory mergers.
The above list is not exhaustive. McDermott, Will & Emery has represented banks and other financial institutions in a variety of complex litigation matters and regularly advises clients on how to avoid litigation. Our attorneys lecture at seminars for bankers and accountants on lender liability and bank regulation, and have published numerous articles. One of our partners is a member of the Regulatory Enforcement and Director Liability Subcommittee of the American Bar Association Banking Law Committee.
Our lawyers who work on financial institution litigation and regulation regularly call on the experience of other partners in such areas as taxation, UCC documentation, trust administration, corporate finance, employee benefits regulation, and bankruptcy and creditors' rights.
Contacts
- Gordon A. Greenberg
+1 310 551 9398
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