What are the common challenges faced by financial institutions in their daily operations? Common issues include labor laws, cybersecurity, antitrust regulations, and securities. Asking banking litigation support to defend such cases can make or break a career. Here are some facts about banking litigation.
Defending lender liability claims
In recent years, the financial industry has experienced heightened instability and uncertainty, and borrowers, guarantors, and bankruptcy trustees have become more aggressive in asserting lender liability claims against their financial institutions. These claims can provide borrowers with leverage during refinancing negotiations, provide a bargaining chip in loan enforcement litigation, and enhance the recoveries of unsecured creditors during insolvency proceedings.
An anti-SLAPP motion is appropriate in a lender liability case. The borrower seeks to hold the lending institution liable for actions that arise out of litigation activity, including pre-litigation communications between the lenders’ lawyers and the filing, funding, and prosecution of a civil action. It is consistent with the doctrine of absolute litigation privilege. The motion will typically be granted when the plaintiff has failed to establish a retaliation claim against the lender.
Lender liability claims can be asserted on various tort and contract theories. They may arise from a breach of an oral commitment to lend or a written loan agreement. Hybrid claims of breach of contract may include claims based on oral representations and written loan agreements. As such, the defense is more complex than the litigation itself. The burden of proof is primarily on the plaintiff to establish that the lender was aware of the substantial risk of damages before it took action.
Defending securities fraud claims
A defense strategy based on a robust disclosure process is the best approach for defending securities fraud claims in banking litigation. The most effective defense strategy relies on the defendants’ reliance on a comprehensive process. As an example, a securities fraud claim against AmTrust Financial Services, for instance, would require a defendant to show it relied on a “robust” disclosure process. n.
Defending loan servicer liability claims
Our attorneys have experience defending financial institutions in mass litigation and individual actions involving fraudulent mortgage practices, improper assessment of post-petition fees, and failure to maintain insurance on escrow accounts. We have also defended loan servicers in hundreds of lawsuits alleging failure to follow the terms of mortgages and notes. As a result, we are familiar with the nuances of banking litigation and know how to use our legal skills to minimize your exposure effectively.
One of our clients defended a national bank in a class action against the lender. The lender was accused of fraud and suppression of evidence, breach of fiduciary duty, conversion, and trademark infringement. The client recovered more than $100 million in debt owed to financial institutions. In addition, a bank successfully defended a national lender against a breach of contract claim brought by a former employee. We won a favorable resolution for both banks.