Blockchain and Financial Services Blog

Planning Commercial Collection Litigation: A Primer

Consider the common commercial loan collection situation: a business debt collateralized by relatively permanent collateral (real property or durable non-mobile equipment such as a printing press) and transient collateral (inventory, accounts receivable and cash).[1] Frequently, there is also potentially recoverable unsecured debt because the collateral is insufficient to pay the entire debt and (a) the collateral does not include all the borrower’s assets so it is possible to collect the unsecured debt from the borrower, and/or (b) there are unsecured guarantees[2] supporting the credit. What is counsel to do when the time[3] arrives to plan litigation? Read More ›

A Thoughtful Bankruptcy Lawyer’s Opportunity to Anticipate

A lawyer’s usual task is to help solve the client’s current problem: resolve a dispute; close a loan; obtain a permit; avoid a conviction; etc. Lawyers are so task oriented that some consultants advise us to have task specific engagement understandings and send dis-engagement letters when a task is complete. For bankruptcy lawyers representing individuals in a Chapter 13 bankruptcy, the task at hand is getting clients to and through a confirmed Chapter 13 plan with the promised debt relief and fresh start. Read More ›

Entity Receiverships and the Dangerous Federal Priority Statute

Lawyers representing creditors often compete with federal government claims against the same insolvent borrower/debtor.  There are several common federal statutes that impact these disputes including: 11 U.S.C. Section 507[1]; 26 U.S.C. Section 6321[2], et seq.; and 31 U.S.C. Section 3713.  Read More ›

Ohio’s Administrative (Not Judicial) Income Tax Liens

A federal tax lien arises when the Internal Revenue Service takes administrative action to note in its records that the taxpayer owes taxes – that is to say, when the tax debt is “assessed.” That lien attaches to all the taxpayer’s property and equitable rights to property as determined by relevant state law. 28 U.S.C. Section 6321. See https://www.blockchainandbanking.com/irs-liens-after-acquired-property-and-the-doctrine-of-choateness. Typically, assessment occurs when (i) the taxpayer files a return, (ii) the IRS adjusts a tax liability after an audit / appeal process, or (iii) the IRS files a “substitute return” for a taxpayer who failed to file a required return.[1]

[1]             See, Internal Revenue Manual section 4.12.1.1 titled “Nonfiled Returns.” Read More ›

Joinder of Claims in Commercial Foreclosure Litigation is a Choice

A prior blog post analyzed Green Tree Servicing v. Asterino-Starcher, et al., 2018-Ohio-977 (Franklin Cty. App., March 15, 2018), which advises, in part, “[a] foreclosure proceeding is a two-step process involving, first, the enforcement of a debt obligation, and, second, the creditor's right to collect against the security given by the borrower for that debt. . . . There is reason to distinguish the action on the note from the ensuing action against the associated collateral. The first claim involves only the maker of the note and the person entitled to enforce it. The second joins all those with an interest in the mortgaged property.” This article discusses what happens if a secured lender believes that quote and tries to collect the mortgage debt through two separate lawsuits. Read More ›

Appeals in a Foreclosure Case, an Empty Right in Ohio?

Foreclosure cases often proceed without participation or significant defense by the obligor / mortgagor because that party is without both any defense and any funds to pay counsel. That happened in Green Tree Servicing v. Asterino-Starcher, et al., 2018-Ohio-977 (Franklin Cty. App., March 15, 2018). In Green Tree Servicing, as sometimes occurs, a junior lienor had the motivation and resources to contest the foreclosure.[1]  Read More ›

Over Lawyering Danger: Sometimes the “Belt” Interferes with the “Suspenders”

Deal lawyers often seek to insure an outcome using multiple approaches simultaneously; this is colloquially labeled a “belt and suspenders” approach. Ohio’s Sixth Appellate District recently reminded us of the danger of over lawyering in an effort to secure a legal position. Read More ›

IRS Liens, After Acquired Property and the Doctrine of Choateness

Internal Revenue Service liens attach to all a taxpayer’s “property and rights to property, whether real or personal, belonging to such person.” 26 U.S.C. Section 6321.[1] A taxpayer’s “property” is determined by relevant state law, but federal law determines lien priority.  Read More ›

Do Prior Liens Attach to Property After the Fraudulent Conveyance Determination

Ohio Revised Code Section 1336.07 is Ohio’s codification of the “Remedies” section of the Uniform Fraudulent Transfer Act (“UFTA”).[1]  The first and primary remedy listed in O.R.C. Section 1336.07 (and the UFTA) is “avoidance of the transfer” that is improper under the statute. Read More ›

Danger: “Unlimited” Guaranty Covers Theft Losses Caused By Another

Guarantor was the spouse of a business owner. Spouse’s business opened a deposit account and a disbursement account at Bank 1. Later, Bank1 extended to Spouse’s business a commercial revolving loan with a borrowing limit of $135,000; that loan provided overdraft protection by funding the disbursement account if the business’ account balance went below zero. To obtain the $135,000 loan, Spouse and Guarantor executed an unlimited commercial guaranty. [1] Bank1 and Spouse executed multiple extensions of both the $135,000 commercial revolving loan. Read More ›

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Attorney Spotlight

William T. Repasky practices with the Litigation Department at Frost Brown Todd. He focuses on lending and commercial services; banking litigation and financial institutions.

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