Blockchain and Financial Services Blog

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 ›

How to Lose a Default Judgment Motion: Seek the Wrong Relief Too Soon

Defendant is a mother who received the news all parents of teenagers everywhere desire and fear: Congratulations, your daughter is admitted to college; but given the costs, she will need a loan to attend. According to Plaintiff’s complaint: Read More ›

A Cautionary Tale: Original Mortgagee’s Modified Loan Prevails Over Second Secured Lender

An Ohio residential loan and mortgage were made and recorded in 2008. After default, a foreclosure case was started, but not completed – it was dismissed without prejudice. Read More ›

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Attorney Spotlight

Vincent E. Mauer represents clients in commercial and business disputes with particular emphasis on financial institutions and instruments, including financial institution bonds, securities, insurance policies and commercial loans.

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