Blockchain and Financial Services Blog

Showing 219 posts in Bankruptcy & Banking Law.

Key Points for Bankers Concerning Federal Income Tax Filing Requirements When Discharging a Debt

As the 2015 tax filing season begins, it is important that individuals and businesses understand their reporting and filing obligations under the federal income tax laws.  In certain situations where a financial institution discharges a debt, a Form 1099-C, Cancellation of Debt, must be filed with the Internal Revenue Service on or before February 28, 2015 (March 31, 2015 if electronically filed).  Generally, for debt that was discharged during 2014, a creditor must file a Form 1099-C when the following three conditions are met: (1) the debt discharged was $600 or more; (2) the creditor is an applicable entity; and (3) an identifiable event has occurred. Read More ›

Protecting Your Bank Against Ponzi Scheme Claims Related to Deposit Accounts

When victims of Ponzi schemes, also referred to as fraudulent investment schemes, cannot collect from the persons who committed the fraud and "stole" their money, they often look to the bank that handled the deposit account used in the fraud as the deep pocket for recovery. After the July 30, 2013 decision in Parlin Fund LLC, et al., v. Citibank N.A., Case No. 1:13-CV-111, 2013 U.S. Dist. LEXIS 106511 (S.D. Ohio, July 30, 2013, J. Beckwith), individuals damaged by investing in Ponzi schemes may find it much harder to pursue banks. Read More ›

Sixth Circuit Voids Reaffirmation Agreement under Kentucky Law

                In Salyersville Nat’l Bank v. Bailey (In re Bailey), 664 F.3d 1026 (6th Cir. 2011), Chapter 7 bankruptcy debtors, prior to filing for bankruptcy, obtained a loan from Salyersville National Bank, pledging their home and 40 acres of land as security.  Several years later, the debtors took out a second loan from the bank, this time pledging their truck as security.  After encountering financial difficulties, the debtors eventually filed for bankruptcy in 2005.  Less than a month later, the debtors and the bank entered into a reaffirmation agreement, which committed the debtors to pay the two debts that would have otherwise been dischargeable in bankruptcy.  In particular, the debtors reaffirmed their secured indebtedness in the two loans, and in return, maintained possession of their home and truck. Read More ›

On Account Claim Deficient Where Account Statements Attached To Plaintiff's Complaint Do Not Reflect Purchases And Payments

            In Equable Ascent Fin., LLC v. Christian, 196 Ohio App.3d 34, 2001-Ohio-3791 the Court of Appeals in the Tenth District, Franklin County, reversed a trial court’s order granting default judgment to plaintiff credit card account holder on the grounds that the on account claim filed against Defendant debtor Sue Ann Christian (“Christian”) failed because the credit card statements attached to the Complaint were insufficiently detailed.  Read More ›

Bankruptcy Court For The Northern District Of Ohio Holds That The Ohio Homestead Exemption Applies Only To Parcel Of Land Upon Which Residence Is Situated

The United States Bankruptcy Court for the Northern District of Ohio recently held that under Ohio law, the homestead exemption set forth in Ohio Rev. Code Ann. § 2329.66 applies to contiguous parcels of land only if those parcels are used for a single purpose as the debtor’s homestead.  In re Whitney, 459 B.R. 72 (Bankr. N.D. Ohio 2011). Read More ›

Bankers "Boot Camp" Successful Again

Since 2005, Frost Brown Todd has hosted a 2-day commercial lending training program for our financial institution clients.  This year, we were honored to have 78 of our clients and friends, from three states, attend over March 12 and 13th.  By all accounts this year’s program was the most beneficial and successful yet, until 2013!  Congratulations to Kim Mauer, all the presenters, and to all the bank officers who profited from attending the training. Read More ›

Electronic Banking Security And Risk Analysis Guidance

Hats off to the Texas Bankers Electronic Crimes Task Force, and its study of current best risk minimization practices to deter financial crimes, particularly account takeover attacks.  The report is recommended reading for CIO’s, security officers and fraud investigators, even if their financial institution resides outside of the Lone Star State. Read More ›

Cognovit Judgments Are Obtained Before The Complaint Is Served On The Defendant

            It may seem obvious to creditors who use cognovit judgments that the Answer and Confession Of Judgment can be filed by the attorney acting pursuant to an appropriate Warrant Of Attorney in a loan document before the clerk of court effectuates service of process on the defendant.  Still, some defendants have tried to get relief from a cognovit judgment by asserting they were entitled to service of process under the rules of civil procedure before the judgment was taken.  Read More ›

Seventh Circuit Upholds Servicer's Assessment Of Late Fees And Negative Credit Reporting

In “an all-too-familiar story of our nation’s current economic predicament,” the United States Court of Appeals for the Seventh Circuit recently addressed a servicer’s application of late fees and negative credit reporting when a borrower entered into a forbearance agreement, but remained delinquent on his loan.  Collins v. America’s Servicing Co., 652 F.3d 711, 712 (7th Cir. 2011).  Read More ›

Do Lenders Have A Right To Credit Bid On Their Collateral?

Last month, the U.S. Supreme Court agreed to hear another bankruptcy case and this one could have a profound effect on a lender’s bidding rights when its collateral is up for sale.  RadLAX Gateway Hotel, LLC v. Amalgamated Bank, No. 11-166, cert. granted Dec. 12, 2011.  In the lower courts, the debtor sought approval of a bankruptcy plan which would have sold the lender’s collateral at auction without allowing the bank to credit bid.  The Seventh Circuit Court of Appeals rejected that approach, saying that secured creditors had a right to acquire the property by bidding with their liens. Read More ›

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Attorney Spotlight

Courtney Rogers Perrin practices in the Nashville office as a member of the Firm’s Electronic Payments and Blockchain practice groups. She assists clients with regulatory compliance, contract negotiations, acquisitions and fund formation relating to credit card processing and fintech enterprises, including smart contracts and virtual currency matters.