Showing 6 posts in Commercial Lending & Disputes.
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.  Bank1 and Spouse executed multiple extensions of both the $135,000 commercial revolving loan. Read More ›
On March 4, 2014, the Ohio Supreme Court issued its decision in First Merit Bank v. Inks, 138 Ohio St.3d 384. In this case, the court held that the statute of frauds prohibited both a claim and the assertion of a defense by guarantors who alleged an oral amendment of a written forbearance agreement. That forbearance agreement came within the statute of frauds because in addition to settling the liability of the borrower and guarantors, it would have impacted the mortgage securing the debt – specifically by releasing that mortgage. Read More ›
John Williamson, a local bank vice president, meets with Ronnie Roma and Harry Levine about a $25,000 equipment loan for their closely-held business, Highland Farms, LLC. After the initial conversation, Roma takes the lead on negotiating the loan. Levine is unaware of the progress of things until Roma emails Levine a blank “Personal Guaranty” to sign so they can “do that loan we discussed with the bank.” Because the loan is supposed to close the following day, Levine signs the guaranty that includes an obligation to guaranty all the debts of the “Debtor” to the bank, but the name of the “Debtor” is blank when he signs it and the document contains no reference to the specific transaction. Levine emails a signed copy of the guaranty to Roma. Read More ›
Since 2005, we have offered a 2-day commercial lending training class to our lender clients as well as our newer associates. This year, we were delighted to have 76 of our clients and friends attend this training on Monday, March 4 and Tuesday, March 5. Read More ›
A hypothetical bank receives a complaint from a customer about a car loan. According to the bank’s records, the complaining customer is a co-obligor on a car loan payable to the bank, along with his wife. According to the customer, he is not a co-obligor, because he and his wife were separated when she bought the car, she forged his signature on the note, and she agreed to assume responsibility for the payments under their separation agreement. When her failure to make the loan payments begins harming his credit, the customer disputes his status as a co-obligor, and the bank receives requests from several credit reporting agencies asking the bank to verify the loan. The bank reports back that the customer is indeed a co-obligor and notifies the customer that, in order for the bank to investigate further, the customer must provide either a police report or fraud affidavit. When the customer fails to do so, the bank declares the dispute a civil matter and ends its investigation. Read More ›
Commercial real estate foreclosures present a number of significant challenges to lenders, special servicers and their counsel that residential foreclosures do not. But residential foreclosures make up the vast majority of state courts’ foreclosure dockets, so the court system – including Judges and Master Commissioners – is often unfamiliar of the challenges associated with commercial foreclosures. This can result in delays, unnecessary expense and the associated frustration that invariably follows when a commercial real estate asset is tied up in Court. Read More ›
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William T. Repasky practices with the Litigation Department at Frost Brown Todd. He focuses on lending and commercial services; banking litigation and financial institutions.