Justia Banking Opinion SummariesArticles Posted in U.S. 2nd Circuit Court of Appeals
Carpenters Pension Trust v. Barclays PLC, et al.
Plaintiffs filed suit against defendants, alleging, inter alia, that Barclays knowingly misrepresented its cost of borrowing funds by submitting false information for the purpose of calculating the London Interbank Offered Rate (LIBOR), in violation of section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5. The court held that the district court erred in concluding, prior to any discovery, that plaintiffs failed to plead loss causation where plaintiffs' allegations that the June 28, 2012 decline in Barclay's stock price resulted from the revelation of Barclay's misrepresentations of its 2007-2008 LIBOR rates and defendant Diamond's conference call misrepresentation of Barclays's borrowing costs presented a plausible claim. The court also held that the district court correctly concluded that Barclays's statements in its SEC filings relating to the company's internal control requirements were not materially false. Accordingly, the court vacated in part, affirmed in part, and remanded. View "Carpenters Pension Trust v. Barclays PLC, et al." on Justia Law
Wilson v. Dantas
Plaintiff filed suit alleging that the Citibank defendants engaged in tortious conduct and breached contractual obligations owed to him in connection with private equity investments in Brazil. On appeal, plaintiff challenged the district court's dismissal of the complaint. The court held that the district court had jurisdiction to hear the case under the Edge Act, 12 U.S.C. 632, because plaintiff's claims arose out of a foreign financial operation. The court also concluded that the district court properly dismissed plaintiff's tort and contract claims against the Citibank defendants under Rule 12(b)(6). Accordingly, the court affirmed the judgment of the district court. View "Wilson v. Dantas" on Justia Law
Yugoimport v. Republic of Croatia, Republic of Slovenia
The Bank filed this interpleader action to determine ownership of funds held on deposit in an account in the name of the Federal Directorate of Supply and Procurement (FDSP), an entity organized under the former Socialist Federal Republic of Yugoslavia (SFRY). The account was frozen pursuant to an executive order during the Bosnian War. Yugoimport, a Serbian entity, claimed full ownership of the funds as successor-in-interest to the FDSP. The Republics of Croatia and Slovenia contend that the funds should be divided among the states succeeding the SFRY under a multilateral treaty, the Succession Agreement. The court held that interpretation of the Succession Agreement was governed by the Vienna Convention and that the FSPA was an agency of the SFRY. Therefore, the court affirmed the district court's grant of summary judgment to the Republics. View "Yugoimport v. Republic of Croatia, Republic of Slovenia" on Justia Law
Hillside Metro Associates, LLC v. JPMorgan Chase Bank, N.A.
This litigation arose out of the failure of WaMu and the assumption of WaMu's assets and liabilities by Chase from the FDIC, acting in its capacity as WaMu's receiver. On appeal, the FDIC and Chase challenged the district court's grant of summary judgment in favor of Hillside. The district court concluded that Hillside, which owned premises leased by WaMu before the financial crisis, had third-party standing to enforce the alleged assignment of WaMu's real estate lease to Chase under a purchase agreement between the FDIC and Chase, even though the FDIC validly repudiated the lease under section 212(e) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, 12 U.S.C. 1821(e), and the parties to the purchase agreement asserted that it did not in fact assign the lease. The court held that Hillside lacked prudential standing to litigate whether WaMu's liabilities were assigned to Chase under the agreement because it was neither a contracting party nor a third-party beneficiary under the agreement. Accordingly, the court vacated and remanded with instructions to dismiss the complaint. View "Hillside Metro Associates, LLC v. JPMorgan Chase Bank, N.A." on Justia Law
Tire Eng’g and Distrib., L.L.C., et al. v. Bank of China Ltd.
These appeals challenged two orders entered in the district court holding that the separate entity rule precludes a court from ordering a garnishee bank with branches in New York to turn over or restrain assets of judgment debtors held in foreign branches of the bank. Because these appeals presented unresolved questions that implicate significant New York state interests and were determinative of these appeals, the court reserved decision and certified two questions to the New York Court of Appeals: (1) whether the separate entity rule precluded a judgment creditor from ordering a garnishee bank operating branches in New York to turn over a debtor's assets held in foreign branches of the bank; and (2) whether the separate entity rule precludes a judgment creditor from ordering a garnishee bank operating branches in New York to restrain a debtor's assets held in foreign branches of the bank. View "Tire Eng'g and Distrib., L.L.C., et al. v. Bank of China Ltd." on Justia Law
Bloom v. Federal Deposit Ins. Corp.
Appellant appealed from the district court's order decertifying a class of plaintiffs who asserted claims against the FDIC and denying plaintiffs' motion to permit appellant, who was not a named party to the action before the district court, to intervene. The court dismissed the appeal because appellant failed to notice an appeal of the denial of the motion to allow him to intervene. As a nonparty, he could not otherwise challenge the decertification order on appeal. View "Bloom v. Federal Deposit Ins. Corp." on Justia Law
Vincent v. The Money Store
Plaintiffs appealed from the district court's grant of defendants' motion for summary judgment on plaintiffs' Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., claims and denial of plaintiffs' motion for reconsideration of an earlier dismissal of their Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq., claims against The Money Store. The court held that the district court erred in concluding that The Money Store was not a "debt collector" under the false name exception to FDCPA liability. Where a creditor, in the process of collecting its own debts, hires a third party for the express purpose of representing to its debtors that the third party is collecting the creditor's debts, and the third party engages in no bona fide efforts to collect those debts, the false name exception exposes the creditor to FDCPA liability. In regards to the TILA claims, the court concluded that the district court correctly determined that, because plaintiffs' mortgage documents did not name The Money Store as the person to whom the debt was initially payable, The Money Store was not a "creditor" under TILA and was therefore not subject to liability. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Vincent v. The Money Store" on Justia Law
Trezziova v. Kohn
Plaintiffs alleged that various foreign investment vehicles secretly funneled investors' assets to Madoff Securities. The district court granted defendants' motion to dismiss plaintiffs' claims against JPMorgan and BNY on the ground that the claims were precluded by the Securities Litigation Uniform Standards Act of 1998 (SLUSA), 15 U.S.C. 78bb(f), and, alternatively, by New York's Martin Act, N.Y. Gen. Bus. Law 352 et seq. In this instance, the allegations were more than sufficient to satisfy SLUSA's requirement that the complaint alleged a "misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security." Accordingly, the court affirmed the judgment, concluding that plaintiffs' claims against JPMorgan and BNY were properly dismissed as precluded by SLUSA. View "Trezziova v. Kohn" on Justia Law
In re: AMR Corp.
U.S. Bank appealed the bankruptcy court's order authorizing AMR and American (collectively, "Debtors") to obtain postpetition financing; authorizing Debtors to repay certain prepetition notes held by U.S. Bank and secured by aircraft; and denying U.S. Bank's request to lift an automatic stay. The court concluded that: (1) under the language of the Indentures, American's voluntary petition for bankruptcy triggered a default and automatically accelerated the debt, the satisfaction of which required no make-whole payment; (2) ipso facto clauses in a nonexecutory contract were not unenforceable under 11 U.S.C. 365(e) or any other Bankruptcy Court provision identified by U.S. Bank; Debtors complied with its 11 U.S.C. 1110(a) elections to perform its obligations under the Indentures and cure any nonexempt defaults by making regularly schedule principal and interest payments; it was not required to cure its Section 4.01(g) default; and (4) the bankruptcy court did not abuse its discretion in denying U.S. Bank's motion to lift the automatic stay. Accordingly, the court affirmed the judgment of the district court. View "In re: AMR Corp." on Justia Law
Franklin Advisers, Inc. v. CDO Plus Master Fund, Ltd.
BNY, as Trustee of an investment portfolio of collateralized loan obligations, initiated an interpleader action to resolve a contract dispute between certain shareholders and the manager of that portfolio, Franklin. At issue were the terms of the indenture and, specifically, terms governing distribution of a Contingent Collateral Management Fee, which was payable to Franklin only if distributions reached a twelve percent internal rate of return (IRR). The court granted the partial summary judgment to Franklin and the denial of summary judgment to the Shareholders, as well as the award of attorneys fees and costs. The court vacated, however, the award of statutory prejudgment interest with instruction to award prejudgment interest actually accrued on the fee owed to Franklin, to be paid from the court's account. View "Franklin Advisers, Inc. v. CDO Plus Master Fund, Ltd." on Justia Law