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The Perishable Agricultural Commodities Act: Whose Money Is This Anyway?

The Perishable Agricultural Commodities Act (“PACA”) has often produced unwelcome and unexpected results for parties unfamiliar with PACA.    Most often, the surprised parties are lenders who make what they think are secured loans to borrowers in the chain of distribution of produce who learn, when the borrowers experience financial problems, that their collateral is illusory. …

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Fourth Circuit Holds That Deposits to Ordinary Bank Account Are Not Transfers That Can Be Avoided By Bankruptcy Trustees

Section 548 of the United States Bankruptcy Code provides that a trustee can recover transfers made by debtors with actual intent to hinder, delay, or defraud creditors during the two years period prior to the filing of the bankruptcy case from the recipients of the transfers.  The Code defines “transfer” broadly to include any “mode,…

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Third Circuit Upholds Lender’s Right to Early Redemption Premium In Bankruptcy

On November 17, 2016, the United States Court of Appeals for the Third Circuit issued its opinion in In re: Energy Future Holdings Corp.  The Third Circuit reversed a ruling by the United States Bankruptcy Court for the District of Delaware that had been affirmed on appeal by the District Court that lenders were not…

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Federal Appeals Court Declares the Structure of the Consumer Financial Protection Bureau Unconstitutional

The United States Court of Appeals for the District of Columbia overturned an administrative order requiring a mortgage company (PHH) to pay $109 million, and in the process declared that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional. [1] The administrative action against mortgage lender PHH arose out of an arrangement known…

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Supreme Court Declines to Provide Clear Direction to Debt Buyers

On June 27, 2016, the United States Supreme Court denied a petition asking it to consider an appeal of the decision of the United States Court of Appeals for the Second Circuit in Madden v. Midland Funding, LLC. In Madden, the Second Circuit held that a consumer borrower might have a valid claim against a debt…

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The Fourth Circuit Interprets Late Fee Provisions in Maryland’s CLEC Statute

Maryland’s Credit Grantor Closed End Credit Provisions (known as CLEC)[1] continue to confound the courts and credit providers and be the statute of choice for individual and class action plaintiffs’ lawyers. This opt-in statute for closed-end credit grantors was considered to be favorable to lenders when it was passed in the 1980’s. However, its popularity…

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What's the deal with due diligence reviews?

RMG attorneys offer due diligence review services for bulk loan purchase transactions and provides an unsurpassed combination of experience and flexibility. Our due diligence reviews are done by seasoned commercial attorneys who will provide the full scope of loan file review, or a more limited review dictated by the client and circumstances. Here are some…

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Don’t Overreach If You Want Your Arbitration Clause To Be Enforceable

As the cost of resolving disputes in court has escalated, businesses have increasingly included clauses in their contracts requiring that any disputes be resolved by binding arbitration instead. Congress has enacted the Federal Arbitration Act (“FAA”) to foster and bring order to this practice and courts have consistently recognized that the FAA evidences a strong…

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Release Me! Trial Court Upholds Validity of Bargained-for Release

In a recent case brought against a Maryland Bank, RMG argued, and the Circuit Court of Baltimore County held, that a voluntary waiver in a standard loan modification agreement was enforceable, and cut off lender liability claims alleged by the borrower (including fraud). In its decision, the Court explicitly distinguished between the waiver at issue…

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