Practice Areas: Banking Litigation

McGuireWoods’ banking litigation group represents banks, thrifts, broker-dealers, pension funds, leasing companies, commercial and residential mortgage companies and other in the financial services industries. We defend and prosecute claims involving breach of contract, the Uniform Commercial Code, securities, commercial business torts as well as lender liability, foreclosures, receiverships and fiduciary claims.

Our experience includes litigation involving all statutes and regulations governing the bank/customer relationship including Truth In Lending Act, Consumer Leasing Act, Real Estate Settlement Procedures Act, Equal Credit Opportunity Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act, Federal Trade Commission Act, RICO, state interest and usury laws, state consumer protection and unfair trade practices laws, FTC holder rule and FTC regulations, and unauthorized practice of law claims. We also have extensive class action experience relating to bank insurance products.

Additionally, our seasoned trial lawyers are familiar with handling and winning claims against disgruntled borrowers, especially those claims that arise when the economy softens. We also represent lenders in various intercreditor disputes, including issues relating to the perfection and priority of security interests and the interpretation of lien or payment subordination agreements, and in disputes related to major syndications.

Our litigators also work closely with our creditors’ rights lawyers on bankruptcy litigation claims, from preference and fraudulent conveyance claims, and assertions that lenders should have their claims equitably subordinated to automatic stay litigation, including issues of adequate protection and the likelihood of successful reorganization. We also have substantial experience representing lenders in connection with attempts to confirm "cram downs" in Chapter 11 cases.

We also have substantial experience in handling modern lender liability claims, such as aiding and abetting fraudulent transfers, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, deepening insolvency, and alleged violations of the anti-tying provisions of the Bank Holding Company Act.

Whatever the issue, McGuireWoods’ clients rely on us to understand the business realities of any legal undertaking and seek the optimum resolution for their particular needs.

Representative Work

The following matters reflect the group's capabilities across a range of industries and issues:

• Represented a foreign-chartered bank in significant bankruptcy and shareholder litigation relating to the Enron and Adelphia scandals.
• Represented a bank in class actions in Pennsylvania, Arizona, New Jersey and Illinois alleging, among other claims, that the bank lent money to borrowers who could not afford to pay them back, improperly flipped borrowers into refinancings secured by first mortgage loans without any real benefit to the borrower, and fraudulently misrepresented the benefits of and unlawfully induced the purchase of credit life insurance. Insurance claims settled on a class-wide basis and as part of a $200 million plus national settlement contemplated by the company as part of a deal reached with the FTC on a nationwide basis.
• McGuireWoods won Summary Judgment on behalf of a major financial institution on warranty and indemnification issues under the National Automated Clearing House Association ("NACHA") rules and regulations. The case arose from an individual fraudulently using the ACH system via the internet and facsimiles. The individual had been withdrawing $475,000 every Tuesday and Thursday from an account held at the bank. Prior to the opinion being issued, this case received a lot of attention at the NACHA seminar in New Orleans and the Firm has been in contact with the General Counsel of NACHA concerning the national impact of the ruling, which on every issue is in the bank's favor. The opinion confirms that the plaintiff must indemnify our client for all direct and indirect fees and costs incurred relating to the matter. The opinion also confirmed that contributory negligence was not a defense.
• Represented a Fortune 50 financial institution in Qui Tam action alleging False Claims Act regarding violations in connection with the check clearing processes. Successfully enjoined state court proceeding by injunctive action in federal court under the National Bank Act.
• Represented a Fortune 50 financial institution in RICO claims arising out of the failure of real estate development. Three-week jury trial in federal court resulted in a zero verdict for the bank.
• Represented a sub-prime lending subsidiary of national bank in claims that wrap insurer of mortgage syndications was defrauded in connection with various securitizations.
• Representation of Fortune 50 financial institution in series of actions and class actions arising from bank mergers. Successfully defended claims that merger triggered change of control for purposes of payout of various option plans.
• Represented a bank in putative class action filed in U.S. District Court for the Middle District of Florida in Orlando. Plaintiff alleged violation of the Consumer Leasing Act with respect to disclosure of the warranty provision of plaintiff’s automobile lease. After defeating certification, the case was settled with the named plaintiff.
• Represented a bank in class action brought in U.S. District Court for the Middle District of Alabama, Northern Division in Montgomery. Plaintiff alleged fraud and violations of the Truth-in-Lending Act in connection with third-party extended automobile warranty contracts.