More than 400 financial institutions have failed since September 2008, causing hundreds of billions of dollars in losses to the Federal Deposit Insurance Fund. The FDIC has filed a total of 41 professional liability lawsuits against former bank directors and officers of failed institutions. These developments warrant close attention from community bankers, since a majority of the complaints have involved small or medium-size banks, say attorneys with BuckleySandler LLP.
The severe weather events of the last two years have called into question the use of hurricane deductibles in the Northeast states. In both Hurricane Irene and Hurricane Sandy, insurers were unable to apply such deductibles, and the insurance industry should continue to monitor this issue by involving the property and casualty insurance trade organizations and discussing the matter at the National Association of Insurance Commissioners level, say attorneys with Wilson Elser Moscowitz Edelman & Dicker LLP.
Until the California Supreme Court formally narrows the scope of Raymond Edwards II v. Arthur Anderson LLP to make clear that it applies only to noncompete clauses contained in employment agreements, one should generally consider noncompete clauses — in merger and acquisition agreements, commercial real property lease agreements and license agreements, for example — to be unenforceable in California, says Adam Bloom of Milbank Tweed Hadley & McCloy LLP.
In recent years, there has been a steady evolution of real estate investment trusts and an increase in entities that have announced their intent to convert to REIT status, as well as an expansion of asset categories that they hold and the corresponding income sources. This progression likely will continue in the future, and new areas to watch include renewable energy assets — such as wind and solar projects — and, in the mortgage REIT sector, excess mortgage servicing rights, say David Levy and Carl Riley of Skadden Arps Slate Meagher & Flom LLP.
Although indemnity for negligence arising out of construction claims in California is a thing of the past, enforcing contracts with strong indemnity agreements is very much a thing of the present. The first step in that process is obtaining a declaration that a duty to defend exists. However, to get there, the developer and contractor must be meticulous from the beginning, says Steven Cvitanovic of Haight Brown & Bonesteel LLP.
As Europe’s commercial real estate debt market enters its sixth year of “credit crunch” disruption, it is increasingly clear that traditional bank lending will not be able to meet the demand for new finance. Meanwhile, the market for high-yield debt has seen considerable growth, making high-yield bond issues an increasingly attractive source of funding to the debt-starved European real estate industry, say attorneys with Paul Hastings LLP.
As a result of significant changes to the regulatory regime for commodity pool operators and commodity trading advisers in 2012, various types of collective investment vehicles that previously were not regulated by the U.S. Commodity Futures Trading Commission, and their operators and advisers, became subject to CFTC oversight as of Jan. 1, 2013. We anticipate additional significant developments for the CPO and CTA regulatory regimes with respect to seven areas in particular, say attorneys with Sutherland Asbill & Brennan LLP.
The U.S. Environmental Protection Agency has announced that it generally will not seek cleanup costs from tenants who lease contaminated properties. Better able to protect themselves against liability under Comprehensive Environmental Response, Compensation and Liability Act, tenants must now carefully consider what level of due diligence to conduct, say attorneys with Mintz Levin Cohn Ferris Glovsky and Popeo PC.
In a decision that will dramatically impact contract and lender liability litigation, the California Supreme Court decided in Riverisland Cold Storage Inc. v. Fresno-Madera Production Credit Association that the parol evidence rule does not bar the introduction of evidence of fraud, even if the misrepresentations directly contradict the terms of a written contract. In so ruling, the court directly overturned its decision in Bank of America v. Pendergrass, which has been the law in California, albeit reluctantly, for over 75 years, say attorneys with Robins Kaplan Miller & Ciresi LLP.
Businesses that suffered losses due to mandatory evacuation orders during Hurricane Sandy may seek coverage under civil authority provisions. But would such provisions be triggered when an evacuation was ordered before the evacuation area sustained any damage? Reviewing how courts considered civil authority coverage in cases from past storms can answer this question, says Thomas Caswell of Zelle Hofmann Voelbel & Mason LLP.