A recent decision by the United States Court of Appeals for the Third Circuit suggests steps that lenders who accept the assets of a borrower's wholly-owned subsidiary as collateral should consider taking to reduce the likelihood of litigation in the event the lender must pursue the collateral. In Wachovia Bank National Association v. WL Homes LLC (In re: WL Homes), borrower WL Homes pledged the bank account of JLH, its wholly-owned subsidiary, to Wachovia as collateral on a loan. When WL Homes later filed a bankruptcy petition, Wachovia brought an action in the bankruptcy court for a declaration that its security interest in JLH's bank account was enforceable. The bankruptcy court ruled in Wachovia's favor because it concluded that JLH had consented to WL Homes' pledge of its bank account, and the district court affirmed that part of the bankruptcy court's holding.

Although the result in the WL Homes case is not surprising, the case suggests steps that lenders can take to reduce the potential for litigation when accepting a pledge of non-owned assets from a borrower. This engaging webcast will highlight the use of express consent to dissuade opponents from litigating the enforceability of a lender's security interest, thereby potentially sparing lenders from the expense of litigating the issue of consent.

YOUR SPEAKERS:

Melissa S. Blanton serves as vice chair of the Firm's Corporate and Finance Practice Group and is also a member of the Real Estate Practice Group. Ms. Blanton represents financial institutions in various types of residential, retail, and office development projects, in syndicated secured real estate credit facilities, and in the structuring, drafting, and negotiation of workout and forbearance agreements. She also represents investors and institutional clients in complex real estate sales and acquisitions. In addition, Ms. Blanton has significant experience representing landlords and tenants in commercial leasing transactions.

Stephen J. Shapiro, co-chair of Schnader’s Financial Services Litigation Practice Group, defends industry-leading financial services companies in contract disputes and matters involving allegations of fraudulent conduct and breaches of fiduciary duty. Among his representative cases, Mr. Shapiro obtained a complete defense verdict after an eight day jury trial on behalf of a Fortune 100 bank arising out of allegations that bank personnel made fraudulent statements to a customer of the bank. Mr. Shapiro also defended a lender against an action brought by the bankruptcy trustee of a former bank customer seeking the return of millions in loan repayments. He also represents professional services providers in malpractice actions, and handles trademark/trade name infringement, theft of trade secret and unfair competition claims for a wide variety of clients.


Practice Areas:		Banking & Finance Law, Real Estate Law

Online Media Type:		Audio

Production Date:		11/19/2013 12:00 PM EST

Level:		Intermediate

Category:		Standard

Duration:		1 Hours, 0 Minutes

Online Format:		Live

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Speakers:

•	Stephen J. Shapiro - Partner - Schnader Harrison Segal & Lewis LLP, Philadelphia
•	Melissa S. Blanton - Partner - Schnader Harrison Segal & Lewis LLP, Philadelphia


	This product is designed to provide information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.