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Services Available
Regulatory
Jackson Walker represents banks, thrifts, directors, holding companies, and institution-affiliated parties in connection with a variety of banking regulatory matters. This representation includes advice concerning compliance with regulatory operating requirements, responses to regulatory examinations and criticisms, and representation in connection with enforcement actions. The parties that Jackson Walker has represented include:
- Institutions
Representation of banks, thrifts and other depository institutions in connection with examinations by primary regulators and the FDIC, including advice and representation in connection with examinations and responses to enforcement actions, including loss of insurance of accounts.
- Directors
Advice and counsel to directors and special committees of directors in connection with regulatory compliance issues, and potential individual liability and enforcement actions, including cease and desist orders and civil money penalties.
- Shareholders and Others
Representation of holding companies, shareholders and institution-affiliated parties in connection with compliance with banking laws, and potential third-party liability and enforcement actions, including potential liability to primary regulators or the FDIC.
- Special Projects
Special investigations and reviews of institutions and their policies and procedures with advice and counsel on regulatory compliance and evaluation of potential liability for institution directors and affiliated parties.
Lending Transactions
The Financial Institution Section handles all types of lending and other finance transactions and is comprised of attorneys located throughout the firm's six offices. On an ongoing basis, the attorneys routinely document, negotiate, and close unsecured and secured working capital and term facilities, interim and permanent construction financing and energy financing of all types. These financings involve either a single lender or a syndicated lending group. The firm's corporate or commercial lending practice includes transactions involving asset based financing, interest-rate swaps and other derivatives, multi-currency facilities, credit enhancement vehicles, acquisition of asset pools, aircraft financing, synthetic and other leveraged leasing, mezzanine and subordinated financing, letters of credit and asset securitization. The firm's real estate lending transactions have included multi-state financings and have involved such asset types as apartments, office buildings, industrial warehouses, residential development, regional and strip shopping centers, golf course and resort development and condominium projects. The energy lending practice includes natural resource-backed lending as well as related project financing, such as concession and support for implementation agreements; engineering and construction agreements; fuel supply, transportation and pipeline financing; and service and operating agreements.
In addition to serving banks, insurance companies, credit unions, and other lending and deposit institutions, Jackson Walker's financial transactions attorneys represent public and privately-owned companies, real estate developers, REITs, pension funds and other entities in their lending transactions.
The firm approaches all of this work in a manner intended to provide the highest quality legal representation without "over-lawyering" the transaction.
Financial Institution Litigation
Jackson Walker recognizes there is no substitute for experience and training in specialized fields of litigation. The Financial Institution Litigation group includes partners and associates in Dallas, Houston, Austin, Fort Worth, San Antonio, and San Angelo, and has represented a large number of financial institutions, including national banks, super regional banks, savings and loan associations, money center banks and state banks. We have represented financial institutions directly, as agents for participated credits, and as participants.
Jackson Walker has represented financial institutions in hundreds of actions brought on behalf of the financial institution for collection of debts, and brought against the financial institution under countless lender liability and other theories. Jackson Walker was the outside law firm used most frequently by the purchasers of the failed First Republic Banks and MBanks. As a result, we handled hundreds of special asset and lender liability cases and work-outs. In fact, we were advised that Jackson Walker handled more collection and lender liability defense matters than any other single law firm arising out of the failure of the First Republic Bank system (over two thousand matters). Out of the numerous litigated matters from the First Republic Bank portfolio handled to conclusion, only one litigated matter resulted in an adverse judgment. The Fifth Circuit Court of Appeals later reversed in part and remanded the balance of the case to the trial court. In doing so, our litigators developed wide ranging experience in usury claims, the National Bank Act, foreclosure issues, injunction actions involving real estate and other bank collateral, duty of good faith claims, offset issues, assignments of rents, limited guaranties, RICO claims, receiverships used to chill foreclosures, and other cutting-edge financial institution issues.
After the bank failure avalanche passed, in addition to litigation involving bank operations and more typical financial institution disputes including trust and fiduciary litigation, we handled a large volume of cases involving alleged forgeries, fictitious payees, wrongful repossession, deceptive trade practices, conversion, fraud, breach of fiduciary duties, and other theories. One of our clients challenged us to consider handling cases involving claims under $250,000 on a general fixed fee plus expenses basis. To date, we have handled well over one hundred cases on a fixed fee arrangement and have handled other, more involved matters on other alternative fee arrangements, including capped fees.
We realize that bankers have budgets and that litigation sometimes operates to disrupt financial cost centers and group budgets. We strive to work with our financial institution clients to accurately forecast fees and, in appropriate circumstances, set fees in a manner that allows for accurate litigation budget planning. We know that sophisticated institutions sometimes require reporting and sensitivity to lines of authority. We regularly create and manage responses to reporting requirements. We communicate with our financial institution clients as the client's needs are determined. We also use electronic billing and task code billing for financial institutions that require it.
As some examples of our recent representations of financial institutions, we represented a national bank against a borrower on a significant loan where the borrower had converted collateral worth over $3 million. The borrower alleged that he was justified in his actions because the bank had breached the loan agreement and committed numerous other wrongful acts due to the bankÍs actions in allowing another borrower to assume the loan over the original borrower's objection. The borrower brought a counterclaim against the bank for $6 million in damages. We tried the case before three arbitrators and prevailed on all claims and theories. An award was entered in favor of the bank for over $3 million in damages, all attorneys' fees, pre- and post-judgment interest, and arbitration costs. The borrower's $6 million counterclaim against the bank was dismissed with prejudice. Since the Judgment was entered, we have received additional attorneys' fees from the borrower over and above the amount awarded.
In another case, lawyers from the firm's Dallas and San Angelo offices represented the nation's largest savings and loan association in a lawsuit in West Texas arising out of a fraudulent factoring scheme. The entity that issued the fraudulent invoices had been a bank customer. Plaintiffs began factoring invoices as a result of a communication from a bank officer. The plaintiffs alleged claims for fraud, negligent misrepresentation, negligence, and breach of a duty of good faith and fair dealing. The plaintiffs sought actual damages in excess of $3 million and punitive damages. After a 23 day trial, the trial judge exonerated the bank, finding that the plaintiffs' losses were caused by the actions of other parties and that the plaintiffs could not have reasonably relied on the bank officer's statements.
In yet another case, we were hired as local counsel in Austin in a case brought by six national banks against the Texas Banking Commissioner, challenging the constitutionality of an amendment to the Texas Business & Commerce Code during a recent legislative session. That amendment at Tex. Bus. & Com. Code § 4.112 prohibited banks from charging non-customers a check cashing fee. We were able to secure a temporary injunction in favor of the Banks prohibiting enforcement of § 4.112, and subsequently obtained an order from the federal court granting summary judgment in favor of the Banks, thereby invalidating the Texas statute. The Fifth Circuit Court of Appeals affirmed that finding in favor of our bank clients.
We have been very successful in having matters against our bank clients referred to binding arbitration based on arbitration provisions contained in loan agreements and deposit agreements. In one recent case, a United States District Court issued a lengthy memorandum opinion in which the Court enforced an arbitration provision against bank customers based on a deposit agreement that the customers swore they never received. The Court also ruled that certain non-signatories to the account were subject to the binding arbitration clause. In another case, we obtained an order of referral to arbitration in probate court against the administrator of the estate, even where some of the deposit agreements at issue did not contain arbitration provisions.
We have also been instrumental in developing the law in this circuit with respect to the jurisdiction of national banks. Courts around the nation have been divided as to where a national bank is "located" for jurisdictional purposes. We have obtained two federal court opinions in this circuit that national banks are "located" in the state of their principal place of business, pursuant to 28 U.S.C. § 1348, and have successfully removed cases from state court to federal court on this basis.
We have also handled special projects for our bank clients, such as a detailed analysis of Texas foreclosure issues. This project was undertaken to avoid potential borrower or class litigation brought to overturn hundreds of foreclosures. We understand that the potential litigation was avoided entirely. Jackson Walker handled strategic litigation brought in connection with the restructuring of some of the bankÍs largest borrowers. In one matter, we negotiated a twenty two million dollar cash payment to resolve litigation involving an obligation of a party that was at the time in a Chapter 11 proceeding in New York. We were also retained to handle the so-called "MSlim" litigation against three former MBank affiliates. The MSlim litigation involved the prefailure transfer of about $442 million of loan participations. The transferee institutions filed multiple lawsuits against a national bank. Ultimately, Jackson Walker obtained a summary judgment favorable to the bank under a centuries old provision of the National Bank Act rarely utilized since the Great Depression. This ruling enabled our client to resolve favorably the remaining related actions.
We also recognize that negotiation and settlement of claims is often in our clients' interest, and we have been very successful in settling claims brought against our financial institution clients. For example, in one case we represented a national bank in a matter brought one of its customers relating to embezzlements totaling around $3 million. The customer sued the bank for fraud, conversion, and breach of contract relating to this embezzlement, which the customer alleged was allowed by the bank's negligent opening of an account for the embezzler without proper corporate documents. We negotiated a settlement on behalf of our client for $162,000.00, and obtained an indemnification from the customer to indemnify and defend the bank in certain related litigation that was ongoing. We also represented a national bank in another embezzlement case involving embezzlements of approximately $4 million. Again, the plaintiffs alleged that the bank converted the checks by not verifying the signatures on the checks in question. We negotiated a settlement on behalf of the bank with the customers for $275,000.00, and one of the customers agreed to pay the bank 100% of its loan, with interest, on which we had filed a counterclaim.
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