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Bryan Cave Files Amicus Brief On Behalf of GBA in Overdraft Case

January 3, 2016

Authors

Bryan Cave

Bryan Cave Files Amicus Brief On Behalf of GBA in Overdraft Case

January 3, 2016

by: Bryan Cave

Byran Cave filed an amicus brief on behalf of the Georgia Bankers Association and the Georgia Chamber of Commerce in the Bickerstaff v. SunTrust Bank litigation currently pending before the Georgia Supreme Court in which a bank customer seeks to certify a class action against SunTrust to challenge the propriety of certain overdraft charges.

The trial court below ruled that while the plaintiff could opt out of an arbitration clause in the deposit agreement with SunTrust to pursue such challenges in his own right, the plaintiff could not do so on behalf of a class. The Georgia Court of Appeals affirmed the trial court ruling that “the deposit agreement contract and its arbitration clause prohibit [plaintiff] from altering others’ contracts where he is neither a party nor in privity with a party.” The plaintiff in the case then petitioned the Georgia Supreme Court to grant certiorari in the case.

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The State of Banking in Atlanta: 2015 vs. 2005

October 8, 2015

Authors

Robert Klingler

The State of Banking in Atlanta: 2015 vs. 2005

October 8, 2015

by: Robert Klingler

Last week we looked at the state of banking in Georgia based on the FDIC’s latest summary of deposits information, and now we turn our focus to Atlanta.  The overall number of banks in the Atlanta Metropolitan Statistical Area (the 9th largest MSA in the country), fell from 138 to 97, a 30% decline.  As in broader Georgia, this number overstates the decline of independent banking organizations, as the number of holding companies operating multiple bank charters in the Atlanta area fell from 4 to 1, with the number of unaffiliated financial institutions falling from 126 to 96 (a 24% decline).

The total amount of deposits assigned to branches in the Atlanta MSA rose from $95 billion to $146 billion, a 54% increase (as compared to a 43% increase for the entire state, and an increase of only 23% in the state but outside the Atlanta MSA).  The

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Fourth Circuit Upholds FDIC’s Ordinary Negligence Claims

October 6, 2015

Authors

Michael Carey

Fourth Circuit Upholds FDIC’s Ordinary Negligence Claims

October 6, 2015

by: Michael Carey

The United States Court of Appeals for the Fourth Circuit, which governs North and South Carolina as well as Virginia, West Virginia and Maryland, has issued an important ruling in FDIC v. Rippy, a lawsuit  brought by the FDIC against former directors and officers of Cooperative Bank in Wilmington, North Carolina.  As it has done in dozens of cases throughout the country, the FDIC alleged that Cooperative’s former directors and officers were negligent, grossly negligent, and breached their fiduciary duties in approving various loans that caused the bank to suffer heavy losses.  The evidence showed the FDIC had consistently given favorable CAMELS ratings to the bank in the years before the loans at issue were made.  The trial court entered summary judgment in favor of all defendants, criticizing the FDIC’s prosecution of the suit as an exercise in hindsight.  The Fourth Circuit, however, vacated the ruling as it applied to

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The State of Banking in Georgia: 2015 vs. 2005

October 2, 2015

Authors

Robert Klingler

The State of Banking in Georgia: 2015 vs. 2005

October 2, 2015

by: Robert Klingler

On September 28, 2015, the FDIC published the 2015 summary of deposits information.  Using this data, we compared the deposit data for Georgia, comparing 2015 to 2005.  Without even looking at the numbers, we knew the period would represent significant change, as the Great Recession had a significant impact on the banking industry, particularly in Georgia.

As a headline number, the total number of banks with branches in Georgia fell from 367 to 248, a decline of over 32%.  However, as with many reports showing the number of bank charters, this number overstates the effect of consolidation as it also reflects internal holding company reorganizations in which multi-bank holding companies have consolidated into one bank charter.  These internal consolidations reduced the number of bank charters in Georgia by 51, as the number of multi-bank holding companies fell from 18 to 6 (one of which combined their subsidiary bank charters

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Oral Arguments on HWA Decision

September 16, 2015

Authors

Bryan Cave

Oral Arguments on HWA Decision

September 16, 2015

by: Bryan Cave

On Monday, September 14, 2015, the Georgia Supreme Court heard oral arguments in the case of PNC Bank, National Assoc. vs. Kenneth D. Smith, et al., Case No. S15Q1445.

As noted in our prior blog post, this case is of great interest to banks operating in Georgia which are involved in real estate lending.  At issue is whether a lender may conduct a non-judicial foreclosure on real estate serving as collateral, and then pursue a guarantor without first pursuing a confirmation of the sale.  In addition, the Court is being asked to consider whether a guarantor may waive such a requirement.  In an earlier case, HWA Properties, Inc. v. Cmty. & S. Bank, 322 Ga. App. 877 (2013), the Court of Appeals held that a confirmation following a foreclosure sale is no longer a prerequisite to suing the guarantor for a deficiency when the guaranty waives such a confirmation. 

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Georgia Garnishment Statute Held Unconstitutional

September 15, 2015

Authors

Bill Custer, Jerry Blanchard and Jennifer Dempsey

Georgia Garnishment Statute Held Unconstitutional

September 15, 2015

by: Bill Custer, Jerry Blanchard and Jennifer Dempsey

The recent opinion of Judge Marvin Shoob in the Strickland v. Alexander case has created a great deal of confusion among banks about their duties in responding to a summons of garnishment in Georgia.  In that opinion, Judge Shoob declared the Georgia garnishment statute to be unconstitutional on multiple grounds. Primary among the  grounds cited by Judge Shoob was the absence of any notice to the debtor of the existence of statutory exemptions which shield certain funds from garnishment or the procedures available to assert those exemptions.  It is unclear whether the decision will be appealed, modified, or cured by subsequent legislation.  Numerous esoteric questions have been raised by the legal community about the validity of the opinion, but those questions are beyond the scope of this post.

Whether Judge Shoob’s opinion is appealed, modified or cured by the Georgia General Assembly, banks currently face significant questions in its wake.  The

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Bryan Cave Files Amicus Brief On Behalf Of Georgia Bankers Association Regarding Recent HWA Decision

September 11, 2015

Authors

Bryan Cave

Bryan Cave Files Amicus Brief On Behalf Of Georgia Bankers Association Regarding Recent HWA Decision

September 11, 2015

by: Bryan Cave

Today, Bryan Cave filed an amicus curiae brief on behalf of the Georgia Bankers Association in a case currently pending before the Georgia Supreme Court styled PNC Bank, National Assoc. vs. Kenneth D. Smith, et al., Case No. S15Q1445.  The case is of great interest to banks operating in Georgia because the Supreme Court will be reviewing the reasoning of the HWA Properties, Inc. v. Cmty. & S. Bank, 322 Ga. App. 877 (2013) decision, in which the Georgia Court of Appeals held that a lender was entitled to pursue a guarantor for any deficiency remaining on a debt after a foreclosure, regardless of whether the lender had confirmed the foreclosure sale, if the guaranty included language waiving all defenses to collection of the debt.  As articulated in the amicus brief filed by Bryan Cave on behalf of the Georgia Bankers Association, a ruling by the Georgia Supreme Court

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Has Your Georgia Non-Compete been Rendered Invalid?

April 3, 2015

Authors

Chris Galanek and Aiten McPherson

Has Your Georgia Non-Compete been Rendered Invalid?

April 3, 2015

by: Chris Galanek and Aiten McPherson

Can Inclusion Of A Boilerplate Duty Of Loyalty Provision Invalidate Your Covenant Not To Compete?

The Early v. MiMedx Decision

On February 10, 2015, the Georgia Court of Appeals held in Early v. MiMedx Grp, Inc., that a provision in a consulting agreement requiring an employee to devote her full working time to the performance of her duties for the employer was not a loyalty clause but, instead, constituted an illegal restraint on trade. In and of itself, the decision in Early is interesting and will undoubtedly affect how employers draft their duty of loyalty provisions. Perhaps a less obvious consequence of this decision, however, is that by reading a loyalty clause as a restrictive covenant, the Court has now placed employers in jeopardy of having their otherwise valid, and properly tailored, restrictive covenants invalidated if they are contained in an agreement signed prior to May

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Georgia Supreme Court Confirms Business Judgment Rule

July 12, 2014

Authors

Michael Carey

Georgia Supreme Court Confirms Business Judgment Rule

July 12, 2014

by: Michael Carey

The Georgia Supreme Court issued its long-awaited decision in FDIC v. Loudermilk  on Friday, addressing whether the FDIC’s ordinary negligence claims against former directors and officers of failed banks are precluded by the business judgment rule.  There is a lot to digest in the Court’s 34-page opinion, but here are our initial thoughts.

The upshot for bank directors and officers in Georgia is that the business judgment rule is very much alive, and applies to banks to the same extent as other corporations.  That itself is big news—the Georgia Supreme Court had never addressed whether the business judgment rule exists in any context, and the FDIC had argued that if the rule existed at all, it did not apply to banks because the Banking Code imposes an ordinary negligence standard of care.  Much of the Court’s opinion is devoted to explaining how the business judgment rule developed as

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Comments on Proposed Rules for Georgia Fairness Hearings

July 7, 2014

Authors

Michael Shumaker and Eliot Robinson

Comments on Proposed Rules for Georgia Fairness Hearings

July 7, 2014

by: Michael Shumaker and Eliot Robinson

On May 9, 2014, the Georgia Securities Division issued a proposed rule to create a formal process for fairness hearings to be conducted by the Georgia Commissioner of Securities.  The proposed rule would establish procedures for administrative hearings to determine the fairness of certain mergers and other business combinations in which securities are issued.  If the Commissioner determines that the terms of the proposed transaction are fair to the shareholders receiving securities, the issuer would be able to claim an exemption from the registration requirements of the federal Securities Act of 1933 for the securities to be issued.  Specifically, Section 3(a)(10) provides an exemption from the registration requirements of the federal Securities Act for securities issued in a transaction determined to be fair pursuant to a fairness hearing by a governmental authority.  The exemption from registration with the SEC is particularly valuable for companies that are not currently subject

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