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Georgia Supreme Court Weighs in on Director Liability

The Supreme Court of Georgia issued its latest opinion on March 13, 2019 in the continuing litigation over whether former directors and officers of the now defunct Buckhead Community Bank can be held liable for financial losses from commercial real estate loans.

The Georgia Supreme Court had previously advised a Georgia federal court, where the case was filed by the FDIC, that the directors and officers of the bank could be held liable if they were negligent in the process by which they carried out their duties. Following that opinion, rendered in 2014, the case returned to federal court, and a trial was ultimately held in 2016. In that trial, the jury concluded that some of the directors and officers were negligent in approving some loans and awarded the FDIC $4,986,993 in damages.

The trial judge in the case found that the defendants were “jointly and severally liable” for the award, meaning that the entire verdict could be collected from any one of the defendants. The defendants appealed contending that joint and several liability had been abolished by the General Assembly in 2005. The defendants also argued that the trial court should have given the jury the opportunity to apportion the damages among each of the defendants according to their respective degrees of fault. In considering the appeal, the United States Court of Appeals for the Eleventh Circuit again sought direction from the Supreme Court of Georgia on this new issue of law.

On Wednesday, in a 39-page opinion, the Georgia Supreme Court responded, providing answers to some, but not all, of the questions raised by the Eleventh Circuit. The Georgia Supreme Court held that joint and several liability can still be imposed in Georgia on defendants “who act in concert insofar as a claim of concerted action involves the narrow and traditional common-law doctrine of concerted action based on a legal theory of mutual agency and thus imputed fault.” The Supreme Court indicated that this was a very narrow exception to the usual rule that damages must apportioned among defendants.

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Media Mentions – March 29, 2013

With attorneys and staff worldwide, Bryan Cave attorneys are often quoted in the news.  Recent Media Mentions of Financial Institutions Group attorneys include:

BankBryanCave in GBA e-Bulletin

BankBryanCave post concerning a potential new wave of ATM class actions in Georgia was featured in the March 8 edition of the GBA e-Bulletin, from the Georgia Bankers Association. The suit against Branch Banking and Trust Company in federal court in Atlanta alleges that two of the bank’s ATMs did not meet the accessibility features mandated by the Americans with Disabilities Act.  Click here to read the GBA summary of the topic, which links to our original March 6 post written by Atlanta Partners Jennifer Dempsey and Bill Custer.

Linda Odom and Courtney Stolz in Bank Director

DC attorneys Linda Odom and  Courtney Stolz authored an article March 29 in Bank Director regarding steps the Federal Trade Commission has taken to push for more unified mobile payments regulation. “For banks interested in mobile banking, its actions and publications are very instructive,” they wrote. “Over the last two years, the FTC’s actions include: bringing law enforcement actions, obtaining high-profile settlements with Google and Facebook and issuing policy reports for mobile businesses and policymakers. Although financial institutions are not directly regulated by the FTC in this area, the FTC does regulate all other mobile providers including merchants, payment card networks and payment processors.”  Click here to read the full article. The two also authored an article for Bank Director on proposed guidance from the Federal Financial Institutions Examination Council to help banks manage their social media risks. “Social media has become ubiquitous and many banks are wondering if they can survive without a trendy presence on Facebook, LinkedIn, Twitter, YouTube, and in the ‘blogosphere,’ ” they wrote. “It is a bit of the Wild West out there though, with few rules in place to protect your message.” Click here to read the full article.

Judith Rinearson on Reg Watch

New York Partner Judith Rinearson was quoted March 28 on The Hill’s regulation blog, Reg Watch, regarding new regulations aimed at stopping the use of prepaid credit cards to launder money across the border. The Financial Crimes Enforcement Network within the Treasury Department has been working on rules since 2011 that would require travelers to tell customs officials if they are carrying more than $10,000 on the cards. (Travelers currently must declare only cash and travelers checks above that amount.) “Nobody takes your ATM card to find out what’s in your bank account when you go through customs,” Rinearson said. “If you’ve got a huge line of credit on your credit card – no one asks to see it. Why should prepaid cards be any different?”  Click here to read the full article.

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Media Mentions

Media Mentions

March 18, 2011

Authored by: Jeannie Osborne

With attorneys and staff worldwide, Bryan Cave often makes the news.  Recent media mentions of attorneys in the Financial Institutions group include:

Moeling in The Atlanta Journal-Constitution

Atlanta Partner Walt Moeling was quoted March 5 in The Atlanta Journal-Constitution concerning the high number of failed banks in Georgia, many of them concentrated within 70 miles of Atlanta. For the most part, the failed banks were heavily tied to the state’s once-booming housing market. “The banks that failed are a direct reflection of the economy that supported them,” Moeling said.  Click here to read the full article.

Custer and Dempsey in The Atlanta Journal-Constitution

Atlanta Partner Bill Custer was quoted March 10 in The Atlanta Journal-Constitution for his representation of a syndicate of banks that held an $89.3 million loan on a large Arizona development that failed. Following a one-week arbitration last December in which Custer and Atlanta Partner Jennifer Dempsey represented the banks, a panel of arbitrators entered an award on Valentine’s Day against longtime Atlanta developer W. Harrison Merrill in the amount of $43.6 million. Unfortunately, the decision does not clear the way for banks, located primarily in the Southeast, to collect the money any time soon. A trial in the Superior Court of Pinal County, Ariz., later this year ultimately will be required to resolve the matter.  Click here to read the full article.

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Bryan Cave Attorneys to Give GBA Telephone Briefing on new Garnishment Rule on March 28

A new rule affecting the garnishment of accounts that contain federal benefit payments will go into effect May 1. Currently, banks are faced with difficult decisions when dealing with the garnishment of these accounts, which have occasionally led to liability for banks and potential hardships for depositors. By changing the procedures that banks must follow when they receive a garnishment, the new rule aims to remedy these problems and create workable solutions.

To help you sort out this new rule, the Georgia Bankers Association will host a telephone briefing, Interim Rule on Garnishments, on Thursday, March 28, at 2 p.m.  Join Bill Custer and Julia Fenwick with Bryan Cave LLP, Atlanta, as they discuss how the new rule affects your organization and what your bank needs to be doing now to bring itself into compliance.

The presentation will include a brief discussion of the current state of garnishment law, a detailed look at the provisions of the new rule, and step-by-step instructions for banks to follow when implementing these new procedures. The registration fee is $49 for GBA members (and very reasonable for non-GBA members).  Registration and more information is available online. If you have questions about the briefing, contact the GBA’s Courtenay Pope at 404.420.2015 or Susie McGehee at 404.420.2010.

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