October 18, 2016
Authored by: Daniel Wheeler and Joseph Poppen
Editor’s Note: Bank Bryan Cave is going into its ninth year as one of the nation’s leading blogs on financial institution regulatory, M&A, securities, and litigation issues. Here’s a recent post on Bryan Cave’s successful work for the California Bankers Association (“CBA”), headed up by Joseph Poppen of BC’s San Francisco office.
Bryan Cave LLP recently served as counsel for amicus curiae California Bankers Association (“CBA”) and helped score a victory in an important California appellate case of great interest to the banking industry, LSREF2 Clover Property 4 LLC v. Festival Retail Fund 1 357 N. Beverly Drive LP (Second District, California Court of Appeal case number B259937) (Link to the opinion is here).
The trial court had ruled that the guarantor of a commercial loan was excused from performance on the grounds that the guaranty was a “sham,” structured by the lender to circumvent California’s anti-deficiency laws. The guarantor essentially argued that there was no legal separation between it and the borrower because it was the borrower’s “alter ego,” and as support they identified evidence that the two entities failed to observe basic corporate formalities. According to the guarantor, it should be