On March 4, 2016, Boodell & Domanskis, LLC prevailed for its financial institution client with the Seventh Circuit Court of Appeals affirming the trial court’s dismissal, with prejudice, of borrower’s counterclaims against the bank on over $15 million in loans whose assets were acquired out of FDIC receivership. The firm successfully argued in the District Court that the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and the Illinois Credit Agreements Act barred this claim because the purported escrow agreement was never put in writing. The bank, having acquired the underlying loans from the FDIC as receiver, had the right to assert this special defense under FIRREA.
In addition to the firm’s victory on this appeal, the firm prevailed in the District Court foreclosing on a commercial property owned by borrowers as well as, with the assistance of local counsel, foreclosing on the borrowers’ hotel properties in two states outside Illinois. The firm also obtained a favorable decision in the District Court earlier in the litigation holding that, under FIRREA, the borrowers could not hold the bank liable for another bank’s actions having not first brought those claims as part of the FDIC administrative claim process.
Firm member Andrew J. Abrams argued the case before the Seventh Circuit. Firm member Max A. Stein also represented the bank in the litigation.
To read the opinion authored by Judge Flaum, please click here.
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