June 11, 2015Newsletter

June 2015 Banking and Financial Services Newsletter

U.S. Supreme Court Takes on Bankruptcy Lien-Stripping
Ann Ustad Smith


On June 1, 2015, the U.S. Supreme Court held that a Chapter 7 debtor may not void a junior mortgage lien on a home worth less than the amount due on the first mortgage. Bank of America v. Caulkett, Case No. 13-1421 (consolidated with Bank of America v. Edelmiro Toledo-Cardona, Case No. 14-162).
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Did You Just Receive a Qualified Written Request? 
Joseph D. Brydges


Our firm represents lenders and mortgage servicers large and small with regard to foreclosure actions, and we have recently seen a proliferation of these so-called “Qualified Written Requests” (QWR) under section 2605 of the Real Estate Settlement and Procedures Act (RESPA). In a nutshell, a QWR is a request for information from a borrower to her mortgage servicer. Sounds simple enough, right? But with QWRs, the devil is most certainly in the details. Indeed, receipt of a properly prepared QWR triggers a number of obligations on the part of the mortgage servicer which could expose the servicer to penalties should it fail to comply. This article provides a broad outline of these procedures and obligations.
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Value of Forbearance Arrangements Can Be Counted as Value Given By a Lender for a Deed in Lieu of Foreclosure
Ann Ustad Smith


According to the Seventh Circuit, the value of a forbearance arrangement can be counted along with the amounts due on outstanding loans as part of the “reasonably equivalent value” given by a lender for a deed in lieu of foreclosure.
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Are You Prepared For a Software Audit?
S. Edward Sarskas and Patricia L. Jenness


Are you familiar with the terms and conditions in your company’s IT and software license agreements? How many licensed software programs does your company use? Are you expected to “monitor” your use? Are you required to permit an audit of your “use” whenever the software publisher asks? What does “use” mean? Is usage determined per user, per device, or by some other metric? Are additional or different licenses needed when your company utilizes virtual desktops and mobile devices?
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FCC Chairman Issues “Fact Sheet” Announcing Proposed TCPA Declaratory Rulings
Michelle L. Dama


The Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, prohibits, among other things, calls or texts made to cellular telephones with an Automatic Telephone Dialing System or prerecorded messages. TCPA litigation is an ever-expanding area of concern for any business whose operations include contacting consumers via cellular phone for a variety of reasons, including mobile marketing and debt collection. Adding to this concern is that fact that the law has historically been interpreted in broad and uncertain ways – including interpretations of key definitions such as “autodialer” and revocation of “prior express consent.” In light of this ambiguity, business and industry groups have repeatedly petitioned the Federal Communications Commission (FCC) requesting clarification on the FCC’s prior interpretations.
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Supreme Court Opines on Opinions v. Facts in the Sale of Securities
Michael H. Altman and Brad R. Jacobsen


On March 24, 2015, the U.S. Supreme Court decided Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund et. al. The pension funds (Fund) had brought a claim against Omnicare, which significantly hinged on two sentences in Omnicare’s registration statement. The two sentences expressed Omnicare’s opinion (“We believe…”) that its contract arrangements were in compliance with applicable federal and state laws.
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SEC Proposes Executive Pay-Versus-Performance Disclosure Rule
Michael H. Altman and Vincent M. Morrone


For years, the U.S. Securities and Exchange Commission (SEC) has been proposing, revising and adjusting the executive compensation disclosure requirements that are contained in Item 402 of Regulation S-K; disclosure which is generally required to be included in prospectuses and proxy statements of reporting companies. They have gone back and forth between focusing on information to be provided through narrative discussion and that to be provided in tables. On April 29, 2015, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC proposed a new rule in the form of amendments to Item 402, which will require registrants to disclose a clear description of the relationship between executive compensation actually paid and the financial performance of the issuer.
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New Department of Labor Rule Gives Whistleblowing Employees Greater Protections Against Retaliation
Daniel A. Kaufman and Y. Douglas Yang


Despite employers’ best efforts to prevent, manage and defend against retaliation and whistleblower claims, such claims continue to grow across the country. Employers also must contend with the law’s ever-evolving interpretation of which activities and parties are covered by federal and state retaliation and whistleblower laws.
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SEC Targets Confidentiality Agreements that Could Deter Whistleblowers
Daniel A. Kaufman, Benjamin T. Johnson and Y. Douglas Yang


The U.S. Securities and Exchange SEC (SEC) recently announced a settlement in its first-ever enforcement action alleging that an engineering firm used confidentiality agreements that improperly restricted employees’ ability to discuss internal company investigations with the federal government. The SEC’s enforcement action sends a warning that it will be scrutinizing confidentiality agreements that “impede an individual from communicating directly with the SEC staff about a possible securities law violation."
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The Wisconsin Court of Appeals Issues an Important Clarification of the Standard for Insurance Coverage Determinations in Duty to Defend Cases
John D. Finerty, Jr.


The rule in Wisconsin for insurance coverage cases is that, when a policyholder tenders a claim to its insurance carrier for coverage, the carrier must intervene in the underlying action and seek a judicial determination as to whether or not coverage exists, while defending the insured. Insurers that deny coverage and refuse to defend a claim without a judicial determination risk losing the right to enforce coverage limits or raise other defenses if a court later determines that coverage exists. But what standard should a court, and before that, an insurer, use to determine whether or not the insurer has a duty to defend a claim? Is the entire policy subject to a coverage analysis, or only the grant of coverage? How and when are insurers allowed to rely on policy exclusions to deny coverage? The Wisconsin Court of Appeals answered these questions and resolved a conflict among two conflicting lines of cases in Marks v. Bedford Underwriters and Houston Casualty.
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Upcoming Programs

Growth Capital
Transactional Breakfast Briefing Series
Waukesha, WI 
October 7
, 2015

Growth Capital
Transactional Breakfast Briefing Series
Milwaukee, WI
October 15
, 2015

Other Resources

Banking and Financial Services Brochure

Ann Ustad Smith will be speaking at the American College of Bankruptcy's Seventh Circuit Regional Educational Program on Sept. 11, 2015, on a panel on “Successor Liability in Bankruptcy.”

Ann Ustad Smith will be speaking at the Wisconsin Bankers Association's Agricultural Lending School on Aug. 25, 2015, on a panel on "Problem Loans."


To succeed in an increasingly complex and competitive financial environment, banking and other financial service providers need every available advantage. Michael Best offers a full line of legal tools, advice and sophisticated counsel to assist regional, national and global financial services firms with a variety of legal issues, including:

  • Commercial Finance and Lending
  • Reorganization, Financial Restructuring and Workouts
  • Financial Institutions and Bank Regulatory Law
  • Derivatives
  • Public Finance
  • Commercial Litigation
  • Labor and Employment Relations
  • Intellectual Property and Litigation
  • Consumer Litigation Defense 

Read More about the Banking and Financial Services Industry Team.

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