Trustee Representation in Foreclosure
- Client: Illinois bank
- Date: Jan 20, 2010
- Location: Indiana, Michigan and Wisconsin
Summary:
Schiff Hardin represented a bank in Illinois in its role as corporate trustee for three separate municipal bond financings in the states of Wisconsin, Michigan and Indiana, all of which involved loans by municipalities located in those states to a single operator of nursing homes.
Our firm represented the trustee in foreclosure suits in all three states, ultimately obtaining the proceeds from the sale of the homes for the benefit of the bondholders. Each of the three issues went into default simultaneously (together with approximately 27 other municipal bond issues, the proceeds of which had been lent to the same nursing home operator). In all, seven corporate trust departments were involved in the related defaults.
As part of a class action lawsuit brought by the holders of the approximately 30 municipal bond issues, all of the financial institutions acting as trustees — other than our client — agreed to waive all of their accrued and unpaid ordinary and extraordinary fees (including related legal fees) and contributed over $1 million to the settlement fund. Our client received payment in full of all of its ordinary and extraordinary fees from the assets of the trust estates.