Thursday, May 25, 2017

"You Cannot Plead Yourself Around Reality."

I can't count the number of times over the last thirty years I've wanted to say those exact words to every fancy big firm DC or New York lawyer who saunters down South to show us how to litigate my opposing counsel.

I really want to have a beer with this Judge Carnes guy. The dude writes so well and in such an engaging manner often on dry or complicated issues, I'm not sure what excites me more: a new opinion authored by Chief Judge Carnes or bumping into Judge Ungaro at an art exhibit or the theatre and marveling at her sartorial elegance a new opinion upholding Judge Ungaro's ruling below (who the hell am I kidding?)

In this opinion regarding fraudulent transfer issues, I get both.

Chief Judge Carnes again lets it flow from the start, with beautiful alliteration.
For want of good corporate officers, BankUnited Financial Corporation engaged in risky lending practices before November 2008. For want of good lending practices, BankUnited became insolvent. For want of solvency, BankUnited’s transfers of money to its subsidiary were fraudulent. 
Wanting their money back, BankUnited’s creditors sued its officers for authorizing those transfers. Wanting protection from the resulting liability, the officers asked their insurer —U.S. Specialty—to indemnify them. Not wanting to do that, U.S. Specialty refused based in part on a policy exclusion that barred coverage for claims “arising out of” conduct that occurred before November 2008. The question is whether the fraudulent transfers “arose out of” the officers’ pre-November 2008 misconduct.
And this zinger:
Zucker also points out that he would not have had to prove that the officers engaged in misconduct in order to prevail on his fraudulent transfer claim. That does not, however, mean there was no causal connection between the officers’ deeds and the demise of the Parent Bank.

Zucker cannot plead himself around reality.
You know how this one ends.
Zucker contends that the district court erred when it concluded that the fraudulent transfer claims in the bankruptcy complaint fell within the Prior Acts Exclusion in the U.S. Specialty policy. We disagree with him and agree with the district court.
Me too, Judge.


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