New Banks Opening in Tennessee is Great News for Creditor Lawyers

Nashville is a hot market right now.  One statistic I’ve seen says that anywhere from 70 to 100 new people move to the Nashville area every day.

And, it’s not just people. It’s also businesses. And banks. Today, the Nashville Business Journal reports that JPMorgan Chase is opening its first standalone branch in Nashville. Earlier this year, PNC Bank announced its own expansion into the Nashville market.

This great news for bank lawyers in Nashville, since more banks means more loans for lawyers to work on (both good and bad loans–we’ll take either).

And, it is particularly good news for Tennessee creditor rights lawyers when a national bank moves into Tennessee. As I mentioned a few years ago, it introduces new assets into Tennessee for garnishments and bank levies.

Like I said in that March 2018 post:

What if the debtor has all his assets in that foreign state, but he banks at a national bank with offices all over the country? And what if that bank has a branch in Tennessee? The answer is that you can levy on that bank account.

So, I say “Welcome” to all these new banks coming to Tennessee.

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Good Article on Tennessee’s Post-Foreclosure Deficiency Statute

This month’s Tennessee Bar Association Journal has a good article on the new post-foreclosure deficiency statute, Tenn. Code Ann. § 35-5-118, titled “Deficiency Judgments after Foreclosure Sales.”

The article provides a detailed review of the cases construing that very ambiguous statute, which was enacted in 2010 and became effective September 1, 2010. Here’s what I wrote about the new law, back in 2010.

As you’ll recall, I litigated and won the first ever case construing the new law, in December 2012. My case was the GreenBank v. Sterling Ventures case, which is analyzed in the article.

If you’re a banker, a bank lawyer, or a defense lawyer helping some borrower clients, be sure to look at this article. It’s a weird law, and, as the last few paragraphs of the article suggest, there’s still a lot of things that are unknown/unclear about how Tennessee courts are going to apply it in the future.

 

Will an Adversary Proceeding Survive the Dismissal of the Bankruptcy Case? Maybe.

Eight years ago (8 years! You are reading a law blog that has lasted for 8 years!), I talked about the difference between a bankruptcy discharge and a dismissal.

The tl;dr version for creditors? Discharge is bad; dismissal is good.

But, what if you’re a creditor and the debtor has filed an adversary proceeding against you, but then the bankruptcy case is dismissed?

The tl;dr version? It depends.

Generally, the dismissal of the underlying bankruptcy case results in the dismissal of related adversary proceedings because federal jurisdiction is “premised upon the nexus between the underlying bankruptcy case and the related proceedings.” But, there are exceptions.

One such exception is for proceedings to enforce sanctions and contempt for violation of the automatic stay. A Bankruptcy Court will retain jurisdiction “for the purpose of vindicating the court’s own authority and to enforce its own orders.” See In re Bankston, 1:12-BK-14022-SDR, 2015 WL 6126440, at *2 (Bankr. E.D. Tenn. Oct. 15, 2015)

Basically, the reasoning goes, an action for contempt of court resulting from a party’s blatant disregard of the Bankruptcy Code and the authority of the Bankruptcy Court is something that the Bankruptcy Court takes very seriously and will enforce, independent of whether the underlying case still exists.

The reasoning is different for other types of proceedings that are dependent on the underlying case, like actions to recover avoidance preferences.

 

Courts Revisit, and Affirm, Requirement of Possessory Bond in Eviction Appeals

Here’s a  quick reminder about appeals of detainer and eviction judgments in Tennessee.

Remember, a tenant who loses in General Sessions  has the right to appeal that detainer judgment. But, in order to retain the property, that tenant has to post a bond equal to one year’s rental value of the real property.

But, what if the tenant files an appeal and doesn’t post that giant bond (or otherwise find a dummy to sign off on the bond as surety)?

The Tennessee Supreme Court waded into these waters in an opinion from December 2013 and said that a detainer appeal without the “one year rent” bond is still an effective appeal, but it doesn’t help the defendant in any way in keeping the property.

Earlier in the summer, the Tennessee Court of Appeals issued another opinion on that issue. In that opinion, the Court noted that the appeal bond requirement to retain possession applies to appeals as noted under Tenn. Code Ann. § 29-18-130(b)(2), as well as petitions for writs of certiorari under Tenn. Code Ann. § 29-18-129.

This is an obscure part of the law, but lots of Courts are covering this ground and reaching the same conclusion.

Last note: If the tenant is only appealing the monetary part of the judgment, no possessory bond is needed to have an effective appeal.

7% and Rising: Tennessee’s Post-Judgment Interest Rate Continues to Go Up

About this time last year, I noted that the statutory rate of interest on Tennessee judgments was continuing to increase.  At the time, the rate was 6.25%.

After bumping up to 6.5% in January 2018, it has now risen again to 7.0% (effective July 1, 2018).

As you’ll recall from my post in February 2013, Tennessee switched from a flat-rate of 10% to a variable rate under the (then) new version of Tenn. Code Ann. § 47-14-121.

As a creditor, this is great news. As a creditor lawyer, it’s kind of a pain in the neck.

Now, when I’m asked to prepare a payoff, I have to check the Tennessee Administrative Office of the Courts website to see what the applicable rate is. Then, for any increases or decreases, I have to adjust my math for that time period.

Come See Me, an “All-Star”, Talk on Ethical Online Marketing in November

I’ve gotten a little stingy about my availability for speaking engagements. Long story short, it’s sort of a pain in the neck.

But, I agreed to teach for the Tennessee Attorneys Memo group, because they have the best marketing materials. Specifically, they lead with the line: “The 12th Annual Tennessee Law Conference boasts an all-star cast of prominent Tennessee judges and attorneys, featuring David Anthony, Gail Ashworth, and James Bryan Moseley.”

So, if you give me top billing and refer to me as an all-star, I’m there.

I’m teaching on November 15, 2018, for the section titled “Ethical Online Marketing.” This is a “dual” credit course, meaning you’ll get ethics and general CLE credit. Plus, I am probably the most prolific blogging, tweeting,  and social media’ing lawyer in town. (Edited: Since publishing this post, this assertion has been questioned by a local attorney.)

The real challenge will be keeping people in their seats and paying attention at 4pm, so I plan to super-charge this talk with lots of examples of terrible and/or unethical online marketing examples.

Attend the TBA Creditors Practice Forum

The Tennessee Bar Association has asked me to teach at the 2018 Creditors Practice Forum, on September 26, 2018.

This half-day seminar is a well-attended and well-produced CLE event, designed to provide both the basics, as well as some advanced “deep-dives,” into a variety of topics in creditor’s rights practice in Tennessee.

This year, the topics will include presentations on:

  • Charging Orders and Theories of Successor Liability
  • Telephone Consumer Protection Act
  • Bankruptcy Court Stay Violations
  • Consumer Financial Protection Bureau Ethical Considerations

The full agenda can be found here.  Also, lunch is provided. If you’re going to CLE, might as well get a free-ish lunch.