Top 10 Business Cases From the Past Year

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  • 1. Idaho State BarBusiness & Corporate Section Annual Meeting Civil Litigation in a Down Economy Top 10 Business Cases From the Past Year Wendy Gerwick Couture May 11, 2012
  • 2. McCann v. McCann,No. 37547, 2012 WL 798581 (Idaho March 13, 2012). CLOSE CORPORATION 26.6% TRUST, for 36.7% 36.7% benefit of founder’s wife SON 1 SON 2 and sons’ mother President & CEO
  • 3. McCann v. McCann,No. 37547, 2012 WL 798581 (Idaho March 13, 2012). CLOSE CORPORATION 26.6% TRUST, for 36.7% 36.7% benefit of founder’s wife SON 1 SON 2 and sons’ mother President & CEOClaim: Breach of Fiduciary Duty for “Squeeze Out” or “Freeze Out”
  • 4. McCann v. McCann,No. 37547, 2012 WL 798581 (Idaho March 13, 2012).FIRST: Court characterizes claim as direct, rather than derivative. KEY: harm to shareholder distinct from that suffered by other shareholders
  • 5. McCann v. McCann,No. 37547, 2012 WL 798581 (Idaho March 13, 2012).FIRST: Court characterizes claim as direct, rather than derivative. KEY: harm to shareholder distinct from that suffered by other shareholdersSECOND: Court quotes and applies the fiduciary duty standard from Wilkes v.Springside Nursing Home, Inc., 353 N.E.2d 657, 663 (Mass. 1976).
  • 6. McCann v. McCann,No. 37547, 2012 WL 798581 (Idaho March 13, 2012).FIRST: Court characterizes claim as direct, rather than derivative. KEY: harm to shareholder distinct from that suffered by other shareholdersSECOND: Court quotes and applies the fiduciary duty standard from Wilkes v.Springside Nursing Home, Inc., 353 N.E.2d 657, 663 (Mass. 1976). Wilkes: Two-step test: (1) Can controlling group demonstrate a legitimate business purpose for its action? (2) If so, can minority stockholder demonstrate that the same legitimate objective could have been achieved through an alternative course of action less harmful to the minority’s interest? The court must then “weigh the legitimate business purpose . . . against the practicability of a less harmful alternative.”
  • 7. Trotter v. Bank of New York Mellon,No. 38022, 2012 WL 975493 (Idaho March 23, 2012).
  • 8. Trotter v. Bank of New York Mellon,No. 38022, 2012 WL 975493 (Idaho March 23, 2012). Non-Judicial Foreclosure
  • 9. Trotter v. Bank of New York Mellon,No. 38022, 2012 WL 975493 (Idaho March 23, 2012). TRUSTEETROTTER Deed of•Maker of Trust Note •Grantor of Deed of Trust MERS Beneficiary of Deed of Trust Note (as nominee of Lender) COUNTRYWIDE HOME LOANS Lender
  • 10. Trotter v. Bank of New York Mellon,No. 38022, 2012 WL 975493 (Idaho March 23, 2012). TRUSTEETROTTER Deed of•Maker of Trust Note •Grantor of Deed of Trust MERS BANK OF Beneficiary of Records NEW YORK Deed of Trust assignment of MELLON Note (as nominee Deed of Trust Beneficiary of Lender) of Deed of Trust COUNTRYWIDE HOME LOANS Lender
  • 11. Trotter v. Bank of New York Mellon,No. 38022, 2012 WL 975493 (Idaho March 23, 2012). RECONTRUST TRUSTEE TrusteeTROTTER Deed of Records•Maker of Trust appointment of Note successor trustee •Grantor of Deed of Trust MERS Beneficiary of Records BANK OF Deed of Trust assignment of NEW YORK Note (as nominee Deed of Trust MELLON of Lender) Beneficiary of Deed of COUNTRYWIDE Trust HOME LOANS Lender
  • 12. Trotter v. Bank of New York Mellon,No. 38022, 2012 WL 975493 (Idaho March 23, 2012). Non- Institutes Judicial Foreclosure RECONTRUST TRUSTEE TrusteeTROTTER Deed of Records•Maker of Trust appointment of Note successor trustee •Grantor of Deed of Trust MERS Beneficiary of Records BANK OF Deed of Trust assignment of NEW YORK Note (as nominee Deed of Trust MELLON of Lender) Beneficiary of Deed of COUNTRYWIDE Trust HOME LOANS Lender
  • 13. Trotter v. Bank of New York Mellon,No. 38022, 2012 WL 975493 (Idaho March 23, 2012). Non- Institutes Judicial Foreclosure RECONTRUST TRUSTEE TrusteeTROTTER Deed of Records•Maker of Trust appointment of Note successor trustee •Grantor of Deed Authorize Assign initiation? of Trust MERS interest? Beneficiary of Records BANK OF Deed of Trust assignment of NEW YORK Note (as nominee Deed of Trust MELLON of Lender) Beneficiary of Deed of COUNTRYWIDE Assign Trust HOME LOANS Note? Lender
  • 14. Trotter v. Bank of New York Mellon,No. 38022, 2012 WL 975493 (Idaho March 23, 2012). “We hold that, pursuant to I.C. § 45-1505, a trustee may initiate nonjudicial foreclosure proceedings on a deed of trust without first proving ownership of the underlying note or demonstrating that the deed of trust beneficiary has requested or authorized the trustee to initiate those proceedings.”
  • 15. Trotter v. Bank of New York Mellon,No. 38022, 2012 WL 975493 (Idaho March 23, 2012). Contra (predating Trotter): Armacost v. HSBC Bank USA, No. 10-CV-274-EJL-LMB, 2011 WL 825151 (D. Idaho Feb. 9, 2011) (Larry M. Boyle, United States Magistrate Judge) (emphasis added). “This Court does not believe, however, that the inquiry ends with Defendants compliance with the Idaho non-judicial foreclosure statute. . . . One could not reasonably contend that compliance with a procedure gives substantive rights not otherwise possessed. The question remains whether Defendants right or authority to foreclose on the Property remains.”
  • 16. Idaho Development, LLC v. Teton View Golf Estates, LLC,152 Idaho 401, 272 P.3d 373 (Dec. 12, 2011). TETON VIEW GOLF ESTATES, LLC 33.3% IDAHO DEVELOPMENT, LLC
  • 17. Idaho Development, LLC v. Teton View Golf Estates, LLC, 152 Idaho 401, 272 P.3d 373 (Dec. 12, 2011). TETON VIEW GOLF ESTATES, LLC • promissory note$1,100,000 33.3% • partially secured by deed of trust IDAHO DEVELOPMENT, LLC
  • 18. Idaho Development, LLC v. Teton View Golf Estates, LLC, 152 Idaho 401, 272 P.3d 373 (Dec. 12, 2011). TETON VIEW GOLF ESTATES, LLC • promissory note$1,100,000 33.3% • partially secured by deed of trust IDAHO DEVELOPMENT, LLC Loan or Capital Contribution ?
  • 19. Idaho Development, LLC v. Teton View Golf Estates, LLC, 152 Idaho 401, 272 P.3d 373 (Dec. 12, 2011). TETON VIEW GOLF ESTATES, Priority if LLC Loan • promissory note$1,100,000 33.3% • partially Idaho secured by Development, deed of trust LLC IDAHO DEVELOPMENT, Subsequently LLC recorded lienholders Loan or Capital Contribution ?
  • 20. Idaho Development, LLC v. Teton View Golf Estates, LLC, 152 Idaho 401, 272 P.3d 373 (Dec. 12, 2011). Priority if TETON VIEW GOLF ESTATES, Priority if Capital LLC Loan Contribution • promissory note$1,100,000 33.3% • partially Idaho Subsequently secured by Development, recorded deed of trust LLC lienholders IDAHO DEVELOPMENT, Subsequently Idaho LLC recorded Development, lienholders LLC Loan or Capital Contribution ?
  • 21. Idaho Development, LLC v. Teton View Golf Estates, LLC,152 Idaho 401, 272 P.3d 373 (Dec. 12, 2011). “DEBT RECHARACTERIZATION” • KEY: intent of the parties at the time of the transaction • Question of fact • Party seeking to recharacterize carries the burden of proof
  • 22. Idaho Development, LLC v. Teton View Golf Estates, LLC,152 Idaho 401, 272 P.3d 373 (Dec. 12, 2011). “DEBT RECHARACTERIZATION” • KEY: intent of the parties at the time of the transaction • Question of fact • Party seeking to recharacterize carries the burden of proof DEBT CAPITAL• listed in corporate records as creditors • not listed in corporate records as creditors
  • 23. Idaho Development, LLC v. Teton View Golf Estates, LLC,152 Idaho 401, 272 P.3d 373 (Dec. 12, 2011). “DEBT RECHARACTERIZATION” • KEY: intent of the parties at the time of the transaction • Question of fact • Party seeking to recharacterize carries the burden of proof DEBT CAPITAL• listed in corporate records as creditors • not listed in corporate records as• documentation surrounding creditorstransaction refers to the advance as aloan• documentation calls for regularpayments and interest
  • 24. Idaho Development, LLC v. Teton View Golf Estates, LLC,152 Idaho 401, 272 P.3d 373 (Dec. 12, 2011). “DEBT RECHARACTERIZATION” • KEY: intent of the parties at the time of the transaction • Question of fact • Party seeking to recharacterize carries the burden of proof DEBT CAPITAL• listed in corporate records as creditors • not listed in corporate records as• documentation surrounding creditorstransaction refers to the advance as a • no capital outside of advanceloan • portion of loan was unsecured• documentation calls for regularpayments and interest
  • 25. CML V, LLC v. Bax,28 A.3d 1037 (Del. Sep. 2, 2011). May the creditor of an insolvent LLC assert a derivative claim on behalf of the LLC?
  • 26. INSOLVENT DELAWARE CORPORATION Assert Breach of Fiduciary Duty Claim Officers & Derivatively on Behalf of Corporation DirectorsN. Am. Catholic Educ. Programming Found., Inc. v. Gheewalla, Creditors930 A.2d 92, 101 (Del. 2007).“Individual creditors of an insolvent corporation have the sameincentive to pursue valid derivative claims on its behalf thatshareholders have when the corporation is solvent.”
  • 27. CML V, LLC v. Bax, 28 A.3d 1037 (Del. Sep. 2, 2011).6 Del. C. § 18-1001 Right to bring actionA member or an assignee of a limited liabilitycompany interest may bring an action in theCourt of Chancery in the right of a limitedliability company to recover a judgment in itsfavor . . .6 Del. C. § 18-1002 Proper plaintiffIn a derivative action, the plaintiff must be amember or an assignee of a limited liabilitycompany interest at the time of bringing theaction and . . .
  • 28. CML V, LLC v. Bax, 28 A.3d 1037 (Del. Sep. 2, 2011).6 Del. C. § 18-1001 Right to bring action This section authorizesA member or an assignee of a limited liability members andcompany interest may bring an action in the assignees toCourt of Chancery in the right of a limited assert derivativeliability company to recover a judgment in its claims.favor . . .6 Del. C. § 18-1002 Proper plaintiffIn a derivative action, the plaintiff must be amember or an assignee of a limited liabilitycompany interest at the time of bringing theaction and . . .
  • 29. CML V, LLC v. Bax, 28 A.3d 1037 (Del. Sep. 2, 2011).6 Del. C. § 18-1001 Right to bring action This section authorizesA member or an assignee of a limited liability members andcompany interest may bring an action in the assignees toCourt of Chancery in the right of a limited assert derivativeliability company to recover a judgment in its claims.favor . . .6 Del. C. § 18-1002 Proper plaintiff This section limitsIn a derivative action, the plaintiff must be a the plaintiffs in ALLmember or an assignee of a limited liability derivative actionscompany interest at the time of bringing the to members andaction and . . . assignees.
  • 30. CML V, LLC v. Bax,28 A.3d 1037 (Del. Sep. 2, 2011). “Ultimately, LLCs and corporations are different; investors can choose to invest in an LLC, which offers one bundle of rights, or in a corporation, which offers an entirely separate bundle of rights.”
  • 31. CML V, LLC v. Bax,28 A.3d 1037 (Del. Sep. 2, 2011). “Ultimately, LLCs and corporations are different; investors can choose to invest in an LLC, which offers one bundle of rights, or in a corporation, which offers an entirely separate bundle of rights.” “CML could have negotiated for a provision that would convert its interests to that of an ‘assignee’ in the event of insolvency. Or, it could have negotiated for a term that would give CML control of the LLC’s governing body in such an event. These are but two examples.”
  • 32. Achaian, Inc. v. Leemon Family LLC,25 A.3d 800 (Del. Ch. May 23, 2011). Omniglow, LLC 50% 20% 30% Achaian, Leeman Holland Inc. Family, LLC Trust
  • 33. Achaian, Inc. v. Leemon Family LLC,25 A.3d 800 (Del. Ch. May 23, 2011). Omniglow, LLC 50% 20% 30% Achaian, Leeman Holland Inc. Family, LLC Trust Without Leeman’s consent, purported to transfer/assign entire interest
  • 34. Achaian, Inc. v. Leemon Family LLC,25 A.3d 800 (Del. Ch. May 23, 2011). Omniglow, LLC 50% 20% 30% Achaian, Leeman Holland Inc. Family, LLC Trust Did this assignment Without Leeman’s include consent, purported voting to transfer/assign rights? entire interest
  • 35. Achaian, Inc. v. Leemon Family LLC,25 A.3d 800 (Del. Ch. May 23, 2011). Default: Voting rights not assigned. 6 Del. C. §17-702 – “The assignee of a member’s limited liability company interest shall have no right to participate in the management of the business and affairs of a limited liability company except as provided in a limited liability company agreement.” BUT, the default can be altered in the LLC agreement.
  • 36. Achaian, Inc. v. Leemon Family LLC, 25 A.3d 800 (Del. Ch. May 23, 2011).7.1 Transfer of Interest. [A]Member may transfer all or anyportion of its Interest in Omniglowto any Person at any time. . . .
  • 37. Achaian, Inc. v. Leemon Family LLC, 25 A.3d 800 (Del. Ch. May 23, 2011). Defined as “the entire ownership interest of the Member”7.1 Transfer of Interest. [A]Member may transfer all or anyportion of its Interest in Omniglowto any Person at any time. . . .
  • 38. Achaian, Inc. v. Leemon Family LLC, 25 A.3d 800 (Del. Ch. May 23, 2011). Defined as “the entire ownership interest of Permits free the Member” transfer of the “entire” Interest,7.1 Transfer of Interest. [A] including thatMember may transfer all or any Interest’sportion of its Interest in Omniglow associated voting rights.to any Person at any time. . . .
  • 39. Achaian, Inc. v. Leemon Family LLC, 25 A.3d 800 (Del. Ch. May 23, 2011). Defined as “the entire ownership interest of Permits free the Member” transfer of the “entire” Interest,7.1 Transfer of Interest. [A] including thatMember may transfer all or any Interest’sportion of its Interest in Omniglow associated voting rights.to any Person at any time. . . .7.2 Admission of New Members.No Person shall be admitted as aMember . . . without the writtenconsent of the Member[s]. . . .
  • 40. Achaian, Inc. v. Leemon Family LLC, 25 A.3d 800 (Del. Ch. May 23, 2011). Defined as “the entire ownership interest of Permits free the Member” transfer of the “entire” Interest,7.1 Transfer of Interest. [A] including thatMember may transfer all or any Interest’sportion of its Interest in Omniglow associated voting rights.to any Person at any time. . . .7.2 Admission of New Members. Consent onlyNo Person shall be admitted as a required if theMember . . . without the written transferee is notconsent of the Member[s]. . . . already a Member.
  • 41. Achaian, Inc. v. Leemon Family LLC,25 A.3d 800 (Del. Ch. May 23, 2011). Omniglow, LLC 50% 50% Leeman Achaian, Family, LLC Inc.
  • 42. Gerber v. Enter. Prods. Holdings, LLC,No. 5989-VCN, 2012 WL 34442 (Del. Ch. Jan. 6, 2012). EPE, L.P. Enterprise Products GP (General Limited Partner) Partners
  • 43. Gerber v. Enter. Prods. Holdings, LLC,No. 5989-VCN, 2012 WL 34442 (Del. Ch. Jan. 6, 2012).“A limited partnership agreement may expand, restrict, or eliminate the duties(including fiduciary duties) that any person may owe to either the limitedpartnership or any other party to the limited partnership agreement,‘provided that the partnership agreement may not eliminate the impliedcontractual covenant of good faith and fair dealing.’”Quoting 6 Del. C. § 17-1101.
  • 44. Gerber v. Enter. Prods. Holdings, LLC, No. 5989-VCN, 2012 WL 34442 (Del. Ch. Jan. 6, 2012).Section 7.9(a) of the Limited PartnershipAgreement:“ … any resolution or course of action by[Enterprise Products GP] or its Affiliated in respectof such conflict of interest shall be permitted anddeemed approved by all Partners, and shall notconstitute a breach . . . of any duty stated orimplied by law or equity, if the resolution or courseof action in respect of such conflict of interest isi. approved by Special Approval,ii. approved by a majority of the Units . . .,iii. on terms no less favorable to [EPE] than those generally being provided to or available from unrelated third parties, oriv. fair and reasonable to [EPE] . . .(emphasis added)
  • 45. Gerber v. Enter. Prods. Holdings, LLC, No. 5989-VCN, 2012 WL 34442 (Del. Ch. Jan. 6, 2012).Section 7.9(a) of the Limited PartnershipAgreement:“ … any resolution or course of action by[Enterprise Products GP] or its Affiliated in respectof such conflict of interest shall be permitted anddeemed approved by all Partners, and shall notconstitute a breach . . . of any duty stated orimplied by law or equity, if the resolution or course Approval by a majority of theof action in respect of such conflict of interest is members of the Audit andi. approved by Special Approval, Conflicts Committeeii. approved by a majority of the Units . . ., (composed of 3 or moreiii. on terms no less favorable to [EPE] than those independent directors) generally being provided to or available from unrelated third parties, oriv. fair and reasonable to [EPE] . . .(emphasis added)
  • 46. Gerber v. Enter. Prods. Holdings, LLC,No. 5989-VCN, 2012 WL 34442 (Del. Ch. Jan. 6, 2012).“A limited partnership agreement may expand, restrict, or eliminate the duties(including fiduciary duties) that any person may owe to either the limitedpartnership or any other party to the limited partnership agreement,‘provided that the partnership agreement may not eliminate the impliedcontractual covenant of good faith and fair dealing.’”Quoting 6 Del. C. § 17-1101.
  • 47. Gerber v. Enter. Prods. Holdings, LLC,No. 5989-VCN, 2012 WL 34442 (Del. Ch. Jan. 6, 2012).“A limited partnership agreement may expand, restrict, or eliminate the duties(including fiduciary duties) that any person may owe to either the limitedpartnership or any other party to the limited partnership agreement,‘provided that the partnership agreement may not eliminate the impliedcontractual covenant of good faith and fair dealing.’”Quoting 6 Del. C. § 17-1101. “When a contract confers discretion on one party, the implied covenant requires that the discretion be used reasonably and in good faith. . . . Thus, Enterprise Products GP had a duty, under the implied covenant, to act in good faith if it took advantage of the Special Approval process.”
  • 48. Gerber v. Enter. Prods. Holdings, LLC, No. 5989-VCN, 2012 WL 34442 (Del. Ch. Jan. 6, 2012).Section 7.9(a) of the Limited Partnership Duty to act in good faith inAgreement: using the Special Approval process.“ … any resolution or course of action by[Enterprise Products GP] or its Affiliated in respectof such conflict of interest shall be permitted anddeemed approved by all Partners, and shall notconstitute a breach . . . of any duty stated orimplied by law or equity, if the resolution or courseof action in respect of such conflict of interest isi. approved by Special Approval,ii. approved by a majority of the Units . . .,iii. on terms no less favorable to [EPE] than those generally being provided to or available from unrelated third parties, oriv. fair and reasonable to [EPE] . . .(emphasis added)
  • 49. Gerber v. Enter. Prods. Holdings, LLC, No. 5989-VCN, 2012 WL 34442 (Del. Ch. Jan. 6, 2012).Section 7.9(a) of the Limited Partnership Duty to act in good faith inAgreement: using the Special Approval process.“ … any resolution or course of action by[Enterprise Products GP] or its Affiliated in respect Section 7.10(b) of the Limitedof such conflict of interest shall be permitted and Partnership Agreement:deemed approved by all Partners, and shall notconstitute a breach . . . of any duty stated or “[Enterprise Products GP] may consultimplied by law or equity, if the resolution or course with legal counsel, . . . investmentof action in respect of such conflict of interest is bankers and other consultants andi. approved by Special Approval, advisors . . ., and any act taken . . . inii. approved by a majority of the Units . . ., reliance upon the opinion . . . as toiii. on terms no less favorable to [EPE] than those matters that [Enterprise Products GP] generally being provided to or available from reasonably believes to be within such unrelated third parties, or Person’s professional or expertiv. fair and reasonable to [EPE] . . . competence shall be conclusively(emphasis added) presumed to have been done . . . in good faith . . .” (emphasis added)
  • 50. Gerber v. Enter. Prods. Holdings, LLC,No. 5989-VCN, 2012 WL 34442 (Del. Ch. Jan. 6, 2012).“A limited partnership agreement may expand, restrict, or eliminate the duties(including fiduciary duties) that any person may owe to either the limitedpartnership or any other party to the limited partnership agreement,‘provided that the partnership agreement may not eliminate the impliedcontractual covenant of good faith and fair dealing.’”Quoting 6 Del. C. § 17-1101. “A limited partnership agreement may not validly state that ‘the implied covenant is not part of this agreement,’ but if a limited partnership agreement simply has no gaps, then the implied covenant will never apply to that agreement.”
  • 51. Momot v. Mastro,652 F.3d 982 (9th Cir. June 22, 2011). ARBITRATION CLAUSES Are the merits of this dispute within the scope of the arbitration clause? Doubts resolved in favor of arbitration.
  • 52. Momot v. Mastro,652 F.3d 982 (9th Cir. June 22, 2011). ARBITRATION CLAUSES Who decides – the court or the arbitrators? Are the merits of this dispute within the scope of the arbitration clause? Doubts resolved in favor of arbitration.
  • 53. Momot v. Mastro,652 F.3d 982 (9th Cir. June 22, 2011). ARBITRATION CLAUSES Who decides – the court or the arbitrators? Are the merits of this dispute within the scope of Left to the court unless the arbitration clause? parties clearly and unmistakably provide otherwise. Doubts resolved in favor of arbitration.
  • 54. Momot v. Mastro,652 F.3d 982 (9th Cir. June 22, 2011).In the following arbitration clause, the parties clearly and unmistakably agreedto arbitrate the question of arbitrability: 4. Resolution of Disputes. (a) Arbitration. If a dispute arises out of or relates to this Agreement, the relationships that result from this Agreement, the breach of this Agreement or the validity or application of any of the provisions of this Section 4, and, if the dispute cannot be settled through negotiation, the dispute shall be resolved exclusively by binding arbitration. (Emphasis added)
  • 55. Business Roundtable v. SEC,647 F.3d 1144 (D.C. Cir. July 22, 2011). Exchange Act Rule 14a-11 (proxy access for shareholder- nominated candidates)
  • 56. Business Roundtable v. SEC,647 F.3d 1144 (D.C. Cir. July 22, 2011). SEC has statutory duty to consider the effect of a new rule on “efficiency, competition, and capital formation.” 15 U.S.C. §§ 77b(b), 78c(f) & 80a-2(c).
  • 57. Business Roundtable v. SEC,647 F.3d 1144 (D.C. Cir. July 22, 2011). SEC has statutory duty to consider the effect of a new rule on “efficiency, competition, and capital formation.” 15 U.S.C. §§ 77b(b), 78c(f) & 80a-2(c). “Here the Commission inconsistently and opportunistically framed the costs and benefits of the rule; failed adequately to quantify the certain costs or to explain why those costs could not be quantified; neglected to support its predictive judgments; contradicted itself; and failed to respond to substantial problems raised by commenters.”
  • 58. Business Roundtable v. SEC,647 F.3d 1144 (D.C. Cir. July 22, 2011). Dodd-Frank Act JOBS Act
  • 59. Business Roundtable v. SEC,647 F.3d 1144 (D.C. Cir. July 22, 2011). Dodd-Frank Act JOBS Act Congressional Testimony of Mary L. Schapiro, Chairman of the SEC April 17, 2012 “[T]he SEC’s Chief Economist and General Counsel have jointly developed new guidance for conducting economic analysis, taking into account the recommendations made in the reports from the GAO and OIG as well as comments from others, including Members of Congress and the courts.”
  • 60. Gibson v. Credit Suisse AG, RS-AND Fund, LP v. KMP1:10-CV-001-EJL-REB, 2012 SPE LLC, No. 4:11-CV-00175,WL 1253007 (D. Idaho 2012 WL 1288762 (D. IdahoMarch 30, 2012) (Lodge, J.). April 16, 2012) (Winmill, J.).Developer’s lender did not owe fiduciary Investors selling part of their profitduty to purchasers of real property and participation interest in a venture did nothomes in resort-style developments. owe fiduciary duty to purchaser.
  • 61. Gibson v. Credit Suisse AG, RS-AND Fund, LP v. KMP1:10-CV-001-EJL-REB, 2012 SPE LLC, No. 4:11-CV-00175,WL 1253007 (D. Idaho 2012 WL 1288762 (D. IdahoMarch 30, 2012) (Lodge, J.). April 16, 2012) (Winmill, J.).Developer’s lender did not owe fiduciary Investors selling part of their profitduty to purchasers of real property and participation interest in a venture did nothomes in resort-style developments. owe fiduciary duty to purchaser.“[T]he allegations only go to show, at “A bare allegation of control overbest, that Credit Suisse acted as a lender consideration paid cannot supply theto the developers in an arms-length factual indicia required for a finding of alender-borrower relationship.” fiduciary duty between parties to a contract negotiated at arms-length, even if the transaction involves an ‘investment opportunity.’”
  • 62. Thank you!Wendy Gerwick Couturewgcouture@uidaho.com