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УСУ Message Board

  • darilynchristenbury Mar 15, 2013 6:48 PM Flag

    Lender Liability Lawsuit

    When a bank or bondholder lends money to a bankrupt company in order to steal the equity, they have a Lender's Liability - essentially it is illegal for management or the board to acquiesce to bond buyers, banks, and other lenders just because they cant find a legitimate owner for the company. It is also illegal for the lenders to take an equity position through a subterfuge such as this. The company should be put into receivership until it's fair value can be ascertained. This type of deal is what caused Glass-Steagall to be enacted. Even though GS was abolished, lender's liability laws still exist.

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