ACIC Private Notes - March 2018

In November 2017, the NAIC adopted formal changes to its policies on private rating letters. This edition contains a memo from Sasha Kamper (Principal) and Chip Fisher (Morgan Lewis) explaining the changes and providing draft updates to the Model Form Note Purchase Agreements to cover the changes.

This edition also covers recent case law summaries from the New England Region (courtesy of Kevin Braun of Morgan Lewis) and the Southern Region (courtesy of Jeff Dutson of King & Spalding).

Finally, in honor of the 35^th anniversary of the ACIC, Melody Cross from Schiff Hardin has interviewed several members of the ACIC to get insight into the history of the college.

Private Rating Letter Rules

On November 13, 2017, the NAIC formally adopted changes to its Purposes & Procedures Manual, finalizing new policies governing private rating letters. Click here for a detailed memo on the changes and potential updates to the Model Form documents.

Recent Case Law Summaries

New England Updates

In Zelby Holdings, Inc. v. Videogenix, Inc., 92 Mass. App. Ct. 86 (Aug. 18, 2017), in a matter of first impression, the Appeals Court of Massachusetts held that actions based on a promissory note are subject to both the statute of limitations and the common-law partial payment rule. Click here for further details.

In American First Federal, Inc. v. Gordon , 173 Conn. App. 573 (June 6, 2017), the appellate court determined that an assignment of a commercial loan without a separate bill of sale in connection with an asset purchase was valid. In addition, the court applied post-judgment interest only to the outstanding principal balance of the loan given the express terms of the loan. Click here for further details.

Southern Updates

In Miller v. FiberLight, LLC, 343 Ga. App. 593 (Ga. Ct. App. 2017), the appellate court held that default fiduciary duties of care and loyalty apply to limited liability company agreements that do not plainly, unambiguously and explicitly eliminate such duties. Click here for further details.

In Gibson v. Ameris Bank , 420, S.C. 536, 804 S.E.2d 276, 2017 S.C. App. LEXIS 81, the appellate court held that a lender was not responsible for: (a) conduct of an employee that occurred prior to employment and over which the lender had no control; and (b) a breach of fiduciary duty by a third party where the lender had no actual knowledge of the breach. Click here for further details.

In Rebel Auction Co. v. Citizens Bank, 343 Ga. App. 81(Ct. App. Ga. 2017), the appellate court held that an auction company's failure to respond to requests for admissions leads to admittances, but summary judgment inappropriate where there was question of fact regarding the validity of a financing statement. Click here for further details.

In IPayment, Inc. v. Grainger , No. 15 CVS 2234, 2017 N.C. App. LEXIS 1087*; 808 S.E.2d 796, the Court of Appeals of North Carolina considered whether a purchaser waived its right to compel arbitration of a finance company's counterclaims and held that even though the purchaser had engaged in discovery, the finance company failed to present evidence that the purchaser acted inconsistently with its right to compel arbitration or that the finance company was prejudiced by the purchaser's actions. Click here for further details.

ACIC History - Interviews

Many of us have been in the ACIC for some time but do not know the history of the organization. Click here to read an interview with Tom Donahue (Prudential), Chip Fisher (Morgan Lewis), Howard MacKichan (Norton Rose) and Mark Zaander (Schiff Hardin) to learn what the college was like in the beginning.

American College of Investment Counsel

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