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Stefanie Greer
Kristen Gudewicz
2016 Annual Fall Meeting - Save the Date
October 20-21, 2016

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ACIC Private Notes                       September 2016
Welcome to the September 2016 issue of ACIC Private Notes! It is starting to feel like fall . . . and that means you should all be gearing up for the 2016 Fall Annual Meeting and Education Conference.  This year's conference is entitled Make Investments Great Again!  Co-Chairs Jamie Cain of Sutherland and Bryan Cho of Met Life have put together an exciting election themed program.  If you have not registered already, click here.

On the topic of CLE, the ACIC is putting on a webinar on Thursday, September 29th from 4:00:5:00 pm (EST) entitled Recent Developments in Private Equity. The program will be hosted by Fried Frank and features Emil Buchman of Fried Frank, Michael Hong of Paul Weiss, Caroline Sandberg of Fried Frank and Todd Shenkin of Met Life. Click here for more information.  

In this month's newsletter you will find links to summaries of case law developments in the South, New England and the Midwest, thanks to our friends at King & Spalding, Morgan Lewis and Greenberg Traurig, respectively.

You will also find an article prepared by Chapman & Cutler on the latest developments in the bankruptcy courts' treatment of midstream oil and gas contracts, a complicated issue we will no doubt continue to hear about in the months ahead. We thank Steve Wilamowsky and Aaron Krieger for putting this together, and ask that you let us know if you have an interesting article idea or recent development to share with your ACIC colleagues; we would be pleased to consider your submission for our next issue.

Finally, this issue includes updates from the ACIC Committees. The committees have been hard at work improving the ACIC website and directory, preparing for the annual meeting and upcoming CLE programs, distributing current news to our membership, and bringing new members into the fold. 

New Case Law Summaries

Southern Update
A seller of a loan portfolio breached a representation that certain loans in the portfolio were cross-collateralized. Because a cross-default provision and a stock pledge did not provide the buyer with post-default rights functionally equivalent to the rights afforded by cross-collateralization, the Court found that the misrepresentation...Click here for more information.

Provisions in a promissory note requiring payment of default interest at a rate of three percent more than the non-default rate and late charges of five percent at the past due amount are not excessive and not unreasonable under Georgia law, and should be applied in calculating amounts owed...Click here for more information.

Allegations that $450,000 advance was a capital contribution rather than a loan stated a plausible claim for recharacterization sufficient to survive a motion to dismiss notwithstanding a reference... Click here for more information.

Majority shareholder lacked standing to pursue individual claims against officer because officer owed no special duty to the shareholder and the shareholder did not suffer injuries that were separate and distinct from those suffered by the corporation itself.  Click here for more information.

New England Update

A default interest rate of 18% is not substantively unconscionable. Petroleum & Franchise Capital LLC v. Tejany Petroleum Naperville LLC, No. 3:15-CV-00156 (JCH)...Click here for more information.

After Guarantor paid the debt on which he and co-guarantor were guarantors, the guarantor became subrogated to lender's position against the co-guarantor. In re Morrison, No. 15-14094-MSH, 2016 WL 4512164...Click here for more information.

A cause of action against a guarantor accrues at the time of breach of the guaranty.  JB Mortgage Co., LLC v. Ring, 90 Mass. App. Ct. 93 (Aug. 26, 2016).  Click here for more information.

Midwest Update

A contractual waiver of a jury trial is invalid if it is made without actual knowledge and is also unenforceable where it is both procedurally and substantively unconscionable. Parsons v. Associated Banc-Corp, 2016 WI App 44, 370 Wis. 2d 112, 881 N.W. 2d 793, 2016 Wisc. Click here for more information.

A promise to forgive debt is a "credit agreement' as defined under the Relevant Minnesota Statutes and requires a writing to be enforceable. (NJK Holding Corp. v. The Araz Group Inc., 2016... Click here for more information.

Midstream Oil & Gas Contracts Seeing Changes Following Bankruptcy Court Scrutiny

In recent oil and gas company bankruptcies, there has been much discussion and litigation over whether midstream contracts can be rejected by the debtor. Legal commentators and analysts believe this decision will materially affect the drafting of future midstream services agreements. Click here to read more.

Committee Updates

Website Committee

Some of you may have noticed that you didn't get a 2016 Membership Directory. Just so you don't think you were missed, no one did. But that is because we now have something better. On the ACIC website, click on the tab "Members Area" (you have to log in first) and you will see on the bottom of the drop down box "Member Directory (pdf)". Click on that and what you see will look very familiar-and if you want to print it, you can keep it right by your desk just like the old mailed directory. It has all the information the old directory had. So why is this better? For one, it has pictures! (Okay, first you have to load your picture but that is easy.) But more importantly, the pdf version updates regularly so that if you print it from time to time you will get the most update information for the membership (new members, new addresses, new firms). Unlike the old directory, where you would have to wait a year or so to get info that might already be out of date. The information in the pdf directory comes directly from the online membership database. We encourage everyone to print the directory, look at their information and confirm it is up to date. And load a picture! Also, please look at your listing in the back under the Listing of Fellows by Professional Affiliation. If you are not listed correctly (or you are not listed under the same company name as your colleagues and should be) please correct in your on-line profile. It makes it much easier for all the other folks to find you!

Education Committee

The Education Committee has been busy helping with the Annual Meeting, at which the ACIC will pioneer the use of interactive technology. We are excited about the program, with its timely election theme, and encourage all members to attend and bring their colleagues! We are also working on the upcoming Private Equity CLE (described above) and have begun work on our third 2016 one-hour CLE, which we expect will occur in early December, will be hosted by Chapman and Cutler and will cover Recent Developments in Bankruptcy and Creditor's Rights.

Communications Committee

The Communication Committee successfully produced the Private Notes newsletter in each month in 2016, overseen by our Co-Editors Stefanie Greer and Kristin Gudewicz. January and July issues included a message from our President Brenda Page and highlighted our newest members. Our May issue provided a wonderful summary of the Spring Forum, complete with pictures. We published original content from Chapman & Cutler and King & Spalding. If any members would like to submit original material for consideration in future publications, please contact Stefanie Greer or Kristin Gudewicz.

The Membership Committee

The Membership Committee is charged with administering the process of electing individuals for membership in the College, and does so by receiving nominations for fellowship from other Fellows of the College, and reviewing the applications of nominated individuals for compliance with the relevant membership criteria. The Committee makes recommendations to the Trustees with respect to each application, and the Trustees are then tasked with acting on applications for fellowship.

The Membership Committee continues to actively explore avenues to reach out to potential new members, with a goal of maintaining and deepening the vibrancy and diversity of the College, and also encourages Fellows retiring from practice to continue to participate with and contribute to the College as Emeritus members. The Committee's tasks are continually supported by our existing Fellows, many of whom actively promote membership in the College to their colleagues and other professional acquaintances. Inquiries concerning Fellowship in the College may be directed to any member of the Committee.