Borden Ladner Gervais LLP (BLG) is proud to share news of some of its recent litigation successes on Bank of America's behalf.

In March 2011, BLG's Montréal office successfully defended an appeal from the dismissal of a $5,000,000 claim against Bank of America.

The claim sought damages resulting from the alleged transmission of a collective agreement pursuant to the purchase of a hotel in bankruptcy from the trustee in bankruptcy. Bank of America was the first secured lender.

Under Québec law at the time of the transaction, a collective agreement did not transfer to the purchaser of an enterprise sold in the course of a bankruptcy. However, the affected union contested the transaction and the labour courts ruled that the sale by the trustee to the plaintiff was a "simulation" (meaning that it was artificial) and that despite appearances, the real seller was the secured lender (Bank of America) and not the trustee in bankruptcy. Therefore, the plaintiff could not evade the transfer of obligations under the collective agreement.

When the plaintiff turned around and commenced an action against Bank of America to recover its losses, BLG obtained a dismissal of the action on grounds which included that the plaintiff's president was the mastermind behind the transaction, and the transfer of the collective agreement was a business risk that he knowingly undertook. That decision was confirmed on appeal.

In February 2011, BLG's Toronto office negotiated

a settlement of two actions commenced against debtors of Bank of America for cash consideration and the debtors' interests in two mining companies. The settlement was achieved following a compressed period of investigation and litigation after BLG's retainer the previous year. During that timeframe:

  • BLG commenced a collection action against the debtors as well as a secondary action to reverse the transfer of an interest in certain of the debtors' property;
  • BLG obtained summary judgment in the collection action. In order to do so, BLG had to successfully convince the court that Michigan State's six-year limitation period applied to the action, rather than the expired Ontario limitation period;
  • BLG successfully defended the debtors' appeal, which turned on an interpretation of Ontario's Limitations Act, 2002, and common law conflict of laws principles; and
  • Armed with the Ontario Court of Appeal's judgment, BLG negotiated a global settlement which obtained for Bank of America the bulk of the debtors' assets.

With one of Canada's largest litigation teams, BLG is well placed to continue providing Bank of America with successful litigation strategies from its offices in each of Canada's five major business centers. Among major Canadian firms, BLG has unparalleled depth of expertise in banking litigation, including class actions.

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