Nice case on Implied Actual Authority and Ratification

This is a class action against debt collectors for violation of the Telephone Consumer Protection Act.  The lender hired a loan servicing company.  It hired debt collectors.  The lender said “We didn’t make any improper calls!  Our agents did.”  Very nice summary of agency law.

“Henderson advances two agency principles that she believes makes USA Funds liable for the debt collectors’ TCPA violations—ratification and implied actual authority.”

My summary of the case.

Henderson v. United Student Aid Funds, Inc., 918 F.3d 1068 (9th Cir. March 2019)

Issue:   Did the court err in granting summary judgment here on the issue of whether the lender here was liable for the conduct of its agents?

Holding:   Yes.  “[A] reasonable jury could find that USA Funds ratified the debt collectors’ calling practices by remaining silent and continuing to accept the benefits of the collectors’ tortious conduct despite knowing what the collectors were doing or, at the very least, knowing of facts that would have led a reasonable person to investigate further.”

Appeal from district court, Southern District California Continue reading

Selling securities to your employees

We looked at the Ralston Purina case last semester (and every fall semester for the past 16 years) where the SEC slapped Ralston Purina around for selling unregistered securities to its own employees.  Here is a nice summary of how to accomplish that goal and keep the SEC happy.

https://www.lexology.com/library/detail.aspx?g=cb1ccb8e-62cf-495c-883a-18ad40cebcd4&utm_source=lexology+daily+newsfeed&utm_medium=html+email+-+body+-+general+section&utm_campaign=calbar+business+section+subscriber+daily+feed&utm_content=lexology+daily+newsfeed+2019-03-06&utm_term=

Can a corp file a chapter 7 bankruptcy petition without approval of the shareholders?

This is an update to the prior post.  My bankruptcy colleague posted:

Dear Colleagues,

A corporation filed for Chapter 7 protection.  However, the 80% shareholder, who is neither an officer, nor a director, did not sign anything authorizing the filing.  Can the case be dismissed based on the failure of the Board to have the 80% shareholder sign the corporate resolution authorizing the filing?

I suspect that the answer to my question is, “Look at the articles of incorporation and the by-laws,” but I thought I’d see if there is a general principle I can use here.

All the best, Nick

Someone asked him for more details and he responded: Continue reading

Question from a bankruptcy list serve

See how much you have learned?  Each of you can answer this question I’m sure.  The question was posted by a very knowledgeable and good bankruptcy lawyer.

Dear Colleagues,

A corporation filed for Chapter 7 protection.  However, the 80% shareholder, who is neither an officer, nor a director, did not sign anything authorizing the filing.  Can the case be dismissed based on the failure of the Board to have the 80% shareholder sign the corporate resolution authorizing the filing?

I suspect that the answer to my question is, “Look at the articles of incorporation and the by-laws,” but I thought I’d see if there is a general principle I can use here.

All the best,

Nick