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Abstract: 

With the summer months behind us, there will be no shortage of legal issues to keep financial institutions and their counsel busy in the fall, and these issues will be covered in the Journal ’s pages. In this issue’s first article, Barry Goheen, Letitia McDonald, and Darrick McDuffie discuss the initial wave of class actions filed under the Credit Card Accountability and Disclosure Act of 2009, the Supreme Court’s recent restrictive class action jurisprudence, and the ongoing uncertainties relating to preemption of state-based usury claims against state-chartered banks. Thomas J. Hall and Eric J. Przybylko, in our second article, analyze the multiple questions involved in determining when a secured creditor’s lien against an anticipated tax refund attaches to protect the interest against unsecured creditors. In light of the decision in Official Committee of Unsecured Creditors of TOUSA, et. al. v. Citicorp North America, Inc., et al. , 1 much of this analysis is driven by the court’s holding that a secured creditor obtains rights to the refund at the end of the tax year. The various types of equity compensation for financial institutions taxed as partnerships is taken up in our third article, by Brian J. O’Connor and John A. Wilhelm. The authors detail the various issues institutions such as banks, hedge funds, and registered investment companies should consider—from both business and tax perspectives—in choosing from the menu of compensation options, which includes capital interests, carried interests, and unit appreciation rights. In our fourth article, Jeffrey A. Zaluda and Lauren J. Wolven cover foundational issues regarding what lenders should know about trusts. These issues include the authority of trustees to borrow or pledge assets in support of a loan; spendthrift clauses; red flags such as rights to modify the trust terms and substitute property; and what a lender should do to protect its interests upon the death of a borrower, beneficiary, or guarantor. We conclude with Jim Goeller’s Community Banks column. He discusses bonus compensation issues for executives, focusing on Internal Revenue Service Chief Counsel Advice 200949040.

Keywords: Credit Card Accountability and Disclosure Act of 2009; TOUSA; LLC Equity Compensation; Trusts; Taxes and Bonus Accruals

Affiliations:  1: New York Law School.