A businessman in Florida has been awarded $6 million by a jury after a finding against U.S. Bank. The jury found that the businessman was forced to file bankruptcy when the bank acted in bad faith. The verdict included $5 million in punitive damages, the largest amount awarded in the history of bankruptcy cases.
Both the debtor and the bank are accusing each other of attacking and refusing to settle the dispute. The debtor accuses the bank of collection tactics that are akin to illegal loan shark activity, and the bank claims that it will appeal the decision based on its belief that the verdict was unfair. The bank has had only one other business in its equipment finance group file bankruptcy since 2006.
The debtor’s company owed money on the lease of equipment that was financed by the bank. The debtor still owes the bank more than $4.9 million in Pennsylvania, based on a personal guaranty. While the bank is willing to fight the matter out in court, lawyers for both sides acknowledge that a jury trial is almost unheard of in a bankruptcy matter.
While most debtors will not face multimillion dollar jury litigation, they may still need help in filing a bankruptcy and pursuing protection from creditors through the bankruptcy court. Bankruptcy lawyers may be able to provide this guidance and explain the choices available to debtors, depending on their financial situations. There are several different types of bankruptcy filings available, and choosing the right one is critical for debtors who seek to successfully resolve debts and keep important assets.
Source: Star Tribune Business, “Florida bankruptcy dispute ensnares U.S. Bank,” Jennifer Bjorhus, March 24, 2013