Date: 12-02-2011

Case Style: American Bank v. T.D. Bank

Case Number: 0:09-cv-02240-ADM-TNL

Judge: Ann D. Montgomery

Court: United States District Court for the District of Minnesota (Hennepin County)

Plaintiff's Attorney: Eric Nystrom, John Ekman, William P Wassweiler, Daniel N Sacco and Anthony N Kirwin , Lindquist & Vennum, P.L.L.P., Minneapolis, Minnesota

Defendant's Attorney: Sonya R Braunschweig, Eric S Golden, Alan L Kildow, Jeffrey E Mitchell and David M Doyle , DLA Piper LLP (US), Minneapolis, Minnesota and Joe A Joseph and Howard S Marks, Burr & Forman, L.L.P., Birmingham, Alabama for T.D. Bank, N.A.

Description: American Bank sued T.D. Bank on aiding and abetting and conspiracy to commit loan fraud perpetrated by disgraced Olando businessman and boy-band promoter Louis J. Peralman. American Bank and 25 other banks made a $28.5 million loan to Pearlman in March 2006.

American Bank sought damages for aiding and abetting and civil conspiracy arising out of TD Bank's participation in the $28.5 million loan that it knew to be fraudulent. American Bank alleged that TD Bank's participation in the fraudulent loan allowed the loan to close, thereby assisting Pearlman in committing fraud.

From 2001 to 2005, TD Bank loaned Pearlman more than $16 million. In August 2005, as a result of an international investigation, TD Bank learned that the accountants that provided audited financials for Pearlman's airline, Trans Continental Airlines (TCA), and that prepared Pearlman's tax returns, did not exist. The investigation further revealed that TCA did not own any airplanes and was not licensed by the Federal Aviation Administration.

Upon discovering Pearlman's fraud, TD Bank entered into a forbearance agreement with Pearlman to give him time to refinance his loans with other lenders and then provided the last financing to allow the loan to close. The loan made by American Bank and the other participants was based on the same financial information that TD Bank knew to be false. TD Bank's conduct increased losses to federally-insured banks from $11 million to more than $27 million.

Louis Pearlman is currently serving a 25-year federal prison sentence for his role in a $300 million Ponzi and bank fraud scheme. Before being arrested for his fraud, Pearlman was best known as the founder and promoter of the successful 1990s boy bands, including The Backstreet Boys and *NSYNC.

The defenses asserted by T.D. Bank are not available.


Read more: http://www.sacbee.com/2011/12/02/4096062/lindquist-vennum-wins-significant.html#ixzz1fTb6fkBb

Outcome: Plaintiff's verdict for $28.5 million.

Plaintiff's Experts:

Defendant's Experts:

Comments: