Florida Fiduciary Forum – Ethical Considerations for Fiduciaries (June 2011)
ABI, Southeast Bankruptcy Workshop, Bankruptcy Litigation: A Practice Skills Guide (Litigating the Appointment of a Receiver in a Non-Bankruptcy Court Forum) (2012)
Throughout the last few months, there has been increasing evidence of Cuba’s involvement in the Western Hemisphere. Cuba’s core contribution? It’s people.
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Maria D. Garcia, an attorney, is the president of the Cuban American Bar Association. Hugo Acha is a is a human rights attorney and the lead research advisor for the Foundation for Human Rights in Cuba.
By Javier A. Lopez and Stephanie M. Gomez
July, August 17
The fully executed contract is ready for signatures. All too often, however, the end is not near. Instead, the game of chess begins.
With the commercial and real estate markets in flux, more real estate litigation is happening because buyers and sellers are trying to back out of closings. To help prevent an escape hatch, prepare beforehand and draft the most airtight contract possible.
Real estate investors and professionals must have safety valves placed into a sale and purchase contract, first gently and then more rigorously, to remind the buyer about the pain of backing out. Various options are available on how to dissuade a reluctant buyer from not signing a contract.
Before beginning to write a contract, prevention involves several steps. While it may sound obvious, including the closing date is crucial.
Also, a seller should specify the length of allowed extensions, limit the number of extensions, and decide on the ramifications for each extension. For example, an extension may call for a nonrefundable deposit.
If a buyer walks, he loses the property. Another option is to specify additional escrow money for each requested extension.
The agreement should specify that the deposit is held in escrow, which will be provided to a seller if a buyer walks away. Prior to closing, sellers should try to have as much money as possible on their side of the table – a significant enough amount to place a buyer in a tough spot.
Free and Clear Titles
Property must be able to be transferred with a clear title. A seller, however, may be aware of certain issues with the title and may require the buyer to assume them. In this instance, sellers must be very clear about these issues in the contract.
In a recent litigation, the buyer tried to back out of a $38 million closing allegedly due to an open litter violation against a commercial tenant. The litter consisted of a piece of plywood lying against the property’s side wall, which merely needed to be tossed in the garbage. In reality, the buyer’s concern was that the property value had dropped to $33 million.
To identify red flags from a buyer, a broker and seller must pay attention to changes in a buyer’s behavior. For example, a buyer may start communicating less frequently or continually request extensions of the closing date.
If a seller notices these changes, he should discuss them with the buyer. He also should create a comprehensive paper trail showing his adherence to the contract and write every communication as if it is going to be used as an exhibit for litigation.
If a buyer fails to remit the balance of the purchase price to the escrow agent and fails to close in a timely manner, the seller should immediately send a letter showing the default and exercising his right to terminate the agreement and retain the deposit. Should this result in litigation, the seller will be well-equipped to successfully defeat a buyer’s claims.
Reaching the Finish Line
Thinking moves ahead is important in a chess game and in closing a deal. Unforeseen circumstances, however, are a part of the process. Commercial real estate professionals should always review the draft contracts, while keeping potential litigation in mind. For any questions, they should ask the real estate attorney.
Typically, the contract will be the most scrutinized document in this type of litigation. Having safety valves in place, a clean and easily understood contract, and mechanisms to make the other side think twice before backing out will help keep the closing on track. For those engaged in a transaction, it is essential to maintain communication throughout the closing process. Following these steps will prevent the necessity of wasting time and money in litigation.
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May 8, 2019
Law360, New York (May 6, 2019, 1:54 PM EDT) — A Manhattan federal judge tasked counsel for a formerly private Cuba bank Monday with explaining why, under new Trump administration policy, it should get a $456 million chunk of $717 million that Societe Generale agreed to pay the U.S. government for violating Cuba sanctions.
At a quick hearing, U.S. District Judge Andrew L. Carter Jr. gave counsel for Banco Nunez, whose assets were taken by the Cuban government in 1960, until the end of May to detail its reasons for the potentially large claim.
“We don’t think that there’s a valid claim here,” counsel for the U.S., Alexander Wilson of the Manhattan U.S. attorney’s office, told Judge Carter, without getting into specifics.
The judge set a briefing schedule to last through May 31.
In a Friday letter, the bank said a recent shift by President Donald Trump to allow for lawsuits against corporations trafficking in wrongfully confiscated Cuban property allows for it to make a claim against the SocGen dollars.
Banco Nunez said in the letter that the figure of $456 million is derived from the original value of the bank’s property in Cuba — roughly $4.9 million as of 1960 — compounded by decades of interest and then tripled, per U.S. anti-trafficking law.
The money forked over by the French megabank last year is susceptible to such a claim because, in agreeing to the settlement, SocGen admitted to “trafficking” in confiscated Cuba property, the letter said.
Banco Nunez’s Florida-based counsel Javier A. Lopez of Kozyak Tropin & Throckmorton, who appeared via telephone Monday before Judge Carter, said in an email he would detail his claims in coming court filings.
Trump’s recent move to open the door to such lawsuits, by partially implementing a long-mothballed provision of the 1996 Helms-Burton Act, has led to predictions that many claimants like Banco Nunez could come into court with similar claims.
Banco Nunez is represented by Javier A. Lopez of Kozyak Tropin & Throckmorton.
The government is represented by Alexander Wilson and Benet Kearney of the U.S. Attorney’s Office for the Southern District of New York.
The case is U.S. v. $717,200,000 in U.S. Currency, case number 1:18-cv-10783, in the U.S. District Court for the Southern District of New York.
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HOW JAVIER GOT HELP
So, at the risk of being embarrassed or showing weakness, I will start. In 2012 my best friend and hero, my father, passed away after a horrific fight with cancer. I was lost after he passed—angry, depressed, confused. I was in a very, very dark place. My mentor, partner, and dear friend Harley Tropin came into my office one day and told me it was okay, he was there, he understood, and he gave me a phone number of a therapist he knew. That phone number changed many things for me. The therapy was not easy, it was not short, and I doubt someone ever truly heals from such a loss, but without the professional help I received, I do not know how that chapter would have ended. Reaching out for help is not a sign of weakness, it is a sign of strength. I am now back in therapy as trying to deal with the loss of my 44 day old nephew a couple of months ago to a rare genetic disease. As spouses, friends, family members, lawyers, and partners, we need to do a better job of listening. Listen to your colleagues; the most important truth may be said in jest. We are blessed to be able to practice law, it is a beautiful profession. With this blessing, I believe we have the responsibility to be there for each other, show up, be present. Just showing up can save a life.
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Javier Lopez has spent hundreds of hours interviewing Cuban exiles and meticulously building cases for families who lost property after the 1959 revolution. He’s pored over obscure legal papers, Spanish-language newspaper articles and, in one case, a century-old parchment deed. Then, he stashed the suits in his computer: No court would hear them, and he couldn’t bill a cent.
On Thursday, the cases can come out again.
For the first time, the Trump administration will allow lawsuits in U.S. courts against firms operating on seized Cuban property, including multinational corporations based in Canada and Europe, which accounts for the island’s biggest source of foreign investment. In many cases, the companies entered the market decades after the land was expropriated, but they could be held accountable all the same.
Some Cuba watchers are projecting a flurry of legal activity, while foreign governments and corporations are preparing to defend billions in assets. The European Union and Canadian governments have jointly warned that suits could prompt them to complain to the World Trade Organisation. Among potential lawsuit targets are Swiss food company Nestle SA; Canadian miner Sherritt International Corp.; and Spanish hoteliers NH Hotel Group SA and Melia Hotels International SA, according to a list from the U.S.-Cuba Trade and Economic Council.
Lopez, 39, has been waiting for this day for the better part of the past decade.
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Kozyak Tropin & Throckmorton is a complex commercial litigation firm founded in 1982 that focuses its practice on bet-the-company commercial cases, class actions, healthcare and bankruptcy matters.