Defending the credit decision and the record
A borrower’s claim may center on what the bank agreed to fund, why it stopped advancing, how it handled a default, or what an officer said during a workout. The defense requires a clear account of the documents, the communications and the decisions made as the credit changed.
We examine the alleged obligation, the evidence supporting the claim, the applicable defenses and the claimed loss. That analysis informs the response to a demand, the litigation strategy and the lender’s next steps in the credit relationship.
Borrower and guarantor claims we address
- Alleged promises to fund, renew, extend or restructure a loan.
- Disputes over advance conditions, borrowing availability and funding decisions.
- Claims arising from servicing, credit administration and the exercise of contractual discretion.
- Alleged oral modifications, waiver and inconsistent treatment of defaults.
- Fraud, misrepresentation and alleged failures to disclose.
- Claims involving asserted advisory or fiduciary obligations.
- Challenges to acceleration, collateral enforcement and workout conduct.
- Guarantor defenses involving amendments, releases and changes to the underlying obligations.
The claim’s label does not resolve whether an obligation existed or was breached. We examine the asserted duty against the governing documents, the parties’ conduct and the evidence of causation and damages.
Written credit agreements and alleged oral promises
A claim that a bank promised additional funding or more time often requires close examination of Minnesota’s credit-agreement statute.
Minnesota Statutes § 513.33 establishes requirements for a debtor to maintain an action on a credit agreement, including a writing that expresses consideration, states the relevant terms and is signed by both creditor and debtor. The statute also addresses claims that financial advice, consultations or proposed accommodations created a new credit agreement.
The statute can be central to the defense, but its application depends on the claim and the record. It should not be treated as automatic immunity from every allegation concerning a lender’s conduct.
Other obligations may also matter. Minnesota Statutes § 336.1-304 imposes good-faith obligations in the performance and enforcement of contracts and duties within the Uniform Commercial Code. We evaluate the governing standards alongside the specific rights and discretion provided by the loan documents.
The loan file, communications and AI records
The signed documents are only part of the evidentiary record. Emails, call notes, credit memoranda, approval records and internal communications may help establish what the bank knew, what it communicated and why it acted.
We help lenders identify relevant records, address preservation and assess how the evidence fits the claims and defenses. AI chat histories, uploaded documents and AI-assisted drafts may also become part of that review.
Matthew’s article, Your loan officer’s AI chat history is Exhibit A, examines how routine credit-management questions can create a separate account of a lending decision. It addresses the practical relationship between bank communications, AI use and lender liability risk.
Coordinating the defense with recovery
A lender liability claim may arise while the bank is still trying to collect the debt or protect collateral. Defending the claim and deciding what to do with the credit require coordinated attention.
We assess how proposed advances, communications, accommodations and enforcement steps may affect both the defense and the recovery strategy. Where an agreement remains possible, our commercial loan workout practice addresses its terms and documentation. Where enforcement is appropriate, our commercial foreclosure and collateral enforcement practice addresses the available remedies and competing claims.
Our commercial loan documentation practice also helps lenders address obligations and expectations before a disagreement becomes litigation.
Our wire transfer and ACH fraud litigation practice addresses bank representation in disputes over fraudulent electronic funds transfers.
Discuss a lender liability matter
Contact Matthew Bialick to discuss a threatened lender liability claim, borrower lawsuit or counterclaim and arrange a conflict check. Useful background generally includes the demand or pleading, governing loan documents, relevant correspondence, credit decisions and a short timeline.
Contact Matthew
952-239-3095
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