Bank Of America Litigation Update

Borden Ladner Gervais LLP (BLG) is proud to share news of some of its recent litigation successes on Bank of America's behalf.

In March 2011, BLG's Montréal office successfully defended an appeal from the dismissal of a $5,000,000 claim against Bank of America.

The claim sought damages resulting from the alleged transmission of a collective agreement pursuant to the purchase of a hotel in bankruptcy from the trustee in bankruptcy. Bank of America was the first secured lender.

Under Québec law at the time of the transaction, a collective agreement did not transfer to the purchaser of an enterprise sold in the course of a bankruptcy. However, the affected union contested the transaction and the labour courts ruled that the sale by the trustee to the plaintiff was a "simulation" (meaning that it was artificial) and that despite appearances, the real seller was the secured lender (Bank of America) and not the trustee in bankruptcy. Therefore, the plaintiff could