Litigation Attorneys Brad Kletscher and Tammy Schemmel Obtain Winning Verdicts

October 20, 2010  |  Barna, Guzy & Steffen, Ltd.

On March 23, 2010, the Minnesota Court of Appeals handed down a landmark decision in the area of receivership law in Minnesota. Barna, Guzy & Steffen Ltd. attorneys Brad Kletscher and Tammy Schemmel represented the winning party State Bank of Delano in the appeal. In the decision, the Minnesota Court of Appeals held that a receiver for real estate does not have to pay the past due bills of a debtor owed to a utility company and that a utility company cannot disconnect utility services if a receiver does not pay such past due bills. In the case of State Bank of Delano v. Centerpoint Energy Resources, 779 N.W.2d 582 (Minn.App. 2010) the court held that “Because Minn.Stat. 576.01, subd. 2, requires a receiver to pay only for normal maintenance expenses of a property and because the Minnesota rules do not permit [the utility] to disconnect utility service to a new customer when the previous customer failed to pay its account balance, [the receiver] is not required to pay [the debtor’s] utility debt.” What this means for banks is that they will not have to pay the past due utility bills of their debtors out of the rents for the real estate if they appoint a receiver for real estate. This provides more funds to satisfy the debt owed to the Bank and limits the cash outlay a bank may have to provide to preserve the real estate securing their loan.
And in a separate case:
On January 13, 2010, the United States District Court for the District of Minnesota granted summary judgment dismissing the Securities & Exchange Commission’s claims for civil fraud against an Irish controller of a subsidiary of a United States publicly held company. Barna, Guzy & Steffen Ltd. attorneys Brad Kletscher and Tammy Schemmel represented the successful Irish conroller against the SEC. In Securties & Exchange Commission v. Clem Hannon, 2010 U.S. Dist. LEXIS 2403 (D.Minn.January 13, 2010) the United States District Court held “when considered singlyor in combination, the SEC’s evidence with respect to scienter does not establish a genuine issue of material facts as to whether Defendants acted with intent to deceive, manipulate or defraud.” The Court then denied the SEC’s request for an officer and director bar. Depositions taken in Ireland proved essential in defeating the SEC’s claims.