Giving the lending community some peace of mind in otherwise trying times, the U.S. District Court for the District of New Jersey has ruled that neither the New Jersey legislature nor the New Jersey state courts have recognized an independent cause of action known as “deepening insolvency.”
On March 26, in Stanziale v. Sun National Bank, et al . ( In re Dwek, et al .), Civ. No. 3:09-cv-5046, the U.S. District Court granted Sun National Bank’s appeal from an earlier decision by the U.S. Bankruptcy Court for the District of New Jersey denying Sun’s motion to dismiss a deepening insolvency claim. The claim was filed against Sun by Charles A. Stanziale Jr., the trustee appointed in the Chapter 11 bankruptcy cases of Solomon Dwek, a real estate investor, and his multiple businesses.
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