The Bank is Your Friend, right?

A client called me recently about his being contacted by an attorney concerning a long defunct corporation that the attorney wanted him to reinstate. Because the client knew to “let sleeping dogs lie”, he politely declined, trusting that the attorney’s client (Citibank) would find another way to solve the problem. Well, it didn’t take long….. now all the bank wants is an assignment from my friend of an old promissory note where the bank claims it had, uh “lost” some of the paperwork .   Since the assignment says in effect “whatever I have (concerning the note) you can have” — basically a quitclaim, there is no problem with signing the assignment because he never owned the note, either directly or indirectly.

More amusing, however, is the line of reasoning used by the attorney. He says that “since you are the sole director, the obligations and rights of the defunct corporation inure to you”. Nonsense. Directors are appointed/elected by the stockholder(s).  And this lawyer has NO idea who owned the stock of the (defunct) corporation.   What the attorney did know, however, was that he needed an excuse to bill his client for kinda maybe solving the problem.

It was cute tho’, the way the attorney hid the quitclaim aspect in the assignment. It didn’t mislead my friend, who spotted it right away, but Citi will never see it. Shucks, it says “Assignment” at the top of the page, so the clerk at the bank who gets it will think that’s what it must be, right?

The assignment of course had all the standard up-the-bill multiple comma’d big sentences — and buried in the middle, says “hereby assigns…….. his interest……”. That one three letter word “his” takes ALL the juice out of it. You or I could have signed it and it would have the same value (none).

The only thing I can’t figure out is whether the attorney even knows what he did. We’ll never know, most likely.  Maybe I will copy the form and label it at the bottom “Standard Citibank Assignment Form”. Might come in handy some day….