Murphy v. Meritor Savings Bank (In Re O'Day Corp.)

How courts have described this case

Verbatim parenthetical descriptions written by other courts when citing this decision. Ranked by citation-network relevance.

• holding that projections in the case before it, unlike those in Credit Managers, were unreasonable
• rebuffing lender’s efforts to rely on “Arthur Andersen’s failure to include a going concern qualification in its fiscal year end 1988 audit.”
• “Notwithstanding the availability of current information about the company’s financial performance, neither Funston nor Meritor took steps to revise the reduced sales scenario projections, which implicitly assumed a gross profit margin of 21.84 percent.”
• no value in obtaining loan, since borrower incurs repayment obligation along with proceeds
• “In the face of such unequivocal financial information, Jones and Funston projected that, in a worst case scenario, O’Day would somehow match or exceed its best financial performance of the 1980’s.”
• unreasonably small capitalization encompasses financial difficulties which are short of equitable insolvency or bankruptcy insolvency but are likely to lead to some type of insolvency eventually

Source: CourtListener parenthetical corpus (CC0).