The recent case of TrustCo Bank v. Mathews sends a warning to bank lenders concerning the expiration of the statute of limitations and the doctrine of laches. TrustCo Bank was on notice that a guarantor in a loan was transferring assets out of her name, but did not file suit until much later. Mathews had started transferring her assets since 2007, the bank received substantial information regarding this in 2008, and still did not file suit until 2013. The Court Of Chancery Of The State Of Delaware declared that the statute of limitations had expired and TrustCo Bank was effectively barred by laches in pursuing the case. The need for bank counsel to be diligent in seeing if guarantors of loans have made transfers and the need to investigate immediately are highlighted in this case.

See Jay Adkisson, “Lenders Beware! Notice Of The Borrower’s Trust Planning Can Start A Statute of Limitations Running,” Forbes (Jan. 28, 2015). See also TrustCo Bank v. Mathews, 2015 WL 295373 (Del. Ch. Jan. 22, 2015).

Posted by Aryane Garansi, Associate Editor, Wealth Strategies Journal