The parties’ intent for the transaction to have retroactive effect must be clear.
The facts are a bit complicated, involving circumstances surrounding the failure of a bank and transactions in the bank’s loans preceding the failure as well as transactions of the FDIC as the bank’s receiver.
Here’s a simplified timeline: FH Partners made a demand on the debtor for payment of the loan and eventually sued the debtor and guarantors.
And misleading regulatory bodies is the main issue that got folks in trouble in the stock options backdating scandal, as I recall.
Still, in the rough and tumble of everyday business, it’s often hard to nail down the exact date of a contract, and, inevitably, proper documentation will fall through the cracks on occasion.
However, where a contract is ambiguous with respect to its effective date, the absence of an explanation for a retroactive effective date, and evidence that the parties had not agreed to the material terms of their contract as of the purported retroactive effective date, are relevant considerations in resolving the ambiguity.
We cannot conclude, therefore, that in resolving the inconsistency between the FDIC/Weatherford Agreement and the Termination of Participation Agreements, the trial court erroneously relied on these uncontested facts to find “a lack of mutual assent” with respect to a November 7, 2008 effective date.
This keeps everything clean with no chance to mislead. Its good to have the voice of experience in the discussion.
The date of a contract can have revenue-recognition implications, as well as tax implications.
FH Partners argued on appeal that, although the FDIC didn’t own the loan on December 16, 2008, the FDIC’s backdated transaction with Weatherford remedied the problem retroactively.
The appellate court determined two separate issues: (1) whether the FDIC’s June 10, 2009 transaction with Weatherford was effective to retroactively transfer the loan to the FDIC as between the FDIC and Weatherford and (2) whether a retroactive effect applied to the FDIC’s earlier transaction with FH Partners.
Current President of a Board signed as President when they were not?