Madden case update

[investny]

"The decision by the Supreme Court not to review the Second Circuit's holding in Madden means we're probably just seeing the very beginning of lawsuits against marketplace lenders, such as LendingClub. Not only are marketplace lenders at risk, but so will be the sponsors and other participants in the securitization of marketplace loans to the extent loans are held unenforceable or interest rates are reduced. Experience shows that when cash flows to investors are reduced, litigation follows."

http://www.altfi.com/article/2069_supreme_court_rejects_midland_appeal_in_major_blow_to_marketplace_lenders" class="bbc_link" target="_blank">http://www.altfi.com/article/2069_supreme_court_rejects_midland_appeal_in_major_blow_to_marketplace_lenders

[Fred93]

And what are the qualifications of the author to make these legal judgements?

[Ran]

Here was a more balanced view and response from LP http://www.crowdfundinsider.com/2016/02/82246-lending-club-reacts-to-concerns-over-madden-vs-midland-decision/" class="bbc_link" target="_blank">http://www.crowdfundinsider.com/2016/02/82246-lending-club-reacts-to-concerns-over-madden-vs-midland-decision/

[HalfABubbleOff]

It is not a surprise that cert wasn't granted.  The U.S. Solicitor General both blasted the 2nd Circuit Court of Appeals ruling, but also said that the district court has not yet ruled if Delaware laws apply in this case or not. 

So, it was "too early" for this case to make its way to be heard by the USSC.  The possible twists and turns in this case means it's going to be around for at least a few years.