Content area
Abstract
The 9th Circuit's decision in Chemical Bank v. Security Pacific National Bank (1994) has led to the presumption that an agent bank can be a fiduciary. The duties owed by an agent bank to co-lenders turns on the characterization of the participation by the co-lenders in the loan. If the participation is viewed as a joint venture, the lender will have fiduciary obligations to the participant. If the participation is interpreted as a loan, then the relationship between the participant is a debtor/creditor relationship, which does not give rise to any fiduciary responsibilities on the part of the lender. The test for determining whether to impose a fiduciary obligation is whether the participation agreement contains an unequivocal contractual language expressing an intention to create a fiduciary obligation.