Michael Krauss is a former Assistant United States Attorney (Civil Division, S.D.N.Y.) who now leads Faegre Baker Daniels' finance litigation group. The firm's team of trial lawyers litigates complex financial disputes nationwide. The team works alongside finance, restructuring and bankruptcy colleagues to represent the leading participants in the financial services industry.
Michael enforces commercial loan and lease remedies and defends against claims of lender liability. His experience spans credit facilities of all kinds, including syndications and participations, and ranges from commercial real estate financing to equipment leasing to asset-based lending.
- At trial, won the dismissal of a $39 million claim under the anti-tying provisions of the Bank Holding Company Act
- A $19 million settlement of a claim for default on a condominium development loan participation, despite the borrower's claims of fraudulent inducement
- Multiple judgments and settlements for an equipment lease financing company, including the dismissal of lender liability counterclaims
- Multiple judgments against debtors affirmed by the Minnesota Court of Appeals
- Multiple actions defending lead lenders against participants' claims of breach of representations and warranties, faulty servicing and loan administration, fraud, and breach of fiduciary duty
Corporate Trust and Structured Products
Michael represents trustees and holders in disputes involving indentures and asset-backed securitizations, including MBS repurchase actions. He has extensive experience litigating the duties of indenture and securitization trustees and other parties before and after default, and pursuing claims against issuers for breach, fraudulent transfer and related misconduct.
- After trial in the Delaware Court of Chancery, obtained a $155 million settlement of a fraudulent transfer and breach of indenture claim against the issuer on behalf of U.S. Bank as indenture trustee
- Regularly represent U.S. Bank and Wells Fargo in RMBS repurchase litigation in their capacities as trustee, custodian, master servicer and/or securities administrator
- Represent Wells Fargo in numerous trust instruction petitions seeking to appoint a separate trustee to pursue mortgage loan repurchase claims
- Represent Wells Fargo as trustee in a New York state court proceeding seeking approval of a global $4.5 billion settlement of RMBS repurchase claims against JPMorgan Chase
Insolvency and Receiverships
Insolvency invariably brings litigation involving trustees, receivers, creditors and counterparties of the defunct company, particularly when the insiders committed fraud. Michael represents receivers pursuing claims for fraudulent transfer, breach of fiduciary duty, illegal distributions and related misconduct. And he routinely defends similar claims against creditors and other counterparties of the debtor.
- A $42 million settlement on behalf of the receiver of an insolvent subprime construction finance company, on claims of fraudulent transfer and breach of fiduciary duty
- Obtained the maximum available settlement for a lender against an investment advisory firm whose employee raided pension accounts
- Defended breach of fiduciary duty claims in the Delaware Court of Chancery arising out of Refco's criminal collapse and bankruptcy
- Defended a loan originator in a federal multi-district litigation against numerous claims arising out of Le-Nature's criminal collapse and bankruptcy
Financial transactions involving tribal gaming operations raise unique issues of sovereign immunity, tribal jurisdiction and complex federal regulation. Michael has recovered judgments and settlements for tribes and lenders nationwide in disputes raising issues of first impression.
- Multimillion-dollar arbitration awards for Wells Fargo against a tribe in Oklahoma; judgment affirmed by the Oklahoma Court of Civil Appeals
- A multimillion-dollar settlement for a casino developer in North Dakota, following arbitration and concurrent tribal court proceedings
- A decision by the Washington Supreme Court holding that a tribe had waived its sovereign immunity and could be sued in state court for breach of a loan agreement
- A multi-million dollar settlement for a lender against a tribe in Washington, following concurrent proceedings in federal and state courts
- A preliminary injunction against a tribal gaming commission, barring it from taking any action that would adversely affect the lender's contract rights
- A $15 million judgment in favor of the lenders on a casino development loan
Michael represents creditors in bankruptcy court in New York, Delaware and Minnesota. Most recently, after a three-day trial in 2014, Michael won an order ousting management for fraud and appointing a chapter 11 trustee in Delaware within weeks of the petition date.
Michael was a litigator in New York before joining Faegre Baker Daniels. He was an Assistant U.S. Attorney in the Southern District of New York, a litigation associate at Gibson Dunn & Crutcher and Shearman & Sterling, and an adjunct professor at Cardozo Law School. Michael also clerked for the Hon. Eric L. Clay of the United States Court of Appeals for the Sixth Circuit.
- Asylum/Refugee Assistance
- Minnesota Super Lawyers — Rising Star, Business Litigation, 2008-09 and 2012
- Ronald McDonald House Charities Twin Cities — Board of Directors
- For Whom the Whistle Blows: The Role of Private Enforcement in Dodd-Frank's Public Regulatory Framework
University of St. Thomas Journal of Law and Public Policy Spring 2014 Symposium
- Trustees' Potential MBS Liability
Client Presentation, 2014
- Business Torts: Common Law Fraudulent Misrepresentation
Minnesota CLE, 2008-09 and 2013
- Trust Instruction Petitions: Judicial Guidance for Trustees
Client Presentation, 2012
- An Honest Discussion About How to Handle Liars
Minnesota CLE, 2011
- Financial Reform: Dodd-Frank Wall Street Reform and Consumer Protection Act
Minnesota CLE, 2010
- Remedies, Damages and Liability: Advising Clients on Either Side in a Breach of Contract
Minnesota CLE, 2007-09
- Dodd-Frank Offers Whistleblowing Incentives
City A.M., 2010
- A CDO Goes Moo: Three Email Guidelines Goldman Players Should Have Followed
Faegre Baker Daniels, 2010
- Navigating Troubled Waters: Fiduciary Duties of Directors and Officers of Distressed Companies
Buying and Selling Distressed Businesses: Leading Lawyers on Evaluating Assets and Identifying Buyers, Negotiating Deals, and Advising Directors and Officers on Fiduciary Duties, Aspatore, 2009
- Digging Deeper: Damages When an Insolvent Corporation Plunges Further Into Debt
Pratt's Journal of Bankruptcy Law, 2008
- Houses Divided: Does TILA Prohibit Classwide Rescission Claims by Subprime Borrowers?
Real Estate Finance, 2007
- Taming the Data Dragon: Protecting Your Company From Liability Due to Data Security Breaches
Privacy & Data Security Law Journal, 2007
- From Martha to Michael: Lessons in Litigation From Recent High-Profile Trials
- Fundamental Fairness in Child Sexual Abuse Civil Litigation
Stanford Law & Policy Review, 1997