Avocet Development Corp. v. McLean Bank

In 1977, Andrew J. Serafín, president and sole stockholder of Avocet Development Corporation (Avocet), and a practicing attorney in Washington, D.C., first borrowed money for Avocet from The McLean Bank (the bank). Because the bank considered Avocet a “corporate shell” with limited assets, the bank and Serafín agreed that Serafín and his wife would personally endorse all of Avocet’s notes, and Serafín would pledge savings accounts he and Avocet had in the bank to secure the payment of the notes. Until the spring of 1981, Avocet renewed the notes every 90 days. In each instance, the bank…