A Bank's Ability to Set Off Customer Debt From Money Held in Trust

, New York Law Journal

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Scott I. Davidson of King & Spalding, discusses how banks should be aware that as a setoff can only be accomplished if there are mutual obligations, if the funds in the customer's account are trust funds­—and, thus, not the property of the customer but of a third party—a setoff could be found to be improper and amount to conversion of the third party's funds.

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