The bank could be looking at a suit for the amount of the check, based on the South Carolina UCC's section 36-3-307 (Notice of Breach of Fiduciary Duty). If Mickey Sr. gives the funds from the check to Mickey Jr. or uses them for Junior's benefit, you should escape any liability. But if Senior denies the funds to Junior and uses them for other purposes (perhaps a down-payment on Mickey Senior's membership in one of the fine South Carolina private golf clubs), Junior could take his dad to court to collect what's due him, and drag your bank into the fray.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8