88. Alco's payment of the $ 1,000,000.00 under the Guaranty did not provide Alco with any claim against Natwest. See T.T. at 36.
89. When Westinghouse paid $ 3,000,000.00 to Natwest pursuant to the Participation Agreement, Westinghouse did not acquire a direct claim against Toscany; to the contrary, Westinghouse only obtained a derivative claim through Natwest, which only Natwest has the right to pursue. See T.T. at 88, 147.
90. On November 1, 1991, Toscany filed for bankruptcy under Chapter 11 of the Bankruptcy Code. See Joint Stipulation P 9.
91. In its Schedule of Creditors, (the "Schedule of Creditors"), Toscany listed Alco's claim against it for $ 1,000,000.00, representing the amount which Alco paid under the Guaranty, as an unsecured trade debt. See T.T. at 92-93. See also the Schedule of Creditors, which is attached to Toscany's voluntary petition for bankruptcy as Exhibit "B."
92. In the Schedule of Creditors, Westinghouse's Participation was listed as part of the secured debt owed by Toscany to Natwest. See T.T. at 93. This listing is consistent with the priority of repayment of Westinghouse's Participation over repayment of Alco's Guaranty. See T.T. at 93.
93. Toscany is in liquidation, winding up its affairs in advance of dissolution. See Joint Stipulation P 10.
94. On the date Toscany filed for bankruptcy, it owed $ 6,668,733.70 to Natwest under the Amended Loan Agreement; since that date, Toscany has repaid to Natwest $ 5,942,087.29 under the Amended Loan Agreement. See id. PP 31-32. Toscany has not repaid Natwest in full for the Loans which Natwest made under the Amended Loan Agreement. See id.; T.T. at 173.
95. The Guaranteed Obligations (as that term is defined in the Guaranty and Letter Amendment) have not been repaid in full. See Joint Stipulation PP 31-32.
96. As such, the condition precedent to Alco's right to be subrogated to the rights of Natwest against Toscany has not yet been satisfied. See Joint Exhibit C P 7.
97. While the Guaranteed Obligations have not been paid in full, Natwest has received from Toscany, or out of its proceeds or as proceeds of the Collateral, monies in excess of Natwest's Share of the Loans (as defined in the Participation Agreement). See T.T. at 158.
98. Natwest is obligated, pursuant to section 2 of the Participation Agreement, to use any and all funds which it receives from Toscany, or out of its proceeds or as proceeds of the Collateral, in excess of Natwest's Share of the Loans (as defined in the Participation Agreement), to repay Westinghouse for the Participation. See T.T. at 173.
99. The Interpleader Funds constitute monies which Natwest received from Toscany, or out of its proceeds or as proceeds of the Collateral, in repayment of the Loans under the Amended Loan Agreement; therefore, Natwest is obligated to use the Interpleader Funds to repay Westinghouse for the Participation. See T.T. at 173.
100. Natwest failed to pay the Interpleader Funds to Westinghouse because Alco was threatening to sue Natwest if it did so. See T.T. at 161; Amended Complaint for Interpleader P 25.
101. Acceptance of Alco's position in this case would result in Westinghouse's being without any legal means of obtaining repayment of its entire Participation. See T.T. at 148-152. For example, assuming that Toscany borrowed the entire $ 16,500,000.00 from Natwest under the Amended Loan Agreement, that Westinghouse paid $ 3,000,000.00 to Natwest pursuant to the Participation Agreement and that Alco paid $ 1,000,000.00 to Natwest pursuant to the Guaranty. The $ 1,000,000.00 paid by Alco would reduce the outstanding amount of the Loans to $ 15,500,000.00. Under this example, if Alco were entitled to be repaid for the $ 1,000,000.00 that it paid to Natwest pursuant to the Guaranty before Westinghouse was entitled to be repaid for the $ 3,000,000.00 that it paid to Natwest pursuant to the Participation Agreement, Natwest would recover $ 12,500,000.00, Alco would recover the next $ 1,000,000.00 and Westinghouse would only recover $ 2,000,000.00. Moreover, since Westinghouse has no direct contractual relationship or claim against Toscany, Westinghouse would have no means of recovering the remaining $ 1,000,000.00 that it is owed.
$ 16,500,000 (total amount of Natwest's Loans to Toscany)
-1,000,000 (Alco paid this amount pursuant to Guaranty)
15,500,000 (total sum still due and owing to Natwest for Loans)
$ 15,500,000 (total sum still due and owing to Natwest for Loans)
-12,500,000 (repayment of "Natwest's Share of the Loans" as defined in
-1,000,000 (repayment to Alco for payment made pursuant to Guaranty)
2,000,000 (amount left to repay Westinghouse for Participation)
$ 1,000,000 (Westinghouse is still owed this amount for its
Participation; however, it has no legal right to recover
this amount because Westinghouse has no contractual
relationship with Toscany.)
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