plant for potential investors (Plaintiff's Exhibit 30) and (6) kept Kiam informed as to Chase's progress (Plaintiff's Exhibits 25-26). Chase's report of January 7, 1992 indicates that by that time it had made initial contact with 141 investors, four of whom would make proposals to purchase Remington by the end of the month. Two of those four bids -- the so-called "Warburg" and "Kohlberg" proposals -- would have provided Kiam with several million dollars more than the amount necessary to pay off the RPI Lenders.
Dissatisfied with this choice of bids as well as Chase's efforts on their behalf generally, Remington and Kiam began, sometime during January or February of 1992, to solicit investors independently of Chase. According to Kiam, it had been his preference from the time the Engagement Agreement was signed that any transaction that Remington entered into be a financing arrangement (i.e., an equity or debt offering, a joint venture or the formation of a partnership) rather than an outright sale of the company or its assets. Kiam was particularly interested in maintaining control of Remington.
In July 1992, Kiam entered into a transaction (the "Perlmutter Transaction") with Isaac Perlmutter that constituted a Transaction within the meaning of the Engagement Agreement with Chase. While it is unclear from the record whether it was expected -- or Kiam believed -- at the time the Perlmutter Transaction was consummated that Kiam would remain in charge of Remington, Kiam preferred Isaac Perlmutter's proposal to any proposal received by Chase.
The record is unclear as to when precisely Chase demanded, and Remington refused to pay, its fee. Chase has submitted correspondence and memoranda which indicate strongly that as late as July 1992 Remington did not dispute that Chase was owed compensation for its services. Whatever negotiations occurred on this topic ended on October 29, 1992, however, when Chase filed this suit, alleging that Remington's failure to pay it a fee constituted a breach of the Engagement Agreement and that Kiam was liable as guarantor. Remington's and Kiam's answer denies the substance of Chase's complaint and asserts counterclaims to the effect that (1) Chase's failure to perform its obligations under the Engagement Agreement constituted a breach of contract, (2) Chase "tied" Kiam's receipt of a mortgage loan to Chase's selection as Remington's investment banker in violation of the Bank Holding Company Act ("BHCA"), 12 U.S.C. §§ 1971-78, (3) Chase negligently managed the process of attracting investors, thereby forcing Remington to pursue the Perlmutter Transaction, which they describe as disadvantageous, and incur costs they otherwise would have avoided and (4) Chase breached its fiduciary duty to Remington by pursuing its own interests and the interests of the RPI Lenders at the expense of Remington. As noted above, Chase moves for summary judgment on its claim and on each of these counterclaims.
The dispositive issue is whether Chase has fulfilled its obligations under the Engagement Agreement. Although the defendants contend that there is a genuine dispute as to the intent of the parties in drafting the Agreement, neither party argues that the terms of the Agreement are ambiguous. Chase claims that under the Engagement Agreement it performed the required services and is entitled to be paid. Remington and Kiam disagree, arguing that summary judgement is inappropriate, not only because the intent of the parties is a material fact in dispute, but because Chase failed to perform the services it was obligated to perform under the Agreement, in particular because Chase failed to adopt Kiam's preference for attracting an investor in, rather than a purchaser of, Remington. I conclude that Chase is correct.
There is little doubt as to the services Chase was obligated to provide under the Engagement Agreement. While section 1 required Chase to "assist" Remington, "identify" options, "recommend" courses of action, and "advise" Remington as to its various options regarding Transactions, that is all it required Chase to do. Whatever the defendants' intention was, the Engagement Agreement does not, and cannot reasonably be construed to, mandate Chase to seek an investor in Remington before turning to the option of a sale of Remington stock or assets. Chase was under no obligation to do Kiam's bidding as long as it could opine in good faith that its actions were fair from a financial standpoint.
Nor does section 3 condition Chase's receipt of a fee on its bringing about a Transaction or on the consummation of any particular type of Transaction. The sole prerequisite to payment listed in section 3 is the consummation of a Transaction (or the signing of an agreement that results in a Transaction). As both Kiam and his attorney, Arthur Emil, recognized on deposition, see Plaintiff's Reply Exhibit 3 at 451-52; Plaintiff's Reply Exhibit 4 at 453-54, section 3 does not even condition Chase's entitlement to a fee on its being involved in a consummated transaction.
The record clearly establishes that Chase did in fact provide the services called for in the Engagement Agreement and that all conditions precedent to Chase's being entitled to payment have occurred. As described above, Chase has submitted extensive evidence of advice and representation provided Remington by Chase directed toward the consummation of a transaction the form of which was clearly contemplated in the Engagement Agreement. Nothing in the Engagement Agreement prohibited Chase from pursuing particular types of Transactions to the exclusion of others.
Accordingly, Chase's motion for summary judgment on its claim that the defendants are in breach of the Engagement Agreement is granted. Moreover, since the guarantee is unambiguous and the sole condition precedent to its becoming operative -- that is, the liability of Remington -- has occurred, Chase's motion for summary judgment on its claim against Kiam is also granted.
It follows from the foregoing discussion of Chase's claims that Chase's motion for summary judgment dismissing the defendants' counterclaim for breach of contract must be granted. As discussed above, there is no genuine issue whether Chase performed adequately under the Engagement Agreement and the defendants have failed to call into question Chase's substantial evidence of performance.
The defendants allege that Chase made Kiam's receipt of a mortgage loan contingent on Chase's being chosen as Remington's financial advisor in violation of the anti-tying provisions of the BHCA. 12 U.S.C. § 1972 reads in pertinent part as follows:
(1) A bank shall not in any manner extend credit, lease or sell property of any kind, or furnish any service, or fix or vary the consideration for any of the foregoing, on the condition or requirement --
(A) that the customer shall obtain some additional credit, property, or service from such bank other than a loan, discount, deposit, or trust service . . .