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October 7, 1995


The opinion of the court was delivered by: MCAVOY

 Plaintiffs bring a sizeable collection of civil rights claims against defendants, all of which appear to stem from plaintiffs' contention that defendants discriminated against them on the basis of their race and national origin, and seek $ 10,000,000 in actual and punitive damages. Defendants move for summary judgment pursuant to Fed. R. Civ. Pro. 56(c) or, in the alternative, dismissal of plaintiffs' complaint pursuant to Fed. R. Civ. Pro. 12(b)(6). Defendants' motions are granted.

 I. Background

 A. Factual Allegations

 Plaintiffs' claims pertain to a series of business and legal dealings with the defendants. In short, plaintiffs claim that defendants discriminated against them in the course of negotiating a mortgage of the plaintiffs' hotel, opposing plaintiffs' Chapter 11 reorganization plan, trying to recover a debt from plaintiffs after waiving all claims to it, discussing the assumption of the mortgage with potential buyers of the hotel, assessing the hotel for property tax purposes, and transferring title to the hotel after a bankruptcy sale.

 1. The Plaintiffs and Their Businesses

 Plaintiffs are American citizens of Asian Indian descent. They are the general partners of Thruway Investments ("TI"), a limited partnership formed in 1983. Plaintiffs also formed P. & J.G. Enterprises ("PJG"), a close corporation, to operate and manage property owned by TI. The Thruway House (the "Hotel"), an Albany Hotel, was among the property owned by TI and managed by PJG. TI also owned a long-term lease on the real property where the hotel is situated.

 2. The Mortgage

 Also on July 17, 1989, Defendant AIDA made an initial loan disbursement to TI of $ 340,000. Either at that time or at some later date, Defendant AIDA allegedly told plaintiffs that it would not disburse all of the loan funds until plaintiffs completed the Hotel renovations. Plaintiffs claim that they then tried and failed to secure a bridge loan. On November 6, 1989, Defendant AIDA made a second disbursement of $ 100,000. A few months later, it made a final disbursement of $ 30,000. Plaintiffs claim that Defendant AIDA never disbursed the remaining $ 30,000. They also claim that because of Defendant AIDA's delays in disbursing the loan funds, despite plaintiffs' request for speedy payment, they failed to complete the renovations on time. Failure to complete the renovations on time allegedly led to a national hotel chain's denial of plaintiffs' franchise bid. Plaintiffs then defaulted on their mortgage payments.

 According to plaintiffs, Defendant AIDA's discriminatory conduct caused all of the delays that interfered with the smooth and timely completion of these transactions.

 3. Bankruptcy

 Plaintiffs filed for bankruptcy on October 26, 1990. They claim that although they submitted a workable Chapter 11 reorganization plan to the bankruptcy court, defendants successfully opposed it on March 28, 1992, with an affirmation containing deliberately false statements. Four months later, the bankruptcy court allegedly converted plaintiffs' bankruptcy case into a Chapter 7 case and appointed Philip Danaher as trustee of the debtors' estate.

 On August 18, 1992, the trustee put all of TI's assets, including the Hotel, up for public auction. Plaintiffs suggest that at the time of the auction, the Hotel had a fair market value of $ 4.85 million. Compl. P 43. According to plaintiffs, representatives of Defendant AIDA and two other "mortgage holders of TI's debt, Bank of Baroda and Jack Schlieffer" attended the auction and purchased the Hotel for $ 25,000 plus an amount equal to the balance of the mortgage, for a total of roughly $ 3.3 million. Plaintiffs and Defendant AIDA disagree over whether the sale was conditional upon the buyers' release the mortgage and waiver of all claims against the debtors. Compl. PP 44-45; Ds' Mem. 16. The bankruptcy judge allegedly approved the sale of the Hotel, on these conditions, to the buyers on August 24, 1992.

 Plaintiffs further allege that despite Defendant AIDA's waiver of all of its claims against plaintiffs, and in violation of the bankruptcy provisions in 11 U.S.C. § 723, Defendant AIDA brought suit against plaintiffs in New York State court to recover the debt. The state lawsuit, plaintiffs claim, was motivated by Defendant AIDA's "malice, invidious intent and bad faith to harm the plaintiff and thus to deprive them of their civil rights and privileges guaranteed under the U.S. Constitution." Compl. P 49.

 4. Assumption of the Mortgage

 Plaintiffs allege that on at least two occasions after they filed for bankruptcy and before the sale of the Hotel at public auction, defendants interfered with sales contracts plaintiffs executed with parties who had agreed to buy the Hotel and to assume the Hotel mortgage. On one occasion, plaintiffs claim, they executed a sale contract with the Friendship Hotel of Albany and received the bankruptcy court's approval for the sale. Plaintiffs allege that during meetings between Friendship and AIDA officers in 1991 and 1992, which plaintiffs were forbidden to attend, Defendant AIDA revealed information to the buyers that led eventually to their refusal to complete the sale. The disclosure of this information was, according to plaintiffs, "unconscionable, unreasonable, and discriminatory." Compl. P 87.

 5. Assessments

 Plaintiffs allege that prior to the bankruptcy filing, they made several requests to Defendant City of Albany (the "City") to reduce the property assessment of the Hotel. The City refused. During the bankruptcy hearings, one of the defendants allegedly testified that the Hotel was worth significantly less than $ 5 million. Plaintiffs claim that after the bankruptcy filing, they again asked the City for a reduction, but the City refused, in apparent deference to its assessor's claim that the Hotel was worth $ 5 million. Nevertheless, plaintiffs allege, one year after the sale of the Hotel to the secured creditors, one of Defendant AIDA's white representatives applied to the same City assessor for a reduction of the assessment and promptly secured a thirty-three per cent reduction. Compl. P 17. Plaintiffs claim that in the course of these assessment activities, the defendants' discriminated against plaintiffs, causing them losses of $ 5 million. Compl. P 18.

 6. Title Transfer

 On November 30, 1992, the secured creditors who had purchased the Hotel at the bankruptcy auction allegedly transferred title, via the bankruptcy trustee, to Beige Plane Ltd. Plaintiffs contend that this transfer released their liability as guarantors of the mortgage debt because it materially altered their rights under the mortgage agreement. They also contend that Beige Plane is a dummy corporation created by Defendant AIDA and the other two secured creditors "for the sole purpose of concealing the fact" that the purchasing group consisted of these parties. Compl. P 62. Plaintiffs claim that the creation of Beige Plane, Ltd. and the transference of title to that company was fraudulent, deceitful, and "motivated by invidious intent to harm the plaintiff and to deprive them of their civil rights, property rights guaranteed under the U.S. Constitution and laws of the U.S. Government." Compl. P 66.

 B. Legal Rules and Standards

 1. Rule 12(b)(6) Motions to Dismiss Pro Se Litigants' ...

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