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MINA INV. HOLDINGS v. STEVEN W. LEFKOWITZ

August 6, 1998

MINA INVESTMENT HOLDINGS LTD. and PENTIUM CAPITAL HOLDINGS, LTD., Plaintiffs, against STEVEN W. LEFKOWITZ, MECO HOLDINGS, L.L.C., MILL EQUIPMENT & ENGINEERING CORP., MECO INVESTMENT CORP., SCOGGIN CAPITAL MANAGEMENT, L.P., SELIG PARTNERS, L.P. and NIPPON CREDIT TRUST CO., Defendants.

ROBERT W. SWEET, U.S.D.J.


The opinion of the court was delivered by: SWEET

OPINION

Sweet, D. J.

 Defendant Nippon Credit Trust Co. ("Nippon") has moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss claims against it for tortious interference with contractual relations, unjust enrichment, rescission, and reformation brought by Plaintiffs Mina Investment Holdings Ltd. ( "Mina") and Pentium Capital Holdings, Ltd. ("Pentium") (collectively, the "Plaintiffs"), on the ground that they have failed to state claims upon which relief can be granted. For the reasons set forth below, Nippon's motion to dismiss is granted.

 The Parties

 Plaintiffs are investment companies incorporated in the British Virgin Islands, with their principal place of business in Switzerland, where their sole director, an entity named Saturn Corporate Services Inc. ("Saturn"), is located, and where officials of Saturn directed, controlled, and coordinated all of their activities.

 Defendant Steven W. Lefkowitz ("Lefkowitz") is a resident of Kings County, N.Y. He has identified himself as chairman of the board of directors and president of Defendant MECO Holdings, L.L.C. ("MECO Holdings"), and as chairman of the board of directors of Defendant Mill Equipment & Engineering Corporation ("MECO").

 Defendant MECO Holdings is a limited liability company organized and existing under the laws of Delaware. Since April 1994, MECO Holdings has owned the majority of the stock of Defendant MECO, a Delaware corporation. The management of MECO Holdings was occasionally nominally vested in an entity named Wade Capital Corporation, a Delaware corporation wholly owned and controlled by Defendant Lefkowitz.

 Defendant MECO is a Delaware corporation, with its principal place of business in Pittsburgh, Pennsylvania. It is engaged in the manufacture of electrical and mechanical equipment for customers in the metals industry.

 Defendant MECO Investment Corp. ("MIC") is a Delaware corporation and a wholly owned subsidiary of Defendant MECO, incorporated on June 16, 1995.

 Defendant Scoggin Capital Management, L.P. is a domestic limited partnership organized and existing under the laws of Delaware.

 Defendant Selig Partners, L.P. ("Selig") is a domestic limited partnership organized and existing under the laws of Delaware. Selig was both an equity investor in MECO Holdings, as well as a party which loaned money to MECO Holdings for the acquisition of MECO.

 Defendant Nippon is a bank and trust company existing under the laws of New York.

 Prior Proceedings

 Plaintiffs filed their original complaint on February 25, 1997, and their first amended complaint (the "Amended Complaint") on January 12, 1998, in which Plaintiffs added Selig and Nippon as defendants. The Amended Complaint contains a total of three counts, of which only Counts II and III are directed against Nippon. Count I alleges breach of contract against MECO Holdings, and demands specific performance. Count II alleges tortious interference with contractual relations against all Defendants except MECO Holdings, and Count III alleges unjust enrichment, rescission, and reformation of contracts against all Defendants.

 Nippon filed the instant motion on March 30, 1998. Oral arguments were heard on May 27, 1998, at which time the motion was deemed fully submitted.

 Facts

 On a motion to dismiss under Rule 12(b)(6), Fed. R. Civ. P., the facts of the complaint are presumed to be true, and all factual inferences are drawn in the plaintiff's favor. Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989). Accordingly, the factual allegations considered here and set forth below are taken from the Amended Complaint and do not constitute findings of fact by the Court. They are presumed to be true only for the purpose of deciding the present motion.

 In April 1994, Plaintiffs agreed to loan MECO Holdings $ 1 million to partially finance the acquisition of MECO. In addition to the $ 1 million received from Plaintiffs, MECO Holdings received an addition $ 500,000 from Selig to finance the purchase of MECO's outstanding stock. In July 1994, Defendant Scoggin purchased one-half of Selig's interest in MECO Holdings.

 Plaintiffs' loan was made in exchange for certain rights and obligations by MECO Holdings which were set out in an agreement dated April 4, 1994 (the "Purchase Agreement"). Among other things, the terms of the Purchase Agreement provided that Plaintiffs would receive a "senior promissory note" for $ 1 million plus interest, payable in five years; warrants for the purchase of 100,000 shares of stock in MECO; a covenant by MECO Holdings to furnish additional warrants for the purchase of 50,000 shares of MECO stock on each subsequent anniversary date of the Purchase Agreement in which debt or interest remained outstanding on the promissory note; and various affirmative covenants and limitations (including negative covenants) by MECO Holdings.

 Among the negative covenants were the following:

 
6B. Lien Debt and Other Restrictions. So long as any Note shall remain outstanding, the Company covenants that it will not and will ...

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