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Siam Commercial Bank Public Co. Limited v. Bel-Aire Knitworks

June 28, 2006

THE SIAM COMMERCIAL BANK PUBLIC COMPANY LIMITED, PLAINTIFF,
v.
BEL-AIRE KNITWORKS, INC., DAISY HUANG, JAMES HUANG, KENNETH HUANG, ET AL., DEFENDANTS.
THE SIAM COMMERCIAL BANK PUBLIC COMPANY LIMITED, PLAINTIFF,
v.
DAISY HUANG, KENNETH HUANG, PLATINUM STAR ENTERPRISES LLC, ET AL., DEFENDANTS.
DAISY HUANG, PLATINUM STAR ENTERPRISES LLC, PLAINTIFFS,
v.
THE SIAM COMMERCIAL BANK PUBLIC COMPANY LIMITED, DEFENDANT.



The opinion of the court was delivered by: Alvin K. Hellerstein, U.S.D.J.

ORDER CONFIRMING ATTACHMENT, DISMISSING COUNTERCLAIM, DENYING DISQUALIFICATION, AND DENYING INTERVENTION

Three related actions have been brought arising out of a number of loans, mortgages and guarantees.

I. The 2004 Lawsuit

In the first action, 04 Civ. 10319 (AKH), filed December 30, 2004, Plaintiff The Siam Commercial Bank Public Company Limited ("Siam") alleged that Defendant Bel Aire Knitworks, Inc. ("Bel Aire") had failed to make payment on the outstanding $250,000 in principal and over $36,000 in accrued and unpaid interest due under a revolving credit note in the original principal amount of $10 million. Siam further alleged that Defendants Daisy Huang, Kenneth Huang, and James Huang tendered guarantees to Plaintiff Siam for the original note, and Defendant James Huang tendered a mortgage as security, and that they had refused to make good on the guarantees. The parties reached a settlement pursuant to which Defendant James Huang would pay to Plaintiff Siam $250,000 in principal, plus accrued and unpaid interest, plus collection costs to be determined by the court (Order dated Nov. 1, 2005, 04 Civ. 10319). Plaintiff Siam then obtained a judgment against the Defendants for collection costs in the amount of $134,795.50 in attorneys' fees and $6,229.15 in disbursements. (Order dated February 17, 2006, Judgment dated February 17, 2006, 04 Civ. 10319). Defendants filed a notice of appeal of the judgment to the United States Court of Appeals for the Second Circuit on March 15, 2006.

II. The 2005 Lawsuit

In the second action, 05 Civ. 5551 (AKH), filed June 14, 2005, Plaintiff Siam alleged that $1,975,000 was past due on a two million dollar note made in favor of Siam by Platinum Star, plus accrued interest of $486,328.24, and expenses of collection. Plaintiff alleged that Kenneth Huang's and Daisy Huang's guarantees of the note were also defaulted, and that a third mortgage given by Daisy Huang on her penthouse apartment at 422 East 72nd Street, securing up to $800,000 of the debt, was subject to foreclosure. The in the second action parties stipulated that Defendants would not oppose Plaintiff's motions for summary judgment, for default judgment, for appointment of a referee, and to amend the caption (Stipulation and Order dated November 5, 2005, 05 Civ. 5551). I granted summary judgment to the plaintiff and against the defendants, and ordered foreclosure of Daisy Huang's apartment (Order dated December 8, 2005, 05 Civ. 5551). I adopted the Report of the Referee without modification (Order dated March 21, 2005, 05 Civ. 5551), and a judgment of foreclosure and sale was entered (Judgment dated April 10, 2005, 05 Civ. 5551). Foreclosure is proceeding, and plaintiff states that it expects to recover $800,000, the full amount of the security, from the forthcoming sale. This leaves $1,175,000 of principal on the Platinum Star note, and interest (said to be $536,197.76 to January 11, 2005) and costs of collection remaining outstanding.

A. Motion for Confirmation of Attachment

I granted, ex parte, a motion for attachment against the property of Kenneth Huang, a non-domiciliary who is said to reside in Illinois and to lack assets sufficient to pay his judgment debt, and because a sale by him of his condominium apartment, unit 11F, 155 West 70th Street, appeared imminent (Order dated February 23, 2006, 05 Civ. 5551). Clearly, plaintiff Siam is entitled to the attachment, the grounds in Article 62 of the New York Civil Practice Laws and Rules having been satisfied. Clearly, as well, plaintiff has shown the need for continuing the levy, since there appear to be no other resources available to pay the Platinum Star defaulted debt. Plaintiff has succeeded on the merits, summary judgment having been entered in its favor. Accordingly, I order that the attachment is confirmed.

B. Motion to Intervene

James Huang filed a motion to intervene. He alleges that he has an interest in the attached apartment of his brother, Kenneth Huang, which will be affected by the lawsuit. James alleges that originally, on March 22, 1990, he purchased the apartment, that a few months later he gave a second mortgage to Siam to secure its loans to his family, and that thereafter he sold a half interest in the apartment to his brother, Kenneth. James alleges that Kenneth did not pay maintenance, forcing James to pay for Kenneth's benefit, and that Kenneth's interest should be equitably charged in favor of James.

Kenneth Huang's motion to intervene is denied. Whatever the rights and obligations between the brothers Huang, they are subordinate to the interests of Siam. James Huang can assert any interest that he has in relation to his brother in separate action against his brother. The intervention of James Huang is not necessary to allow complete relief to be given as between Siam and Kenneth Huang and will complicate this already unduly complicated set of lawsuits, and prejudice Siam.

Accordingly, I deny James Huang's motion to intervene.

III. The 2006 Lawsuit

The third action, 06 Civ. 1991 (AKH), was removed to federal court March 14, 2006. Plaintiffs Daisy Huang and Platinum Star allege a twenty-year success story through the Huangs' company, Bel-Aire Knitwork, Inc., and a twenty-year banking relationship with Siam. Platinum Star and Huang allege that one Eric Chan, alleged to be a representative of Siam in its Hong Kong branch, induced Daisy Huang to invest $2 million in a mutual fund in 1992, without supporting papers or documentation. In 2000, it was announced that the investment had been unsuccessful, resulting in a loss to plaintiffs Huang and Platinum Star of over $1.5 million, with a final value of $450,000. This investment loss coincided with financial difficulty for the Huangs' business, Bel Aire. Siam refused to extend more credit to the Huangs and their business in mid-2001, stating that it was winding down its New York business and, soon thereafter, Siam terminated its banking business in the United States in 2002. The loan defaults and the foreclosures, both described above, followed, leading to other business problems for the Huangs. On ...


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