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Merrill Lynch Commercial Finance Corp v. Rci Jewelry Corp.

February 22, 2011

MERRILL LYNCH COMMERCIAL FINANCE CORP., PLAINTIFF,
v.
RCI JEWELRY CORP., RODNEY HAKIMI, CYRUS HAKIMI, RAYMOND HAKIMI, AND JOHN DOE #1 THROUGH JOHN DOE #12, THE LAST TWELVE NAMES BEING FICTITIOUS AND UNKNOWN TO PLAINTIFF; BEING PERSONS HAVING OR CLAIMING AN INTEREST IN OR LIEN UPON THE COLLATERAL DESCRIBED IN THE COMPLAINT, DEFENDANTS.



The opinion of the court was delivered by: Hurley, Senior District Judge:

MEMORANDUM & ORDER

Plaintiff Merrill Lynch Commercial Finance Corp. ("Plaintiff" or "Merrill Lynch") commenced this action against defendants RCI Jewelry ("RCI"), Rodney Hakimi, Cyrus Hakimi, and Raymond Hakimi to recover money due under a loan agreement and personal guaranties. Presently before the Court is Plaintiff's unopposed motion for summary judgment against RCI, Raymond Hakimi, and Cyrus Hakimi (collectively, "Defendants")*fn1 pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, Plaintiff's motion is GRANTED.

BACKGROUND

The following facts, taken from the pleadings and Plaintiff's Local Civil Rule 56.1 Statement ("Pl.'s 56.1"), have not been disputed by Defendants and will, therefore, be deemed admitted.*fn2 The Parties

Merrill Lynch is incorporated under the laws of the State of Delaware and is the "assignee of the interests of" Merrill Lynch Business Financial Services Inc. ("MLBFS"). (Compl. ¶ 1.) RCI is a New York corporation with its principal place of business in Great Neck, New York. (Id. ¶ 2.) Cyrus and Raymond Hakimi are domiciled in New York (id. ¶¶ 4, 5) and were, at all relevant times, principals of RCI (Decl. of Daniel J. Downs, dated May 3, 2010 ("Downs Decl.") ¶ 3).

The Loan Agreement

On or about October 19, 2004, RCI and MLBFS entered into a Working Capital Management Account ("WCMA") Loan and Security Agreement ("Loan Agreement") under which MLBFS extended to RCI a commercial line of credit not to exceed $450,000. (Pl.'s 56.1 ¶ 1; Downs Decl., Ex. A.) In exchange, RCI executed a promissory note that provided, in relevant part:

FOR VALUE RECEIVED, [RCI] hereby promises to pay to the order of MLBFS . . . the following: (a) on the Maturity Date, or if earlier, on the date of termination of the WCMA Line of Credit, the WCMA Loan Balance; (b) interest at the Interest Rate (or, if applicable at the Default Rate) on the outstanding WCMA Loan Balance . . . ; and (c) on demand, all other sums payable pursuant to this Loan Agreement . . . . (Downs Decl., Ex. A at § 2.1.) The Loan Agreement also set forth numerous occurrences that "shall constitute 'Event of Default' under this Loan Agreement," including:

Failure to Perform. Any Credit Party shall default in the performance or observance of any covenant or agreement on its part to be performed or observed under any of the Loan Documents . . ., and such default shall continue unremedied for ten (10) Business Days . . .

Bankruptcy Event. Any Bankruptcy Event shall occur. (Id. at § 3.5(c), (f).) Pursuant to the Loan Agreement, if an "Event of Default" occurred, MLBFS could exercise one or more remedies, including "declar[ing] the principal of and interest on the WCMA Loan Balance, and all other Obligations to be forthwith due and payable . . . ." (Id. at § 3.6(a)(ii).) The Guaranties

Plaintiff asserts that as inducement for entering into the Loan Agreement, Raymond and Cyrus Hakimi each gave MLBFS "their continuing, absolute and unconditional guaranties . . . of RCI's indebtedness to MLBFS." (Pl.'s 56.1 ¶ 2.) The guaranties signed by Raymond and Cyrus Hakimi on October 29, 2004 (the "Guaranties") provided, in relevant part, that:

[T]he undersigned ("Guarantor") hereby unconditionally guarantees to MLBFS: (i) the prompt and full payment when due . . . from [RCI] to MLBFS under the Guaranteed Documents [including the Loan Agreement], . . . and (iii) the prompt and full payment and performance of all other indebtedness, liabilities and obligations of [RCI] set forth in the Guaranteed Documents . . . . (Downs Decl., Ex. B.) The Guaranties also provided that:

Upon the occurrence and during the continuance of any Event of Default under the Guaranteed Documents, any or all of the indebtedness hereby guaranteed then existing shall, at the option of MLBFS, become immediately due and payable from Guarantor . . . .

(Id.)

The Parties' Amendments to and MLBFS's Assignment of ...


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