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New York Commercial Bank v. Pullo

Sup Ct, NY County

March 4, 2013

NEW YORK COMMERCIAL BANK, Plaintiff,
v.
PAUL J. PULLO and GENE V. PULLO, Defendants. Index No. 653452/12

Unpublished Opinion

DECISION AND ORDER

MelvinL. Schweitzer, J.

This is a motion for summary judgment in lieu of complaint pursuant to CPLR 3213. Defendants' payment obligations arise pursuant to personal guarantees in favor of plaintiff with respect to the debt of their wholly-owned fuel oil distribution entities.

Background

In May 2012, New York Commercial Bank (NYCB) entered into a financing agreement (Financing Agreement) with three fuel oil distribution entities (Borrowers) providing for a revolving line of credit in the maximum amount of $55, 000, 000. Paul and Gene Pullo (Guarantors) jointly and severally guaranteed (the Guarantees) the Borrowers' payment obligations under the Financing Agreement.

The Borrowers defaulted under the terms of the Financing Agreement by drawing down loans in excess of an amount permitted by a formula set out therein. NYCB notified the Borrowers of non-compliance with the terms of the Financing Agreement, and, in September 2012, notified the Borrowers that the entire amount of the indebtedness under the Financing Agreement had become due and payable.

NYCB also demanded that Guarantors jointly and severally pay the full amount due under ] the Financing Agreement.' Guarantors have not paid under the Guarantees.

Borrowers filed for bankruptcy relief, and, in the bankruptcy proceeding, their Chief; Restructuring Officer admitted overdrawing funds under the Financing Agreement and that the entire amount of debt outstanding under the Financing Agreement had become due and payable.

Discussion

Guarantors oppose this motion on the grounds that NYCB has not proven the Borrowers', ; default and that resort to extrinsic evidence is needed to prove the case, and therefore the;; Guarantees are not instruments for the payment of money only. Neither argument has merit.

The statement of Borrower's Chief Restructuring Officer in the bankruptcy proceeding admitted both the Borrowers' overdrawing under the Financing Agreement, and the acceleration of all amounts borrowed thereunder. The default has been proven and, in fact, no need to review documents other than the Guarantees is necessary. Even were it necessary to review the Financing Agreement, New York law is clear that this does not prevent NYCB from successfully \> moving pursuant to CPLR 3213. Embraer Fin. Ltd. v Servicos Aeros Profesionales, S.A., 42 A.D.3d 380 (1st Dept 2007).

A cursory review of the Financing Agreement also shows that Borrowers' filing of a bankruptcy petition constitutes an event of default permitting NYCB to declare all amounts, ' borrowed under the Financing Agreement to be due and payable. This, again, proves the amount due.

Plaintiffs motion for summary judgment is granted.

Accordingly, it is

ORDERED that plaintiffs motion for summary judgment is granted.


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