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Marquette Commercial Finance, LLC v. Soleil Chartered Bank

United States District Court, S.D. New York

January 10, 2020

MARQUETTE TRANSPORTATION FINANCE, LLC, Plaintiff,
v.
SOLEIL CHARTERED BANK. et al., Defendants.

          OPINION AND ORDER

          Lorna G. Schofield United States District Judge

         Plaintiff Marquette Transportation Finance, LLC (“Marquette”) moves for summary judgment regarding its first claim for relief against Defendant Soleil Chartered Bank (“SCB”) for its wrongful refusal to honor a letter of credit. Defendants Soleil Capitale Corporation (“Soleil Capitale”), Soleil Capitale Group (“Soliel Group”) and Govind Srivastava (together, the “Moving Defendants”) move to dismiss the Amended Complaint (“Complaint”), which alleges that they are alter egos of SCB and therefore jointly liable with it. For the reasons below, Plaintiffs motion for summary judgment is granted, and Moving Defendants' motion to dismiss is denied as to Srivastava and otherwise granted.

         I. BACKGROUND

         A. Facts Relevant to the Motion for Summary Judgment

         The facts below are taken from the parties' submissions on the motion for summary judgment and are undisputed unless otherwise noted. Marquette provides operational financing to Sam Kane Beef Processors (“Sam Kane”). On March 15, 2018, Sam Kane obtained a Standby Letter of Credit from SCB to secure its obligations to Marquette. The letter of credit states in pertinent part:

We, Soleil Chartered Bank . . . undertake to pay against this Standby Letter of Credit . . . in favor of Marquette Commercial Finance . . . the sum of USD 7, 000, 000.00 (USD seven million only) upon presentation and surrender of this Standby Letter of Credit at the counters of Soleil Chartered Bank and the claim must be sent via bonded courier service. . . . The claim must include a copy of the default notice from Marquette Commercial Finance to Sam Kane Beef Processors, LLC. The notice shall be subject to verification by Soleil Chartered Bank.

         The letter of credit by its terms is subject to the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (the “UCP”).[1]

         By letter dated September 4, 2018, Marquette submitted a draw request on the letter of credit by presenting Marquette's claim and tendering the original letter of credit as well as a copy of the default notice at the counters of SCB via bonded courier service. Srivastava, writing on SCB letterhead, rejected Marquette's claim because it “was never subjected to verification by Soleil Chartered Bank nor was Soleil Chartered Bank even informed of the notification, ” citing the language in the letter of credit that “the notice shall be subject to verification by Soleil Chartered Bank.” Marquette disputed that the letter of credit required notice to SCB of the event of default before Marquette drew on the letter of credit.

         B. Facts Relevant to the Motion to Dismiss

         The facts alleged in the Complaint pertaining to the issuance and non-payment of the letter of credit are substantively the same as those stated above. The additional facts below are taken from the allegations in the Complaint, see TCA Television Corp. v. McCollum, 839 F.3d 168, 177 (2d Cir. 2016), and assumed to be true only for purposes of the motion to dismiss. See Hu v. City of New York, 927 F.3d 81, 88 (2d Cir. 2019). Moving Defendants seek to be dismissed from this litigation, challenging the allegation that they are alter egos of SCB jointly liable for SCB's wrongful conduct.

         SCB is the banking and trade finance arm of Soleil Capitale, and both are subsidiaries of Soleil Group. The three companies share the same senior executives. Govind Srivastava is the Chairman and CEO of Soleil Group, CEO of Soleil Capitale and principle executive officer and Managing Director of SCB. The Complaint alleges that he uses Soleil Group, SCB and Soleil Capitale to benefit himself and his family at the expense of third parties. Srivastava's son Adhar Srivastava is Soleil Group's President and SCB's Director of Trade Finance. Dhwani Srivastava is Soleil Group's Vice President. Balwinder Kaur is Soleil Group's COO, who also does work for Soleil Capitale. Li Zhong is Soleil Group's Financial Controller and accountant, who also does work for all three companies.

         The three companies also share team members. Syed Ali Abbas, Darren Grose and Elizabeth Abercrombie all do trade finance work for Soleil Group and SCB and also have email addresses associated with SCB. The three companies share the same office in New York and the same telephone and fax numbers.

         II. THE MOTION FOR SUMMARY JUDGMENT

         A. ...


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