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DCW Litigation Digest
Newman v. HSBC Bank USA, N.A.
Years after Lessees attempted to cancel LC, they sued Successor Bank for conversion, breach of contract, unjust enrichment, and damages.
Newman v. HSBC Bank USA, N.A.
No. 151764/2016, 2019 WL 3778354 (N.Y. Sup. Ct. Aug. 12, 2019) [USA]
Topics: Breach of Contract; Commercial Lease; Continuing Wrong; Conversion; Letter of Credit; Statute of Limitations
Parties:
• Plaintiffs/Lessees – Michael and Linda Newman
• Defendant/Successor – HSBC Bank USA, N.A.
• Issuer – Republic National Bank
No. 151764/2016, 2019 WL 3778354 (N.Y. Sup. Ct. Aug. 12, 2019) [USA]
Topics: Breach of Contract; Commercial Lease; Continuing Wrong; Conversion; Letter of Credit; Statute of Limitations
Parties:
• Plaintiffs/Lessees – Michael and Linda Newman
• Defendant/Successor – HSBC Bank USA, N.A.
• Issuer – Republic National Bank
Summary Note:
To secure their obligations under a commercial lease, Michael and Linda Newman (Lessees) obtained a USD 25,000 letter of credit issued by Republic National Bank (Issuer). Lessees also obtained a USD 300,000 line of credit from Issuer which Lessees collateralized by depositing USD 500,000 worth of stock certificates with Issuer. Issuer was subsequently acquired by HSBC Bank USA, N.A. (Successor). After Lessees’ business wound down, Lessees attempted to have the LC cancelled on two occasions with the second request including the original LC. Apparently, Successor failed to cancel the LC “for reasons that are unknown.” Subsequently, with Lessees’ line of credit cancelled, Successor agreed to release the collateral previously held by Issuer if Lessees agreed to deposit USD 25,000 into a savings account as collateral for the LC. Lessees agreed.