New York Court of Appeals Victory for Capital One N.A.
Won an important victory before the New York Court of Appeals on behalf of a major national bank regarding the shortening of the limitations period contained in New York’s UCC 4-406 which governs a bank customer's duty to discover and report unauthorized signatures or alterations. In a significant decision for the banking industry, the Court of Appeals held that two financially sophisticated parties can modify UCC 4-406’s statutory one-year period for reporting unauthorized activity to 14 days, the time frame provided for in the bank documents between the parties. Herrick represented Capital One through every stage of the dispute, obtaining dismissal of the customer’s complaint at the trial court which awarded summary judgment to Capital One on all of its counterclaims.
Pharmaceutical Company – Dismissal from Consumer Fraud Class Action
Herrick secured a significant win for a pharmaceutical company in a New Jersey federal court ruling dismissing our client from a putative class action for failure to state a claim. The wide-ranging lawsuit involved allegations concerning alleged violations of consumer fraud laws in the marketing of product.
Commercial Bank – All Claims Dismissed in Litigation over Failed Loan
Negotiated a settlement on behalf of a commercial bank resulting in the voluntary dismissal of all claims filed in a New Jersey state court by an asset manager seeking to hold the bank responsible for losses on a failed loan made to a furniture business prior to the business’ bankruptcy filing. Claiming that it had been induced into extending the loan based, in part, on a multi- million revolving credit line extended to the business by our client, the plaintiff argued that the credit line and our client’s alleged failure to adequately monitor the business gave the plaintiff the impression that the business was is better financial shape than it was. Following Herrick’s filing of a third-party complaint, repeated motions to dismiss and an aggressive discovery, the plaintiff dismissed its claims against our client without any payment or admission of wrongdoing while negotiating settlements from the remaining defendants.
Multiple Claims Dismissed in Shareholder Derivative Litigation
Secured a ruling in Kings County Supreme Court on behalf of a garment manufacturer and certain affiliated individuals and entities that dismissed several causes of action in a purported shareholder derivative suit. Among the claims asserted was the allegation that a competing entity had been used by certain defendants to usurp business opportunities, and that ownership of a company facility had been fraudulently transferred to a charitable trust and foundation. The court granted our motion to dismiss the claim for a constructive trust over either the alleged competing entity or the foundation; an unjust enrichment claim against the charitable trust and foundation defendants; and a claim of rescission of the alleged fraudulent transfer of the facility, which the court found was time-barred.
Appellate Victory Dismissing Former Employer’s Claims against Asset Management Executive
Herrick secured a complete appellate victory in its defense of a hedge fund industry veteran against claims asserted by an asset management firm, where the client had formerly been employed as joint CEO. In its ruling, the Appellate Division, First Department unanimously reversed, with costs, the trial court’s order denying our motion to dismiss the complaint. In its opinion, the appellate court agreed that the plaintiff’s breach of contract, promissory estoppel and unjust enrichment claims, arising from an alleged oral agreement, were time-barred.
Ukrainian Technology Services Company – Breached Master Service Agreement
Herrick secured an extremely favorable settlement on behalf of a Ukraine-based technology service provider, resolving its claims against a US-based multinational financial services company in connection with more than $6 million in software development services rendered by our client. Significantly, this settlement was accomplished without engaging in potentially extensive and costly litigation.
Real Estate Finance Company – Entry and Collection of $12 Million Judgment
Herrick obtained the entry of a judgment totaling approximately $12 million against a real estate developer, two of his sons, and their affiliated entities. Following the entry of judgment, the judgment debtors refused to comply with multiple court orders holding the defendants in contempt and compelling them to respond to a variety of subpoenas. Herrick conducted depositions and other discovery regarding the judgment debtors' ability to pay and, upon doing so, filed an application for an installment payment order under C.P.L.R. § 5226. Following a four-day hearing before a court-appointed referee, the referee found one of the judgment debtors had an imputed annual income of $370,000 and that two of the other judgment debtors each had imputed annual incomes of $830,000. On that basis, the referee recommended, and the Supreme Court confirmed, that the judgment debtors are required to pay $406,000.00 per annum to Herrick's client, in equal installments of $33,833 per month, until the amounts due on the judgment have been paid and satisfied in full.
Taxi Medallion Financing Company – $27.5 Million Judgment
Represented a large specialty financing company in enforcing a series of agreements that provided the company with an interest in the appreciation of the underlying collateral. Following extensive briefing on a summary judgment motion, the court rejected defenses based on usury and the Small Business Investment Act and issued a $27.5 million judgment in favor of our client.
Property Management Firm – Successful Defense of Fraudulent Transfer Claims
Represented a high profile property management firm and one of its executives in litigation related to claims that the clients had fraudulently transferred ownership of a business in order to avoid liability for a multi million dollar default judgment obtained against the business after it had been sold. The case was settled in the wake of favorable rulings that included the dismissal of claims against the executive and the determination that funds transferred by our clients for the purpose of eliminating an intercompany loan prior to the sale of the business did not constitute a fraudulent conveyance and were therefore not subject to disgorgement.
Real Estate Developers – Summary Judgment in Litigation over Recourse Provision in Mezzanine Loan Guaranty
Defense of the guarantors of a multimillion dollar mezzanine loan secured for the development of several Florida condominium projects in an action filed by the lender in New York federal court. Seeking the full outstanding balance of the loan with interest, an amount totaling nearly $190 million, the lender claimed that certain transfers out of an escrow account holding condominium purchasers’ deposits triggered a full recourse provision in the guaranty. Herrick successfully argued that the full recourse provision of the guaranty was never triggered, obtaining a ruling granting our motion for summary judgment and dismissing all claims against our clients.
DataTreasury – Appellate Court Upholds Dismissal of Complaint Seeking $15 Billion in Damages
Secured a victory for DataTreasury and its officers before the Appellate Division, Second Department, obtaining a ruling affirming the trial court's dismissal of a complaint seeking $15 billion in damages filed by a purported joint venture partner claiming fraud and the alleged breach of an oral joint venture involving a patent for check imaging technology. In affirming the dismissal, the appellate court held that the breach of contract claim was time barred, and that the fraud claims lacked the requisite specificity and were duplicative of the breach of contract claims.
Investment Fund – Breach of Participation Agreement Dispute
Herrick negotiated a very favorable settlement on behalf of an alternative investment fund in a breach of contract suit arising from a transaction in which our client acquired a 10 percent participation in a loan to a mining company. We sued in New York state court after realizing that a significant portion of the collateral securing the loan had been disposed of without our client receiving its pro rata share of the proceeds as required under the participation agreement. Herrick was able to negotiate a substantial settlement for the client that avoided the need for protracted litigation.
Specialty Finance Company – Summary Judgment Upheld on Appeal
Herrick secured an appellate win for a specialty finance company, successfully defending the trial court's decision granting our motion for summary judgment and awarding money damages with costs. The underlying dispute involved a borrower’s failure to pay a multi-million dollar participatory interest - a percentage of the collateral’s appreciation - in addition to a fixed interest monthly payment under the terms of a $16 million credit arrangement to finance the purchase of taxi medallions. The Appellate Division, First Department affirmed the trial court’s decision, rejecting the borrower’s counterclaims that the participatory interest provision to which it had agreed violated New York law and the federal Small Business Investment Act of 1958.
Multinational Cosmetics Company – Favorable Resolution to Breach of Contract Action
Represented a multinational cosmetics company in litigation filed in New York federal court by a Washington, DC area retailer asserting breach of contract, detrimental reliance, and tortuous interference claims, which sought monetary damages and a preliminary injunction preventing our client from violating a retailer agreement that allegedly required it to supply cosmetic products to the plaintiff. After obtaining an order denying the plaintiff’s motion for a preliminary injunction, Herrick negotiated a settlement on favorable terms that resolved the litigation.
Major League Sports Team – Dismissal of False Advertising Class Action
Successful defense of a major league professional sports team, obtaining pre-motion dismissal of all claims in a high-profile putative class action alleging deceptive trade practices and false advertising in connection with a very large sale of memorabilia.
Manufacturer – Summary Judgment in Breach of Contract Action
Successfully represented a Queens, NY-based packaging manufacturer, obtaining summary judgment in a New York state court breach of contract action against a former customer who failed to pay for goods ordered and received.
Borrower – Negotiated Settlement to Resolve Dispute with Guarantor
Negotiated a favorable settlement on behalf of a borrower to resolve litigation initiated by a guarantor seeking to recover damages arising from our client’s alleged default on loans totaling over $7 million.
DataTreasury Corp. – $100 Million Dispute with Former COO
Successful defense of DataTreasury Corp. in a 41-day bench trial arising from claims by the company's former Chief Operating Officer that he was entitled to exercise certain stock options granted to him during his tenure. We helped obtain a decision dismissing all of the former executive's claims, based on his disloyal conduct in trying to usurp business opportunities coupled with his failure to properly exercise the options, defeated the plaintiff's multiple post-trial motions, and successfully defended those decisions before the New York State Appellate Division, Second Department which unanimously affirmed.
Manufacturer – All Claims Dismissed in JAMS Arbitration Initiated by Former CEO and Majority Shareholder
Achieved total victory for a promotional products manufacturer and distributor, defeating all claims asserted in an arbitration for breach of employment and shareholders agreements, breach of fiduciary duty, and shareholder oppression initiated by the company’s former CEO and former majority shareholder. The panel found that the claimant had indeed been properly terminated, referencing numerous instances in which the claimant charged the client for non-business related expenses or used company resources to conduct side businesses for the sole benefit of the claimant’s friends and relatives. Finding the remaining claims meritless, the panel ultimately found our client, as the prevailing party, entitled to recover the full costs of the arbitration, including legal fees.
Insurance Coverage Dispute – Theft by Armored Car Executives
Representation of a major national bank and its subsidiary in an insurance coverage dispute involving cash transported in armored cars. A unanimous New York State Appellate Division, First Department panel ruled in favor of our clients, finding that the "in transit" clause of the insurance policy also covers theft by the armored car company's executives while the money was in their vault as part of the contracted-for delivery process.
Multinational Food & Beverage Company – Successful Defense in New Jersey Franchise Practices Litigation
Successfully defended the U.S. affiliate of a multinational food & beverage company sued in New Jersey federal court by a distributor alleging violation of the state's Franchise Practices Act. In both the district court and on appeal to the Third Circuit, Herrick delivered key victories in opposing the plaintiff's efforts to secure an injunction preventing our client from effecting its contractual right not to renew an exclusive distribution agreement between the parties. In the district court, we obtained rulings partially dismissing the complaint, denying plaintiff's motion for a preliminary injunction, and denying plaintiff's motion for an injunction pending its appeal to the U.S. Court of Appeals for the Third Circuit. Following expedited briefing, the appellate court found in our client's favor, affirming the district court's rulings. In light of these developments, the parties ultimately reached a settlement and stipulated to the dismissal of this litigation.
Breach of Contract, Fraud and Unjust Enrichment Claims against Brazilian Bank
Successfully represented a U.S. specialty food manufacturer and importer in litigation filed in New Jersey federal court asserting breach of contract, fraud and unjust enrichment claims against a Brazilian bank and certain suppliers in connection with the bank’s alleged improper drawing on a standby letter of credit arranged by our client to finance the manufacture of food products in Brazil. After obtaining a recommendation from the Magistrate Judge, later confirmed by the district court, denying the bank’s motion to dismiss for lack of personal jurisdiction, Herrick secured a favorable settlement that resolved claims against the bank and later obtained a default judgment against the Brazilian supplier entities.
Apparel Manufacturer – Successful Defense in Breach of Contract and Unpaid Compensation Action
Successful defense of a leading manufacturer of coats and outerwear in a dispute related to the acquisition of the assets of a business, and an employment agreement between our client and the business's former owner. The court dismissed plaintiffs' complaint, which asserted claims for breach of the asset purchase agreement and employment agreement, and granted our client's counterclaims for breach of those same agreements. Following the trial court's determination of liability in our client's favor, we reached a favorable settlement regarding damages to our client.
Consumer Products Manufacturer – All Claims Dismissed in Bankruptcy Adversary Proceeding
Successfully defended a multinational consumer products company in a New York federal bankruptcy action filed by a public relations and marketing firm asserting breach of contract, quantum meruit and promissory estoppel claims stemming from the termination of service agreements between the parties. Herrick obtained pre-trial rulings denying the plaintiff’s motion for summary judgment on the pleadings and dismissing a claim for defamation by inference. Following a bench trial on the merits, the remaining 12 claims against our client were dismissed in a judgment that also awarded substantial damages on our client’s counterclaim.
Commercial Bank – Pre-Trial Dismissal of Negligence Claims
Obtained pre-trial dismissal of negligence claims against a commercial bank in connection with a former employee's misappropriation and embezzlement of plaintiff's assets.
Trust Administrator – Breach of Contract
Negotiated favorable settlement on behalf of a provider of specialized administrative and corporate governance services to resolve claims of breach of contract, gross negligence and fraud related to administration of trust in connection with a portfolio of student loan backed notes.
Mezzanine Lender – Term Sheet Breach
Representation of a mezzanine lender in an action in New York State Supreme Court against a borrower for breach of a term sheet. The court granted our motion for summary judgment and awarded damages.
Technology Company – Licensing Dispute
Represented the developer of an innovative insurance product in litigation filed in New York State court arising from the alleged breach of a licensing agreement which gave our client exclusive access to certain data that serves as the foundation for the new product. All claims were voluntarily dismissed under a settlement agreement, and the parties entered into a new, more favorable, licensing agreement.
Telecommunications Company Founder – Breakup and Sale Dispute
Representation of the founder of a pre-paid telephone card company in successfully defending a suit by alleged former partners seeking $250 million in damages related to the $400 million sale of the company to a publicly held telecom company.
Reinsurance Company – Successful Prosecution of Malpractice Claims Related to Insurance Agreements
Successful representation of a prominent insurance managing agent and reinsurance company in their claims of legal malpractice against former counsel arising from insurance agreements prepared by the defendant, a New York-based insurance law firm. This matter was settled for approximately $1 million.
Financial Institution – Breach of Fiduciary Duty Defense
Representation of a large financial institution alleged to have breached its duties to a customer in connection with the diversification of a large account. We litigated the matter to a point where it could be settled through mediation on terms very favorable to our client.
Bain v. Silverpoint – International Finance Dispute
Represented the owner of an Estonian galvanized steel plant known as Galvex in his dispute with Silverpoint, a hedge fund. The owner sued Silverpoint for breach of an agreement permitting the owner to sell or restructure the plant's debt, and promising to pay the owner millions of dollars. Silverpoint moved to dismiss the case on jurisdictional and forum non conveniens grounds, but Herrick defeated the motion and the litigation proceeded to a satisfactory conclusion in New York. (Bain v. Silverpoint (Slip Op. N.Y. Co. 2007))