Credit Lyonnais S.A. v. Korea Asset Management Corp.

Second Circuit

Credit Lyonnais S.A. v. Korea Asset Management Corp.

111 F. App'x 44

CourtCourt of Appeals for the Second Circuit

DecidedSeptember 21, 2004

DocketNo. 03-9171

StatusPublished

This text of 111 F. App'x 44 (Credit Lyonnais S.A. v. Korea Asset Management Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Credit Lyonnais S.A. v. Korea Asset Management Corp., 111 F. App'x 44 (2d Cir. 2004).

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Opinion

SUMMARY ORDER

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the District Court be and it hereby is AFFIRMED.

Plaintiff financial institutions brought this suit in the Southern District of New York (Chin, J.) against Defendants Namsan Restructuring No I. Co., Ltd. (“Namsan”) and Korea Asset Management Corporation (“KAMCO”).¹ Plaintiffs alleged various claims arising from the failure of Defendant Namsan to “reconcile”² and purchase certain loans tendered in the context of a buy-out of the foreign (i.e., non-Korean) debt of the Korean conglomerate Daewoo. In their complaint, Plaintiffs argued that Defendant Namsan breached its contract with the tendering institutions, and that Defendant KAMCO — a non-signatory to the contract, to whom Namsan had assigned the power to reconcile the debt — should be held liable for tortious interference or pursuant to alter ego liability. Plaintiffs appeal from the decision of the District Court, granting summary judgment to the Defendants.

We agree with the Plaintiffs that Defendant Namsan was obligated to endeavor in good faith to reconcile and purchase the contested debt. See, e.g., 511 West 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 746 N.Y.S.2d 131, 773 N.E.2d 496, 500-01 (2002). But, we also conclude that whatever requirements of good faith existed under the contract or, more generally, under New York law were met here as a matter of law. KAMCO, to whom Namsan had assigned the right to make reconciliation decisions, was acting on advice of counsel, and in response to serious potential legal defects when it decided not to reconcile the tendered debt. Under these circumstances, the Plaintiffs have failed to create a material issue of fact as to whether the decision not to reconcile was made in good faith. Cf. Dalton v. Educational Testing Service, 87 N.Y.2d 384, 639 N.Y.S.2d 977, 663 N.E.2d 289, 291 (1995) (discussing the requirements of good faith under New York law).

Because Defendant Namsan did not breach its contract with the Plaintiffs, the Plaintiffs, as a matter of law, cannot [46]*46make out their claims against Defendant KAMCO.

We have considered all of the Plaintiffs’ arguments, including the claim that the debt was automatically reconciled as a result of some statements of Namsan’s counsel, and find them to be without merit. Accordingly, we AFFIRM the judgment of, the district court.

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SUMMARY ORDER

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the District Court be and it hereby is AFFIRMED.

Plaintiff financial institutions brought this suit in the Southern District of New York (Chin, J.) against Defendants Namsan Restructuring No I. Co., Ltd. (“Namsan”) and Korea Asset Management Corporation (“KAMCO”).¹ Plaintiffs alleged various claims arising from the failure of Defendant Namsan to “reconcile”² and purchase certain loans tendered in the context of a buy-out of the foreign (i.e., non-Korean) debt of the Korean conglomerate Daewoo. In their complaint, Plaintiffs argued that Defendant Namsan breached its contract with the tendering institutions, and that Defendant KAMCO — a non-signatory to the contract, to whom Namsan had assigned the power to reconcile the debt — should be held liable for tortious interference or pursuant to alter ego liability. Plaintiffs appeal from the decision of the District Court, granting summary judgment to the Defendants.

We agree with the Plaintiffs that Defendant Namsan was obligated to endeavor in good faith to reconcile and purchase the contested debt. See, e.g., 511 West 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 746 N.Y.S.2d 131, 773 N.E.2d 496, 500-01 (2002). But, we also conclude that whatever requirements of good faith existed under the contract or, more generally, under New York law were met here as a matter of law. KAMCO, to whom Namsan had assigned the right to make reconciliation decisions, was acting on advice of counsel, and in response to serious potential legal defects when it decided not to reconcile the tendered debt. Under these circumstances, the Plaintiffs have failed to create a material issue of fact as to whether the decision not to reconcile was made in good faith. Cf. Dalton v. Educational Testing Service, 87 N.Y.2d 384, 639 N.Y.S.2d 977, 663 N.E.2d 289, 291 (1995) (discussing the requirements of good faith under New York law).

Because Defendant Namsan did not breach its contract with the Plaintiffs, the Plaintiffs, as a matter of law, cannot [46]*46make out their claims against Defendant KAMCO.

We have considered all of the Plaintiffs’ arguments, including the claim that the debt was automatically reconciled as a result of some statements of Namsan’s counsel, and find them to be without merit. Accordingly, we AFFIRM the judgment of, the district court.

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111 F. App'x 44, Counsel Stack Legal Research, https://law.counselstack.com/opinion/credit-lyonnais-sa-v-korea-asset-management-corp-ca2-2004.

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