Zhang Rui Kang v. Zhongrong Intl. Resources Co., Ltd.

2024 NY Slip Op 34294(U)

• Court: New York Supreme Court, New York County
• Decided: December 4, 2024
• Docket: Index No. 654526/2024
• Status: Unpublished

Opinion

Zhang Rui Kang v Zhongrong Intl. Resources Co., Ltd. 2024 NY Slip Op 34294(U) December 4, 2024 Supreme Court, New York County Docket Number: Index No. 654526/2024 Judge: Joel M. Cohen Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. FILED: NEW YORK COUNTY CLERK 12/04/2024 01:01 PM INDEX NO. 654526/2024 NYSCEF DOC. NO. 48 RECEIVED NYSCEF: 12/04/2024

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 03M -----------------------------------------------------------------------------------X ZHANG RUI KANG, INDEX NO. 654526/2024

Plaintiff, MOTION DATE 08/30/2024 -v- MOTION SEQ. NO. 001 ZHONGRONG INTERNATIONAL RESOURCES CO., LTD., ZHONGRONG XINDA GROUP CO., LTD., LUCKYWAY CREATION LIMITED, CHOICE SUCCESS DECISION + ORDER ON GLOBAL LIMITED, ERA NOVA DEVELOPMENT S.A. MOTION Defendants. -----------------------------------------------------------------------------------X

HON. JOEL M. COHEN:

The following e-filed documents, listed by NYSCEF document number (Motion 001) 27, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47 were read on this motion for SUMMARY JUDGMENT IN LIEU OF COMPLAINT .

Plaintiff Zhang Rui Kang (“Plaintiff” or “Mr. Zhang”) moves for summary judgment in

lieu of complaint under CPLR 3213 against Defendants Zhongrong International Resources Co.,

Ltd. (“Zhongrong International”), Zhongrong Xinda Group Co., Ltd. (the “Parent Guarantor”),

Luckyway Creation Limited, Choice Success Global Limited, and Era Nova Development S.A.

(the “Subsidiary Guarantors”) (collectively, “Defendants”), for their failure to pay on notes

issued on October 26, 2017 by Defendant Zhongrong International, and the relevant guarantees.1

Defendants have not responded to this motion or otherwise appeared in this action. For the

following reasons, Plaintiff’s unopposed motion is granted.

Pursuant to CPLR 3213, a party may commence an action by motion for summary

judgment in lieu of complaint when the action is “based upon an instrument for the payment of

1 According to Plaintiff, the same Notes that are at issue in BFAM Asian Opportunities Master Fund, LP v. Zhongrong International Resources Co., Ltd., No. 654192/2022 (“BFAM”).

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money only or upon any judgment” (Oak Rock Fin., LLC v Rodriguez, 148 AD3d 1036, 1039 [2d

Dept 2017]). An “instrument for the payment of money only” is one that “requires the

defendant to make a certain payment or payments and nothing else” (Seaman-Andwall Corp. v

Wright Mach. Corp., 31 AD2d 136, 137 [1st Dept 1968]; Weissman v Sinorm Deli, Inc., 88

NY2d 437, 444 [1996]). “It is well settled that a promissory note, as an instrument for the

payment of money only, is entitled to the expedited procedure detailed in CPLR 3213” (R-H-D

Const. Corp. v Miller, 222 AD2d 802, 803 [3d Dept 1995]). Likewise, a “guarantee qualifies as

an ‘instrument for the payment of money only’ under CPLR 3213” (Torres & Leonard, P.C. v

Select Professional Realties, Ltd., 118 AD2d 467, 468 [1st Dept 1986]; State Bank of India, New

York Branch v Patel, 167 AD2d 242, 243 [1st Dept 1990]).

Here, Plaintiff has established a prima facie case for summary judgment pursuant to 3213

by providing proof of an agreement for the payment of money—the Indenture and Global

Note—wherein Defendant Zhongrong International issued 7.25% Senior Notes with an

aggregate principal amount of US $500 million dated October 26, 2017 (NYSCEF 15, 16); that

Defendant Zhongrong Xingda unconditionally guaranteed all obligations to pay principal and

interest on the Notes as parent guarantor, and Defendants Choice Success, Luckyway, and Era

Nova unconditionally guaranteed all obligations to pay principal and interest on those notes as

subsidiary guarantors (NYSCEF 15, Art 10-11); that Defendant failed to pay in accordance with

its terms (see NYSCEF 13 [“Kang Aff”] ¶¶7-10); and that the Guarantor Defendants have not

made any payments pursuant to their guarantees following Zhongrong International’s default

(Kang Aff ¶¶11-13).

Plaintiff submitted proof demonstrating service of this motion and associated papers on

Defendants’ designated agent for service of process, Law Debenture Corporate Services Inc. (see

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NYSCEF 15 § 12.07(c)) and served Zhongrong International and Choice Success in accordance

with the Hague Convention on the Service Abroad of Judicial and Extra-Judicial Documents in

Civil or Commercial Matters, Nov. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163, and Luckyway at

its registered address in Hong Kong, China, via personal delivery of a service packet (NYSCEF

28-46).

Moreover, Plaintiff has established that it has standing to bring this action as a beneficial

holder of the Notes by submitting the Affirmation of Tan Lay Peng Certifying Business Record,

dated June 3, 2024 (NYSCEF 20); Letter dated May 31, 2024 from UBSAGHong Kong Branch

showing Plaintiff’s position in the Notes held in Plaintiff’s account at UBSAGHong Kong

Branch (NYSCEF 21); Affirmation Certifying Business Record of Euroclear Bank SA/NV, dated

June 19, 2024 (NYSCEF 22); Statement of Account for the Purpose of Proof of Holding from

Euroclear to UBSAG, dated June 7, 2024 (NYSCEF 23) (see also BFAM Asian Opportunities

Master Fund, LP ET AL v Glory Health Industry Limited ET AL, Index No. 651863/2023 [Sup

Ct, NY County], NYSCEF 53; BFAM Asian Opportunities Master Fund, LP v Zhongrong Intern.

Resources Co., Ltd., 2024 NY Slip Op 32666[U], 2 [Sup Ct, NY County 2024]), and Defendants

have not rebutted this showing.

Finally, the Subsidiary Guarantors cannot escape their obligations by claiming fraudulent

transfer or failure of consideration (Zhongrong, 2024 NY Slip Op 32666[U], 4 [“[O]nly creditors

can challenge a debtor’s transactions as a fraudulent conveyance and, as such, the Answering

Defendants lack standing to assert that their own guarantees were ‘fraudulent conveyance[s]’

under Section 11.07”]).

Therefore, Plaintiff has demonstrated the existence of a default as to the payment of the

notes, and a failure to perform under the guarantees.

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Accordingly, it is

ORDERED that Plaintiff’s Motion for Summary Judgment in Lieu of Complaint is

GRANTED; it is further

ORDERED that Plaintiff is entitled to judgment against Defendants Zhongrong

International Resources Co., Ltd., Zhongrong Xinda Group Co., Ltd., Luckyway Creation

Limited, Choice Success Global Limited, and Era Nova Development S.A., jointly and severally,

for the principal and interest due under the Indenture and Notes, as well as pre-judgment interest;

and it is further

ORDERED that Plaintiff submit a proposed judgment to the Court within 21 days of this

Order.

This constitutes the Decision and Order of the Court.

12/4/2024 DATE JOEL M. COHEN, J.S.C. CHECK ONE: X CASE DISPOSED NON-FINAL DISPOSITION

X GRANTED DENIED GRANTED IN PART OTHER

APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE

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