ERA Capital L.P. v. Soleil Chartered Bank [2024]

ERA Capital L.P. v. Soleil Chartered Bank
No. 651984/2019, slip op. (N.Y. Sup. Ct. Dec. 23, 2024) [USA]

Type of Lawsuit: Bench trial for negligent misrepresentation claim by beneficiary against advising bank.

Topics: Advising Bank; Bench Trial; Fraud; Negligent Misrepresentation; Standby Letters of Credit; Wrongful Dishonor

Parties:
• Plaintiff/Creditor/Beneficiary – ERA Capital L.P.
• Defendant/Issuer – Soleil Chartered Bank
• Second Defendant/Parent – Soleil Capitale Corporation
• Third Defendant/Advising Bank – Regions Bank
• Non-party/Applicant – IR Real Investments GMBH
• Non-party/Debtor – IR Right Investment GMBH
• Non-party/Fraudster – Amir Bramly

Underlying Transaction: Loans ostensibly for real estate deal outside US.

LCs: Two letters of credit, one for USD 900,000 (and subject to UCP600), another for USD 1.8 million (no rules mentioned). Silent as to choice of law.

Decision: The Supreme Court of N.Y., Crane, J., granted judgment in favor of advising bank and dismissed the case.

Rationale: Burden of proof regarding negligent misrepresentation claim unmet where beneficiary failed to demonstrate existence of special relationship with advising bank, bank expressly disclaimed all liability apart from role as adviser, no basis of reasonable reliance on incorrect information, nor was advising bank proximate cause of losses.