DCW Updates
DCW Monthly: December 2024
We’re thrilled to share the newest edition of DCW’s premium monthly content. This month’s highlights include: * Five
DCW Litigation Digest
Experior Global Warehousing, LLC v. BTC III Hamilton DC LLC [2024]
Applicant motioned for preliminary injunction following failed mediation.
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Experior Global Warehousing, LLC v.
BTC III Hamilton DC LLC
No. 23-8472 (RK) (JBD), slip op. (July 15, 2024 D.N.J.)
Type of Lawsuit: Applicant motioned for preliminary injunction following failed mediation.
Topics: Breach of Contract; Injunction; Irreparable Harm; Letter of Credit; Temporary Restraining Order (TRO).
Parties:
• Plaintiff/Tenant/Applicant – Experior Global Warehousing, LLC
• Defendant/Landlord/Beneficiary – BTC III Hamilton DC LLC
• Issuer – Huntington National Bank
Underlying Transaction: Commercial lease of 266,000-square foot warehouse.
LC: USD 1,500,000 letter of credit; silent as to choice of law.
Decision: The U.S. District Court for the District of New Jersey, denied the preliminary injunction motion and vacated a temporary restraining order.
Rationale: Preliminary injunction against LC beneficiary denied where applicant can neither demonstrate a likelihood of success on its breach of contract claim nor show irreparable harm.
BTC III Hamilton DC LLC
No. 23-8472 (RK) (JBD), slip op. (July 15, 2024 D.N.J.)
Type of Lawsuit: Applicant motioned for preliminary injunction following failed mediation.
Topics: Breach of Contract; Injunction; Irreparable Harm; Letter of Credit; Temporary Restraining Order (TRO).
Parties:
• Plaintiff/Tenant/Applicant – Experior Global Warehousing, LLC
• Defendant/Landlord/Beneficiary – BTC III Hamilton DC LLC
• Issuer – Huntington National Bank
Underlying Transaction: Commercial lease of 266,000-square foot warehouse.
LC: USD 1,500,000 letter of credit; silent as to choice of law.
Decision: The U.S. District Court for the District of New Jersey, denied the preliminary injunction motion and vacated a temporary restraining order.
Rationale: Preliminary injunction against LC beneficiary denied where applicant can neither demonstrate a likelihood of success on its breach of contract claim nor show irreparable harm.
Factual Summary:
To supports its lease obligations for a commercial warehouse, Experior Global Warehousing, LLC (Tenant/Applicant) applied for and caused Huntington National Bank (Issuer) to issue a USD 1.5 million letter of credit in favor of BTC III Hamilton DC LLC (Landlord/Beneficiary). By the Lease Agreement, Landlord/Beneficiary could demand LC sums “[u]pon the occurrence of any default by Tenant ... to satisfy any arrears of Rent”. The LC was secured by equipment used by Tenant/Applicant in its business operations; Landlord/Beneficiary allegedly required an LC in lieu of a security deposit because of Tenant/Applicant’s inadequate credit report. No LC text, choice of law or practice rules were mentioned.
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Related Litigation:
• Experior Global Warehousing, LLC v. BTC III Hamilton DC LLC, No. 23-8472 (RK) (JBD), slip op. (D.N.J. Aug. 25, 2023) (denying original motion for TRO);
• Experior Global Warehousing, LLC v. BTC III Hamilton DC LLC, No. 23-8472 (RK) (JBD), slip op. (July 18, 2024 D.N.J.), (denying motion for stay of order pending appeal).
• Experior Global Warehousing, LLC v. BTC III Hamilton DC LLC, No. 23-8472 (RK) (JBD), slip op. (D.N.J. Aug. 25, 2023) (denying original motion for TRO);
• Experior Global Warehousing, LLC v. BTC III Hamilton DC LLC, No. 23-8472 (RK) (JBD), slip op. (July 18, 2024 D.N.J.), (denying motion for stay of order pending appeal).
The five-year Lease began January 2023 and carried a monthly rent of USD 391,463.33. Tenant/Applicant intended to use the warehouse to store packaged products on concrete flooring. Lease Agreement Section 3.1 provided the warehouse would be leased “as is”. Landlord/Beneficiary also disclaimed any warranty that the warehouse would be suitable for a particular purpose; i.e. the warehouse was not designed for a specific tenant. Tenant/Applicant could terminate the lease only if more than half of the premises were affected by fire or “other casualty” and Landlord/Beneficiary could not timely repair the warehouse with insurance proceeds. The Lease did, however, require that Landlord/Beneficiary tender the premises with HVAC systems, plumbing and electrical systems in “good working order.”
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