Letters of Credit Engagements—Transactions, Forms, Litigation, and Other Disputes

Transactions and Forms

• Represented money center banks as agent and issuing bank on syndicated loan and letter of credit facilities for various borrowers, including U.S. and international real estate opportunity funds, international distressed debt funds, private equity funds, an automobile distributor, U.S. and foreign manufacturers, real estate investment trusts, and others.
• Represented U.S. banks and New York branches of major foreign banks as issuers of letters of credit supporting project finance, industrial development bonds, insurance obligations of U.S. and foreign insurers and reinsurers, installment sales of timber and land, commercial paper programs, adverse judgments, commercial transactions, and other underlying obligations.
• Represented various U.S. banks, New York branches of major foreign banks, and large pension funds in connection with dozens of transactions involving the issuance of letters of credit and/or standby bond purchase agreements supporting tax-exempt variable rate demand bonds issued by state, municipal, and private tax-exempt entities.
• Represented global commercial bank in connection with the provision of white-label letter of credit and collection operations services to a U.S. national bank subsidiary of a global bank holding company.
• Revised forms of letters of credit, reimbursement agreements, applications, requests for transfers and assignment of proceeds, "silent confirmations" and other commitments to purchase, and discounting agreements for U.S. and foreign banks as well as corporations, including for letters of credit under ISP98 or the UCP, demand guarantees under the URDG, reimbursement undertakings under the URR, and bank payment obligations (BPOs) under the URBPO.
• Represented foreign bank that issued letter of credit as residual credit enhancement in connection with synthetic lease financing of major office building.
• Represented money center bank that issued a unique standby letter of credit available in a different amount each day, where the available amount could range from $1,000,000,000 to just $1.
• Represented issuers of syndicated letters of credit (where each issuer is obligated severally but not jointly), individually or as agent for all the issuers.
• Represented major U.S. bank in numerous alternative letter of credit (ALOC) transactions supported by credit default swaps (CDS).
• Represented issuers of standby letters of credit backstopped by counter-guarantees and surety bonds.
• Represented money center banks that issued demand guarantees under the ICC’s Uniform Rules for Demand Guarantees (URDG 758).
• Advised many banks as to the classification of letters of credit as trade credits or as performance or financial standby letters of credit for capital purposes.
• Represented banks as issuers of letters of credit for their own account rather than for the account of an applicant.
• Handled transactions involving open-ended letters of credit not capped as to a maximum principal amount or not containing a fixed expiration date.
• Represented money center banks as issuers of usance payable at sight (UPAS) letters of credit.
• Represented foreign bank from emerging country in note purchase agreement with major commodities firm where firm could repay its note obligations, on a dollar-for-dollar basis, with debt obligations of the bank in the event of a default by the bank, all in connection with a governmental program and commercial letters of credit issued for the commodities firm.
• Represented foreign export development agency as beneficiary of several standby letters of credit for different projects.
• Represented money center bank as agent on syndicated standby letter of credit facility to support obligations incurred in connection with mergers of commodity exchanges.
• Advised money center bank that confirmed a substantial trade letter of credit in obtaining releases from beneficiary, negotiating bank, issuer and adviser.
• Represented money center bank in revising its 70+ page brochure describing its letter of credit services.
• Represented money center bank that issued letters of credit for one commodities exchange in connection with its acquisition of another exchange.
• Represented money center banks and regional banks that issued standby letters of credit to support office building leases, construction projects, and mortgage financings.
• Represented importers and exporters in connection with commercial and standby letters of credit.
• Represented landlords and tenants in connection with standby letters of credit serving as tenant security deposits.
• Represented health insurance company as beneficiary of standby letters of credit supporting various payment obligations.
• Represented money center banks in obtaining credit insurance and other support for reimbursement obligations.

Litigation and Other Disputes

• Represented leading trade association of banks as successful amicus curiae in appellate case involving enforceability of international choice of law and forum clauses in dispute between confirming and issuing banks.
• Represented issuing bank in successfully dishonoring drawing where beneficiary failed to present originals (rather than copies) of the letter of credit and its amendments as required by the express terms of the credit.
• Obtained summary judgment dismissing wrongful dishonor claim by letter of credit beneficiary where issuer argued documents appeared inconsistent on their face, but beneficiary alleged that documents complied and that issuer should be precluded from asserting discrepancies because it took too long to dishonor and failed to state that it was holding the documents at the presenter’s disposal.
• Represented major California corporation in successful wrongful dishonor suit against major foreign bank where issuer claimed non-renewal of evergreen letter of credit and fraud. The U.S. Court of Appeals for the Second Circuit affirmed summary judgment for our client.
• Acted as letter of credit counsel and litigation co-counsel for bank that successfully dishonored fraudulent drawing where amount sought had already been paid outside the letter of credit.
• Represented 11 beneficiaries of 11 letters of credit in successfully recovering tens of millions of dollars and opposing the issuer’s efforts to impose an aggregate cap on the amount of the 11 letters of credit.
• Represented foreign branch of money center bank as an assignee of letter of credit proceeds in enforcing issuer’s waiver of set-off rights where issuer attempted to set-off against a debt it claimed was owed to it by the beneficiary/assignor.
• Represented money center bank that issued a counter-standby letter of credit in successfully opposing its applicant’s motion for an injunction to prevent the bank from honoring a drawing where the applicant alleged fraud by various parties, governmental and private.
• Represented various banks in successfully resisting attempts to enjoin payment of letters of credit and related accepted drafts, deferred payment undertakings, and reimbursement undertakings.
• Represented confirming bank in obtaining dismissal of suit by applicant for wrongful honor, negligence, breach of fiduciary duty, and other claims, asserted directly and via subrogation to the issuing bank’s rights.
• Represented money center bank seeking recovery from third parties, including by way of subrogation, where a party that agreed to reimburse the bank filed for bankruptcy.
• Represented issuing bank that was the target of legal actions in the U.S. and a foreign country seeking contradictory relief, and obtained an order in New York staying the case until the applicant and the beneficiary had completed an arbitration determining whether the drawing was fraudulent. 
• Represented money center bank and affiliate in defending claims for wrongful honor, fraud, aiding and abetting fraud, and conversion brought by applicant and his alleged principal. In a related, prior case, represented same money center bank in appeal to New York’s highest court in case concerning the standing of the alleged undisclosed principal of the applicant to sue the issuing bank for wrongful honor and fraud.
• Represented large foreign bank in wrongful dishonor suit on basis of inconsistency of documents and alleged material fraud by beneficiary.
• Advised New York office of an international bank in negotiating standstill and tolling agreements with other international banks to forestall litigation arising out of letter of credit disputes.
• Represented national bank sued for wrongful dishonor of commercial letters of credit issued for clothing importer that filed for bankruptcy.
• Advised large U.S. manufacturer concerning possible claims against letter of credit issuers, advisers, and confirmers as well as freight forwarders and carriers.
• Advised money center bank that honored its confirmation in reimbursement dispute with issuer.
• Represented money center bank in litigation to obtain collateral for contingent letter of credit reimbursement obligation.
• Represented branch of confirming bank in dispute between beneficiary and applicant, including obtaining an ex parte order tolling the time to cure a discrepant presentation.

^{Prior results do not guarantee a similar outcome.}