Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
2Activity
0 of .
Results for:
No results containing your search query
P. 1
Case 3:07 Cv 01606 Adc Bjm

Case 3:07 Cv 01606 Adc Bjm

Ratings: (0)|Views: 374 |Likes:
Published by davejphys
Th report and recommendation for summary judgement on the contract claims in Westernbank v. Kachkar and Inyx
Th report and recommendation for summary judgement on the contract claims in Westernbank v. Kachkar and Inyx

More info:

Published by: davejphys on Sep 23, 2009
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

12/07/2009

pdf

text

original

 
IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF PUERTO RICOWESTERNBANK PUERTO RICO,Plaintiff,v.JACK KACHKAR 
 ET AL.
, Defendant. Civil No. 07-1606 (ADC/BJM)
REPORT AND RECOMMENDATION
Plaintiff Westernbank Puerto Rico (“Westernbank”) moved for partial summary judgment onits claims for breach of contract and collection of monies against defendants Inyx, Inc. (“Inyx”), Jack Kachkar, and Victoria Benkovitch (collectively “defendants”). (Docket No. 223). Defendants opposed(Docket No. 275) and Westernbank replied. (Docket No. 310). Westernbank submitted a statementof uncontested facts in support of its motion (Docket No. 223-2) and defendants duly opposed. (Docket No. 275-2). Defendants submitted a counter-statement of material facts (id.), and Westernbank 
1
opposed. (Docket No. 370). Westernbank submitted a supplemental statement of uncontested facts,to which defendants did not object or oppose. (Docket No. 310-2). The parties supported their 
2
statements of fact with citations to record evidence. (Docket Nos. 223-3 – 223-28; 275-3 – 275-27;310-3 – 310-9; 370-2 – 370-10). This case was referred to me by the presiding district court judge for a report and recommendation on all dispositive motions. (Docket No. 160). After careful review of the briefs on file and evidence submitted, I recommend that Westernbank’s motion be granted.
References to defendants’ opposition to plaintiffs’ statement of uncontested facts are cited
1
herein as (Docket No. 275-2, ¶ _), while references to defendants’ counter-statement of material factsalso include the page number: (Docket No. 275-2, p. _, ¶ _).Therefore, where those supplemental facts are supported by record evidence, the court deems
2
them admitted. See D.P.R.R. 56(e) (“[f]acts contained in a supporting or opposing statement of materialfacts, if supported by record citations as required by this rule, shall be deemed admitted unless properlycontroverted”).
Case 3:07-cv-01606-ADC-BJM Document 437 Filed 03/03/2009 Page 1 of 25
 
Westernbank Puerto Rico v. Jack Kachkar, et al.
Page 2Civil No. 07-1606 (ADC/BJM)
REPORT AND RECOMMENDATION
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This case concerns various loan agreements between Westernbank and Inyx and its whollyowned subsidiaries, Inyx USA, Ltd., Inyx Europe, and Ashton Pharmaceuticals (with Inyx, the “InyxBorrowers”) through which Westernbank loaned over $142 million to the Inyx Borrowers. (Docket No. 223-2, ¶ 1, 6, 17). Under the terms of the agreements, Westernbank agreed to provide the InyxBorrowers with lines of credit upon which they could draw down based on a percentage of their accounts receivable, as reflected through invoices and reports provided by the Inyx Borrowers toWesternbank. (Id., 2).Specifically, Inyx and its subsidiary, Inyx USA, entered into a Loan and Security Agreementwith Westernbank in March 2005 (the “USA Loan Agreement”) (Id., ¶ 6) and Inyx subsidiaries InyxEurope and Ashton Pharmaceuticals entered into a separate Loan and Security Agreement withWesternbank in August 2005 (the “EU Loan Agreement”) (Id., ¶ 17) (collectively, the “LoanAgreements”). To secure payment and performance of their obligations under each Loan Agreement,the borrowers granted to Westernbank a security interest over virtually all of their assets. (Id., ¶ 9, 19).Each agreement provided that, in the event of default, Westernbank was entitled to accelerate allamounts due and owed to it, demand immediate payment from the borrowers, and foreclose on the borrowers’ pledged collateral. (Id., ¶ 11, 20). The parties also entered into a Cross-Default Agreement providing that (1) an event of default under one Loan Agreement would be considered an event of default under both, (2) in the case of an event of default under either agreement, Westernbank couldexercise all of its rights and remedies under either agreement, and (3) all of the collateral under eachLoan Agreement would serve as collateral under both. (Id., ¶ 21). In addition, the USA LoanAgreement borrowers entered into a separate agreement (the “EU Guarantee”) guaranteeing paymentof all obligations under the EU Loan Agreement. (Id., ¶ 24).Both Loan Agreements precluded any amendments, modifications, waivers, or discharges of the agreement or any of its terms “orally or by course of conduct.” (Id., ¶ 12, 22). The agreementsstated that they could be modified, amended, or waived “only by a written agreement signed by an
Case 3:07-cv-01606-ADC-BJM Document 437 Filed 03/03/2009 Page 2 of 25
 
Westernbank Puerto Rico v. Jack Kachkar, et al.
Page 3Civil No. 07-1606 (ADC/BJM)
REPORT AND RECOMMENDATION
authorized officer of [Westernbank].” (Id., ¶ 13, 22). Moreover, the agreements provided thatWesternbank “shall not, by any act, delay, omission or otherwise be deemed to have expressly or impliedly waived any of its rights, powers and/or remedies unless such waiver shall be in writing andsigned by an authorized officer of [Westernbank].” (Id., ¶ 13, 22). The agreements also containedintegration clauses providing that the agreement itself and certain other related financing agreementsand instruments “represents the entire agreement and understanding concerning the subject matter hereof and thereof between the parties hereto, and supersedes all other prior agreements,understandings, negotiations and discussions, representations, warranties, commitments, proposals,offers and contracts concerning the subject matter hereof, whether oral or written.” (Id., ¶ 15, 23).Between March and November 2006, three letter agreements evidenced Westernbank’s limitedwaiver of certain breaches of the Loan Agreements. (Id., ¶ 41-45). A March 31, 2006 letter stated thatWesternbank had agreed “to waive certain specific violations” of the Loan Agreements for the fiscal period ended April 30, 2006, but expressly provided that the waivers “should not be construed or understood to be a waiver of [Westernbank’s] rights to declare any future default(s) under the termsof the [Loan Agreements].” (Id., ¶ 42). In an August 11, 2006 letter, Westernbank agreed to waive“certain specific violations” through August 21, 2006, but expressly stated that it did not waiveWesternbank’s “rights to declare any future default(s)” under the agreements. (Id., ¶ 43). Finally, a November 20, 2006 letter memorialized Westernbank’s waiver of “certain specific violations” throughDecember 15, 2006, but again expressly reserved Westernbank’s “rights to declare any futuredefault(s)” under the agreements. (Id., ¶ 44). Westernbank did not sign any additional waiver lettersafter November 20, 2006. (Id., ¶ 45).Also on November 20, 2006, Westernbank sent Inyx a letter confirming that it had been madeaware of “the inclusion of $37,665,000 of pre-billings in the borrowing base used by [Inyx] for  purposes of determining advances under the working capital lines of credit” and “various advancesmade by [Inyx] in connection with future acquisitions of intellectual property, net assets, outstandingstock of operating companies, and other investments.” (Id., ¶ 46). Westernbank informed Inyx that
Case 3:07-cv-01606-ADC-BJM Document 437 Filed 03/03/2009 Page 3 of 25

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->