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Note: To secure a 10-year lease of premises in Miami Beach, Florida, Club (Applicant), an entity affiliated with Baywatch Café (Tenant), requested that Sun West Bank of Las Vegas, Nevada issue a LC in the amount of US$325,000 that could be drawn down by "Beneficiary as Landlord" in the event of breach of lease by Tenant. When Applicant filed for bankruptcy, the Nevada Bankruptcy Court ordered that the proceeds be held in trust by Beneficiary's counsel but the proceeds were instead deposited into a bank account under the control of Counsel for Sidney Bailey, an individual substantially involved with Applicant, which subsequently disbursed the funds to Bailey.

Contending that it had a superior claim to the LC proceeds, Fremont Investment and Loan (Beneficiary's Assignee) filed suit against Counsel and Bailey, asserting, among other claims, breach of contract and unjust enrichment. Beneficiary's Assignee sought to amend the Complaint to add a breach of fiduciary duty claim, and also to supplement the Complaint with allegations concerning the assignment to it of claims and rights to the proceeds by a judgment creditor, Koniver Stern Group, which was awarded US$560,000 in a separate action against Beneficiary. On a motion, the United States District Court for the District of Nevada, Pro, J., permitted Beneficiary's Assignee to amend the complaint by adding supplemental allegations, but denied its request to otherwise amend it.

[JEB/adk]

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