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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
2010 LC CASE SUMMARIES No. 5:09-CV-380-KKC, 2010 U.S. Dist. LEXIS 135728 (E.D. Ky. Central Div. Dec. 6, 2010) [USA] Topics: Replacement of LCs
Note: Fifth Third Bank, Inc. (Issuer) had issued one or more LCs on behalf of MW Mapleleaf Partners LLC (Applicant). A dispute arose and Issuer sued Applicant. A settlement resulted by which Applicant was required to replace Issuer's outstanding LCs with those issued by another bank. When Applicant failed to do so and eliminate Issuer's exposure, and also failed to make a scheduled installment payment pursuant to the settlement agreement, Issuer moved to enforce the settlement agreement. Applicant failed to respond. The U.S. District Court for the Eastern District of Kentucky, Wier, Magistrate J., recommended disposition in favor of Issuer to enforce the settlement agreement.
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The Magistrate Judge concluded that failure to make payment and replace the letters of credit constituted a breach of the settlement agreement and recommended "1) enforcement of ¶ 4 [of the settlement agreement] and thus replacement of the letters of credit (i.e., elimination of [Issuer's] letter of credit exposure); 2) delivery of the tendered deed in lieu to [Issuer]; 3) payment of attorneys fees associated with enforcement of the settlement agreement; and 4) continued confidentiality of the settlement terms".
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