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Note: Milwaukee Mile Holdings, LLC. (Applicant) entered into a licensing agreement with the Wisconsin State Fair Park Board (Beneficiary) to operate a racetrack at the Wisconsin State Fair Park grounds. The agreement required the Applicant to obtain a standby letter of credit to assure payment of its licensing fee obligations to Beneficiary. At the request of Applicant, JP Morgan Chase Bank, N.A. (Issuer) issued a standby LC subject to New York law for US$3,664,500. In addition to Applicant, two investors as well as a marketing entity (Guarantors) entered into a reimbursement agreement with Issuer.

A series of disputes resulted in a mutual release of the first licensing agreement between Applicant and Beneficiary. Both parties then entered into a second licensing agreement, which Beneficiary terminated, asserting that Applicant had "defaulted". Applicant sent a termination letter citing breach by Beneficiary. Beneficiary then demanded payment of US$2,613,338 on the LC, prompting Applicant to sue to enjoin Beneficiary from drawing on the standby. Applicant joined Issuer, as a necessary and indispensible party to the lawsuit. The court declined to enjoin Issuer from paying on the LC, and with Issuer's consent, dismissed Issuer.

After Issuer honored the letter of credit, Guarantors and Applicant failed to reimburse Issuer. Guarantors sued for a declaratory judgment that they were not required to reimburse Issuer, alleging that Issuer improperly amended the LC. As a result of these events, which occurred after it had been dismissed, Issuer attempted to reenter the case by moving to intervene.

The Circuit Court for Dane County, Colas, J., denied the Issuer's motion on the grounds of judicial estoppel. On appeal, the Court of Appeals of Wisconsin, District Four, Vergeront, Lundsten, and Higginbotham, J.J., in an opinion by Lundsten, J. affirmed.

[JEB/jes]

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