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Note: Needing a standby LC that it was unable to obtain by itself, M2 Consultancy LLC (M2) requested Marko Capital Corp. (Marko) to obtain issuance of one in the amount of USD 5 million. The quoted fee was USD 650, 000 of which M2 paid an initial fee of USD 435, 000. Agreeing to arrange for issuance, Marko wrote M2 stating:

“IF THE BANK FAILS TO ISSUE THE LETTER OF CREDIT OR [BANK GUARANTEE] AS REQUESTED, WE SHALL RETURN THE FEE AND ALL OUR RESPONSIBILITIES DUTIES AND OBLIGATIONS TO THE ACCOUNT PARTY, BENEFICIARY, BROKER/CONSULTANT IF ANY WILL END.”

When no LC was issued, Marko refused to refund the initial fee. M2 sued Marko for breach of contract, seeking the money paid. The United States District Court, E.D. New York, Go, Magistrate, recommended that the court award M2 the amount of USD 435, 000 in damages and USD 58, 885.74 in prejudgment interest plus accrued interest at a daily rate of USD 107.26 until entry of judgment.

[KCM]

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