Article

Bank Officer Negligence in LC Issuance.

Note:

The Ninth Circuit Court of Appeals in a Memorandum Opinion affirmed the decision of the U.S. District Court for the Northern Mariana Islands (Munson, J.) granting summary judgment in favor of City Trust Bank in a third party action for negligence against Ana G. Duenas. The opinion indicated that the facts supported the conclusion that Duenas served as a Director of City Trust and in that capacity never reviewed relevant banking laws or the bank's by-laws, approved the issuance of one LC without investigating the financial condition of the applicant or obtaining any security, and attempted to cancel the LC without consulting either an attorney or other members of the board. In the principal action, the beneficiary had recovered the amount of the LC from the bank.

©1998 INSTITUTE OF INTERNATIONAL BANKING LAW & PRACTICE

COPYRIGHT OF THE INSTITUTE OF INTERNATIONAL BANKING LAW & PRACTICE

The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.