Hunt v. Bankers Trust Co.
| Decision Date | 26 March 1987 |
| Docket Number | 3-86-2012-H.,Civ. A. No. 3-86-1684-H |
| Citation | 689 F. Supp. 666 |
| Parties | William Herbert HUNT, et al., Plaintiffs, v. BANKERS TRUST COMPANY, et al., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
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Ben L. Krage, Kasmir Willingham & Krage, Dallas, Tex., Stephen F. Gordon, Edwin A. McCabe, McCabe, Gordon, P.C., Boston, Mass., for plaintiffs.
Jim K. Choate, Dewey R. Hicks, Jr., John P. Lilly, Brice & Mankoff, Dallas, Tex., Frank G. Ker, Winslow Christian, Bank of America, Los Angeles, Cal., for Bank of America.
Robert F. Finke, Mayer, Brown & Platt, Chicago, Ill., Michael Niebruegge, Mayer, Brown & Platt, Houston, Tex., Carla R. Voelker, Richardson, Tex., for Bank of Montreal.
Fletcher L. Yarbrough, James E. Coleman, Peter Tierney, Tyler A. Baker, Carrington, Coleman, Sloman & Blumenthal, Dallas, Tex., D. Ronald Reneker, Bird & Reneker, Dallas, Tex., for the Bank of Nova Scotia (Intervention Case Only).
James G. Ulmer, J. Michael Baldwin, Baker & Botts, Houston, Tex., Robert W. Jordan, Erin Y. Baker, Baker & Botts, Dallas, Tex., for Bank of Scotland.
Robert M. Cohan, Lee M. Simpson, Cohan, Simpson, Cowlishaw, Aranza & Wulff, Dallas, Tex., David B. Eizenman, Moses & Singer, Robert P. Blank, Burton M. Freeman, Bankers Trust Co., New York City, for Bankers Trust Co.
James C. Kean, James E. Babcock, Thomas H. Lee, Dotson, Babcock & Scofield, Houston, Tex., Henry L. Goodman, Andrew D. Gottfried, Zalkin, Rodin & Goodman, New York City, for Chemical Bank.
Kenneth R. Wynne, Bracewell & Patterson, Houston, Tex., Robert H. MacKinnon, Mark P. Zimmett, Shearman & Sterling, New York City, for Citibank, N.A.
Michael M. Baylson, John Horstmann, Duane, Morris & Heckscher, Philadelphia, Pa., Steven Gutman, Legal Dept., European American Bank, New York City, Mike Joplin, Strasburger & Price, Dallas, Tex., for European American Bank & Trust Co.
Michael Lowenberg, Richard C. Levin, Maureen Armour, Nancy Ratchford, Akin, Gump, Strauss, Hauer & Feld, Dallas, Tex., for First City Nat. Bank of Houston.
James G. Ulmer, J. Michael Baldwin, Baker & Botts, Houston, Tex., Robert W. Jordan, Erin Y. Baker, Baker & Botts, Dallas, Tex., for First Interstate Bank of California.
W. Ted Minick, Winstead, McGuire, Sechrest & Minick, Houston, Tex., Jay J. Madrid, Winstead, McGuire, Sechrest & Minick, Dallas, Tex., Peter J. Kilchenmann, Lynn A. Goldstein, The First National Bank of Chicago, Law Dept., Chicago, Ill., for The First Nat. Bank of Chicago.
J. Carlisle DeHay, Jr., DeHay & Blanchard, Dallas, Tex., David A. Ranheim, Linda M. Freyer, Dorsey & Whitney, Minneapolis, Minn., for the First Nat. Bank of St. Paul.
Thomas A. Graves, Ernest E. Figari, Jr., James Pulis, Johnson & Swanson, Dallas, Tex., for InterFirst Bank—Dallas, N.A.
Melvyn L. Cantor, John J. Kerr, Jr., Thomas C. Rice, Wm. O. Murphy, Simpson, Thacher & Bartlett, New York City, Alfred H. Ebert, Jr., Andrews & Kurth, Houston, Tex., Charles R. Haworth, Andrews & Kurth, Dallas, Tex., for Manufacturers Hanover Trust Co.
Daniel Williams, Paul B. Zuydhoek, Phillips, Lytle, Hitchcock, Blaine & Huber, Buffalo, N.Y., William J. Brennan, Phillips, Lytle, Hitchcock, Blaine & Huber, New York City, Stan McMurry, Rain Harrell Emery Young & Doke, Dallas, Tex., for Marine Midland Bank, N.A.
W. Frank Carroll, Irvin C. Ness, Martha J. Hardwick, Stinson, Mag & Fizzell, Dallas, Tex., for Mellon Bank, N.A.
James P. Grove, IV, Rex H. White, Jr., White & Grove, P.C., Austin, Tex., Vincent S. Walkowiak, Fulbright & Jaworski, Dallas, Tex., James C. Slaughter, Fulbright & Jaworski, Houston, Tex., for National Westminster Bank, P.C., International Westminster Bank.
Jerry P. Jones, David R. McAtee, Timothy R. McCormick, Thompson & Knight, Dallas, Tex., W. Michael Byrd, Akin, Gump, Strauss, Hauer & Feld, Dallas, Tex., for RepublicBank Dallas, N.A. (Intervention Case Only).
Jim K. Choate, Dewey R. Hicks, Jr., John P. Lilly, Brice & Mankoff, Dallas, Tex., Carol Ann Bartlett, Senior Counsel, Royal Bank of Canada, Law Dept., Montreal, Quebec, for Royal Bank.
James G. Ulmer, J. Michael Baldwin, Baker & Botts, Houston, Tex., Robert W. Jordan, Erin Y. Baker, Baker & Botts, Dallas, Tex., for Security Pacific Nat. Bank.
Jess Hall, Jr., D. Mitchell McFarland, James W. Paulsen, Liddell, Sapp & Zivley, Houston, Tex., Vera R. Bangs, Liddell, Sapp & Zivley, Dallas, Tex., for Texas Commerce Bank Nat. Ass'n.
Ronald E. Cook, R.T. Nassberg, Mayor, Day & Caldwell, Houston, Tex., for the Toronto Dominion Bank.
Walter L. Stratton, Mitchel A. Karlan, Gibson, Dunn & Crutcher, New York City, Thomas Craddock, Gibson, Dunn & Crutcher, Dallas, Tex., Thomas B. Anderson, Jr., Vernon O. Teofan, Freytag, Perry, LaForce, Rubinstein & Teofan, Dallas, Tex., for Wells Fargo Bank, N.A.
Before the Court are the Penrod Banks'1 Motion for Summary Judgment, Citibank's Motion for Partial Summary Judgment, and First National Bank of Chicago's Motions for Partial Summary Judgment on the Foreign Exchange Debt and the Hitachi Letter of Credit, all filed November 6, 1986; the Placid Banks'2 Motion for Partial Summary Judgment filed December 5, 1986; National Westminster's and International Westminster's Motion for Partial Summary Judgment filed January 6, 1987; Marine Midland's Motion for Partial Summary Judgment filed January 16, 1987; Plaintiffs' Opposition filed January 27, 1987; and the Replies of the Penrod Banks, the Placid Banks, Marine Midland, and the Westminster group, all filed February 9, 1987; together with the briefs and exhibits submitted by the parties in support of these filings. The Court heard oral argument on the motions on March 16, 1987.
In their motions the Banks seek enforcement of certain loan agreements, notes, and a guaranty against Plaintiffs. The Court concludes that summary judgment must be DENIED on the basis of two circumstances, neither of which would alone suffice to avert summary judgment. The first is that Plaintiffs in their pleadings and affidavits assert defenses that, if established, would be legally effectual to bar enforcement of the debt instruments. The second is that discovery is yet at an early stage in this case, and Plaintiffs may not be required to support their defenses with detailed summary judgment proof until after an adequate opportunity to discover such evidence. The Court notes, however, that even those defenses that the Court concludes to be legally effectual against summary judgment at this time may not suffice against a future motion if after adequate opportunity for discovery Plaintiffs fail to raise genuine fact issues as to those defenses.
The Court also concludes that at least four of the defenses asserted by Plaintiffs are legally ineffectual to prevent summary judgment on the loan agreement and notes, even if these defenses were conclusively proved. Finally, the Court makes no decision regarding the availability of interim restitutionary relief to the parties prior to final resolution of this case.
The following facts are not disputed. In 1983 Placid Oil Company and certain wholly-owned subsidiaries executed an agreement (the "Placid Agreement") with the Placid Banks under which the Placid Banks loaned more than one billion dollars. The debt was evidenced by notes executed by Placid and the subsidiaries. Placid also executed a guaranty of the borrowers' obligations under the Placid Agreement and notes.
In 1984 Penrod Drilling Company executed an agreement (the "Penrod Agreement") with the Penrod Banks under which the Penrod Banks loaned approximately $850 million in term and revolving credits. The debt was evidenced by notes executed by Penrod and the Penrod partners, the Nelson Bunker Hunt, Lamar Hunt, and William Herbert Hunt Trust Estates. Both the Placid Agreement and the Penrod Agreement provided in part for the restructure of substantial pre-existing debts.
Toward the end of 1985 and during the first few months of 1986, Plaintiffs and the Banks engaged in negotiations concerning rescheduling the indebtedness under the Placid and Penrod Agreements. On June 24, 1986 Plaintiffs filed suit against the Banks. The Banks counterclaimed to collect the indebtedness.
The Placid borrowers failed to make a scheduled payment of principal on March 27, 1986. Affidavit of D. Rogers, Appendix to Placid Banks' Motion at tab 18. The failure to make this payment constituted a default under the Placid Agreement entitling the Placid Banks to accelerate the debt. See Placid Agreement at § 7.1. The agent bank declared acceleration and gave notice and demand to the Placid borrowers. See Affidavit of Rogers. The court finds that at the present time, at least $705,050,450.72 in principal alone remains unpaid under the Placid Agreement. See Exhibit A, attached to Placid Banks' Motion.
The Penrod Borrowers failed to make a scheduled payment of interest on May 27, 1986 or within five days after that date. Affidavit of J. Hansen, Appendix to Penrod Banks' Motion at tab 2. This failure constituted a default under the Penrod Agreement. See Penrod Agreement at § 9. The Penrod Agreement and notes provided for automatic acceleration. Id. The Court finds that at the present time, at least $714,210,338.21 in principal alone remains unpaid under the Placid Agreement. See Affidavits, Appendix to Penrod Banks' Motion at tabs 2-14.
Plaintiffs have made no payments since these initial defaults. See Affidavits of Rogers and Hansen. They do not dispute that they executed and delivered the loan agreements and notes and received the loan funds. They do not dispute and the Court finds that the principal amounts set forth above, viz., $705,050,450.72 and $714,210,338.21, remain unpaid. However, Plaintiffs assert a number of claims and defenses as grounds for avoidance of or offset against any obligations under the loan agreements, guaranty, and notes.
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