In a November 14, 2008 decision, Judge Bucaria granted a request for a preliminary injunction to enjoin defendants using, drawing down, or depleting a letter of credit from plaintiff on the grounds that defendants breached a contract and engaged in fraud. (1) The plaintiff demonstrated a likelihood of success on the merits of its breach of contract claim because the contract required the plaintiff to issue a letter of credit in favor of defendants as security for a loan, and the defendants’ breached the contract by failing to fund the loan as required. (2) The plaintiff demonstrated irreparable injury by showing its credit will be adversely affected if defendants can draw down the letter of credit, and monetary damages will not adequately compensate plaintiff because defendants were insolvent. (3) The balance of equities favored the plaintiff because while the plaintiff satisfied all conditions of the loan agreement with the defendants, the defendants breached the contract.
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