Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 1 of 10 PageID: 1
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 1 of 10 PageID: 1
`
`LASSER HOCHMAN, LLC
`
`75 Eisenhower Parkway
`Roseland, New Jersey 07068
`973—226~2700
`
`973—226-0844 (FAX)
`
`Attorneys for Plaintiff
`rzucker@lasserhochman.com
`
`UNITED STATES DISTRICT COURT
`
`DISTRICT OF NEW JERSEY
`
`COFUND II LLC,
`
`Plaintiff,
`
`vs.
`
`HITACHI CAPITAL AMERICA CORP,
`
`Defendant.
`
`Civil Action No.
`
`COMPLAINT
`
`Plaintiff CoFund II LLC (hereinafter “CoFund”), a New Jersey limited liability company with
`
`its principal place of business located at 55 Lane Road, Suite 430, Fairfield, New Jersey 07004,
`
`complains of defendant Hitachi Capital America Corp. (hereinafter “Hitachi”)and says:
`
`JURISDICTION
`
`1.
`
`Plaintiff CoFund is a New Jersey limited liability company with its principal place
`
`of business located at 55 Lane Road, Suite 430, Fairfield, New Jersey 07004.
`
`2.
`
`3.
`
`Plaintiff CoFund is a citizen of the State of New Jersey.
`
`Defendant Hitachi is a Delaware corporation with its principal place of business in
`
`the State of Connecticut.
`
`4.
`
`5.
`
`Defendant Hitachi is a citizen of both Delaware and Connecticut.
`
`This court has original jurisdiction of this civil action pursuant to 28 U.S.C. §
`
`
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 1 of 10 PageID: 1
`
`LASSER HOCHMAN, LLC
`
`75 Eisenhower Parkway
`Roseland, New Jersey 07068
`973—226~2700
`
`973—226-0844 (FAX)
`
`Attorneys for Plaintiff
`rzucker@lasserhochman.com
`
`UNITED STATES DISTRICT COURT
`
`DISTRICT OF NEW JERSEY
`
`COFUND II LLC,
`
`Plaintiff,
`
`vs.
`
`HITACHI CAPITAL AMERICA CORP,
`
`Defendant.
`
`Civil Action No.
`
`COMPLAINT
`
`Plaintiff CoFund II LLC (hereinafter “CoFund”), a New Jersey limited liability company with
`
`its principal place of business located at 55 Lane Road, Suite 430, Fairfield, New Jersey 07004,
`
`complains of defendant Hitachi Capital America Corp. (hereinafter “Hitachi”)and says:
`
`JURISDICTION
`
`1.
`
`Plaintiff CoFund is a New Jersey limited liability company with its principal place
`
`of business located at 55 Lane Road, Suite 430, Fairfield, New Jersey 07004.
`
`2.
`
`3.
`
`Plaintiff CoFund is a citizen of the State of New Jersey.
`
`Defendant Hitachi is a Delaware corporation with its principal place of business in
`
`the State of Connecticut.
`
`4.
`
`5.
`
`Defendant Hitachi is a citizen of both Delaware and Connecticut.
`
`This court has original jurisdiction of this civil action pursuant to 28 U.S.C. §
`
`
`
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 2 of 10 PageID: 2
`Case 2:16-cv-Ol790-SDW-LDW Document 1 Filed 03/31/16 Page 2 of 10 PageID: 2
`
`l332(a)(1) in that it is a civil action where the matter in controversy exceeds the sum or value of
`
`$75,000.00, exclusive of interest and costs, and is between citizens of different states.
`
`FIRST COUNT
`
`6.
`
`Forest Capital LLC (hereinafter “Forest”) was in the business of factoring and
`
`providing other forms of commercial financing to clients with approved credit.
`
`7.
`
`In order to meet the funding needs of some of Forest’s clients, Forest and CoFund
`
`established a framework for CoFund to participate in such funding from time to time.
`
`8.
`
`On or about January 12, 2012, CoFund entered into a Master Participation Agreement
`
`(hereinafter “the MFA”) with Forest Capital, LLC.
`
`9.
`
`Under the terms of the MPA, from time to time, Forest offered and sold to CoFund,
`
`and CoFund accepted and purchased, participations in factoring transactions that Forest made with
`
`its clients.
`
`10.
`
`As security for each participation, Forest granted to CoFund a first priority security
`
`interest in the Financing Documents, as defined in the MPA, and the Collateral, as defined in the
`
`MPA, relating to each Transaction, as defined in the MPA, to the extent of CoFund’ s pro rata interest
`
`in the Transaction.
`
`11.
`
`To perfect the aforesaid first priority security position in the Financing Documents,
`
`on January 23, 2012, CoFund filed a UCC financing statement with the Maryland Division of
`
`Assessments and Taxation. The filed financing statement described the covered collateral as “[a]ll
`
`right, title and interest of debtor, as lead lender, relating to or arising from extensions of credit by
`
`debtor to third—party borrowers from time to time, including, but not limited to, advances against the
`
`purchase price of accounts, but only to the extent of secured party’s pro rata interest as a participant
`
`
`
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 3 of 10 PageID: 3
`Case 2:16-cv-Ol790-SDW-LDW Document 1 Filed 03/31/16 Page 3 of 10 PageID: 3
`
`therein (if any) pursuant to that certain Master Participation Agreement between debtor and secured
`
`party dated January 12, 2012.”
`
`12.
`
`On or about December 5, 2014, Hitachi and Forest entered into a Loan and Security
`
`Agreement whereby Hitachi agreed to lend, and Forest agreed to borrow, moneys to fund Eligible
`
`Purchased Accounts as defined in the Loan and Security Agreement.
`
`13.
`
`To secure the timely repayment of the moneys, Forest granted to Hitachi a security
`
`interest in, and a lien on, the Collateral as defined in the Loan and Security Agreement.
`
`14.
`
`In paragraph 7.7 of the Loan and Security Agreement, Forest represented and
`
`warranted to Hitachi that the Collateral, as defined in the Loan and Security Agreement, “is not
`
`subject to any liens, mortgages, pledges, encumbrances, claims (legal or equitable), or charges of any
`
`kind except Permitted Encumbrances.” The only Permitted Encumbrance was the security interest
`
`held by CoFund.
`
`15.
`
`On December 16, 2014, Hitachi filed a UCC financing statement with the Maryland
`
`Department of Assessments and Taxation. The filed financing statement described the covered
`
`collateral as “all assets of debtor now owned or hereafter acquired.”
`
`16.
`
`On or about December 19, 2014, the Hitachi Business Finance Division of Hitachi
`
`and CoFund entered into a written Intercreditor Agreement (hereinafter “the Agreement”) whereby
`
`the parties agreed on the relative priority of each party’s security interest in the collateral covered
`
`by their respective agreements with Forest.
`
`17.
`
`According to the Agreement, “[t]he lien or security interest of any kind that CoFund
`
`‘ may now have or hold in the future with respect to the CoFund Priority Collateral [as defined in the
`
`Agreement] shall be superior to any lien or security interest that Hitachi may now have or hereafter
`
`
`
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 4 of 10 PageID: 4
`Case 2:16-cv-Ol790-SDW-LDW Document 1 Filed 03/31/16 Page 4 of 10 PageID: 4
`
`acquire in the CoFund Priority Collateral until CoFund terminates its UCC financing statement.
`
`18.
`
`In relevant part, Section 4 of the Agreement, entitled “Rights and Remedies”,
`
`provided as follows:
`
`Unless and until and indebtedness owing to Hitachi or CoFund has
`been satisfied in full and the applicable financial documents are
`terminated, Hitachi and CoFund agree that with respect to that
`collateral as to which it is an Inferior Creditor (“Collateral”) it will
`not:
`
`A.
`
`B.
`
`Enforce or seek to realize upon its security interest in or lien
`upon such Collateral;
`
`Interfere in any manner with the Superior Creditor’s (i)
`security interest or lien upon such Collateral or (ii) exclusive
`right and discretion, without consultation with or the consent
`of the Inferior Creditor, to enforce, foreclose, and otherwise
`
`realize upon such Collateral without regard to the interests of
`the Inferior Creditor and without any obligation to protect or
`preserve the value of such Collateral for such Inferior
`Creditor.
`
`C.
`
`Notify persons obligated, with respect to such Collateral, to
`remit same (including Proceeds arising there from) to the
`Inferior Creditor.
`
`If, notwithstanding the foregoing provisions of this Section 4, any
`party receives Collateral (including Proceeds) with respect to which
`it is an Inferior Creditor and there is unpaid Borrower indebtedness
`due to the Superior Creditor with respect to such Collateral, the
`Inferior Creditor receiving such Collateral shall be deemed to have
`received such Collateral (including Proceeds) for the use and benefit
`of the Superior Creditor and shall hold it
`in trust and shall
`immediately turn it over to the Superior Creditor to be applied upon
`the indebtedness of Borrower.
`
`Hitachi shall hold all funds representing CoFund Priority Collateral
`in trust for CoFund.
`
`19.
`
`Furthermore, on or about December 29, 2014, Manufacturers and Traders Trust
`
`
`
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 5 of 10 PageID: 5
`Case 2:16-cv-Ol790-SDW-LDW Document 1 Filed 03/31/16 , Page 5 of 10 PageID: 5
`
`Company (hereinafter “M&T”), Forest, and Hitachi entered into a Blocked Account Agreement
`
`(hereinafter “the BAA”). Forest deposited into the blocked account all moneys paid to it by its
`clients, and/or Forest’s clients deposited directly into the blocked account moneys that they owed
`
`to Forest.
`
`In both cases, some of the clients in question were clients with whom CoFund had a
`
`participation interest pursuant to the MPA.
`
`20.
`
`Under the terms of the BAA, Forest was not able to withdraw any moneys from the
`
`blocked account. Rather, in accordance with the BAA, M&T “transfer{red], by wire transfer, all
`
`available funds on deposit in the Blocked Account to the account of [Hitachi]” maintained at Bank
`
`of America in Chicago, Illinois.
`
`21.
`
`Hitachi has breached its obligations under the Agreement. Among other things,
`
`Hitachi has received CoFund Priority Collateral (including Proceeds), but has not turned the same
`
`over to CoFund. In addition, some of the moneys deposited into the blocked account represented
`
`moneys to which CoFund was entitled under its MPA with Forest, and some of the moneys that
`
`Hitachi transferred from the blocked account to its Bank of America account in Chicago represented
`
`moneys to which CoFund was entitled under its MPA with Forest.
`
`22.
`
`The indebtedness owing to CoFund has not been satisfied in full.
`
`23.
`
`As a result of Hitachi’s breach of its obligations to CoFund under the Agreement,
`
`CoFund has been damaged.
`
`WHEREFORE, CoFund II LLC demands judgment against defendant Hitachi Capital
`
`America Corp. for:
`
`a.
`
`An accounting of all moneys deposited into the blocked account that was the subject
`
`of the Blocked Account Agreement among M&T, Forest and Hitachi;
`
`
`
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 6 of 10 PageID: 6
`Case 2:16-cv-Ol790-SDW-LDW Document 1 Filed 03/31/16 Page 6 of 10 PageID: 6
`
`b.
`
`An accounting of all moneys transferred out of the blocked account
`
`that was the
`
`subject of the Blocked Account Agreement among M&T, Forest and Hitachi;
`
`c.
`
`An accounting of all moneys advanced by Hitachi to Forest and/or its clients under
`
`the Loan and Security Agreement between Hitachi and Forest;
`
`d.
`
`An accounting of all moneys received by Hitachi under the Loan and Security
`
`e.
`
`f.
`
`g.
`
`h.
`
`Agreement between Hitachi and Forest;
`
`Compensatory damages;
`
`Pre—judgment interest;
`
`Reasonable attorneys’ fees and expenses; and
`
`Costs of suit.
`
`SECOND COUNT
`
`24.
`
`CoFund repeats and makes a part hereof the allegations of the First Count as if the
`
`same were set forth at length herein.
`
`25.
`
`Hitachi was in a fiduciary relationship with CoFund.
`
`26.
`
`Hitachi owed a fiduciary duty to CoFund.
`
`27.
`
`Hitachi breached the fiduciary duty that it owed to CoFund.
`
`28.
`
`As a result of Hitachi’s breach of the fiduciary duty that it owed to CoFund, Cofund
`
`has been damaged.
`
`WHEREFORE, CoFund II LLC demands judgment against defendant Hitachi Capital
`
`America Corp. for:
`
`a.
`
`An accounting of all moneys deposited into the blocked account that was the subject
`
`of the Blocked Account Agreement among M&T, Forest and Hitachi;
`
`
`
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 7 of 10 PageID: 7
`Case 2:16-cv-Ol790-SDW-LDW Document 1 Filed 03/31/16 Page 7 of 10 PageID: 7
`
`b.
`
`An accounting of all moneys transferred out of the blocked account
`
`that was the
`
`subject of the Blocked Account Agreement among M&T, Forest and Hitachi;
`
`c.
`
`An accounting of all moneys advanced by Hitachi to Forest and/or its clients under
`
`the Loan and Security Agreement between Hitachi and Forest;
`
`d.
`
`An accounting of all moneys received by Hitachi under the Loan and Security
`
`e.
`
`f.
`
`g.
`
`h.
`
`i.
`
`Agreement between Hitachi and Forest;
`
`Compensatory damages;
`
`Punitive damages;
`
`Pre—judgment interest;
`
`Reasonable attorneys’ fees and expenses; and
`
`Costs of suit.
`
`THIRD COUNT
`
`29.
`
`CoFund repeats and makes a part hereof the allegations of the First Count and Second
`
`Count as if the same were set forth at length herein.
`
`30.
`
`Contrary to its Agreement with CoFund, Hitachi has enforced and/or sought to realize
`
`upon its security interest in, or lien upon, collateral as to which it is an Inferior Creditor, as defined
`
`in the Agreement.
`
`31.
`
`Contrary to its Agreement with CoFund, Hitachi has tortiously interfered with
`
`CoFund’s security interest or lien upon the CoFund Priority Collateral.
`
`32.
`
`As a result of Hitachi’s tortious interference, CoFund has been damaged.
`
`WHEREFORE, CoFund II LLC demands judgment against defendant Hitachi Capital
`
`America Corp. for:
`
`
`
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 8 of 10 PageID: 8
`Case 2:16-cv-Ol790-SDW-LDW Document 1 Filed 03/31/16 Page 8 of 10 PageID: 8
`
`a.
`
`An accounting of all moneys deposited into the blocked account that was the subject
`
`of the Blocked Account Agreement among M&T, Forest and Hitachi;
`
`b.
`
`An accounting of all moneys transferred out of the blocked account
`
`that was the
`
`subject of the Blocked Account Agreement among M&T, Forest and Hitachi;
`
`c.
`
`An accounting of all moneys advanced by Hitachi to Forest and/or its clients under
`
`the Loan and Security Agreement between Hitachi and Forest;
`
`d.
`
`An accounting of all moneys received by Hitachi under the Loan and Security
`
`e.
`
`f.
`
`g.
`
`h.
`
`i.
`
`Agreement between Hitachi and Forest;
`
`Compensatory damages;
`
`Punitive damages;
`
`Pre—judgment interest;
`
`Reasonable attorneys’ fees and expenses; and
`
`Costs of suit.
`
`FOURTH COUNT
`
`33.
`
`CoFund repeats and makes a part hereof the allegations of the First Count, Second
`
`Count, and Third Count as if the same were set forth at length herein.
`
`34.
`
`Hitachi has wrongfully exercised dominion and control over moneys belonging to
`
`CoFund without CoFund’s authorization and to the exclusion of CoFund’s rights in the moneys.
`
`35.
`
`CoFund has demanded that Hitachi turn over to CoFund the moneys that Hitachi has
`
`wrongfully converted, but Hitachi has refused, and continues to refuse, to do so.
`
`WHEREFORE, CoFund II LLC demands judgment against defendant Hitachi Capital
`
`America Corp. for:
`
`
`
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 9 of 10 PageID: 9
`Case 2:16-cv-Ol790-SDW-LDW Document 1 Filed 03/31/16 Page 9 of 10 PageID: 9
`
`a.
`
`An accounting of all moneys deposited into the blocked account that was the subject
`
`of the Blocked Account Agreement among M&T, Forest and Hitachi;
`
`b.
`
`An accounting of all moneys transferred out of the blocked account
`
`that was the
`
`subject of the Blocked Account Agreement among M&T, Forest and Hitachi;
`
`c.
`
`An accounting of all moneys advanced by Hitachi to Forest and/or its clients under
`
`the Loan and Security Agreement between Hitachi and Forest;
`
`d.
`
`An accounting of all moneys received by Hitachi under the Loan and Security
`
`e.
`
`f.
`
`g.
`
`h.
`
`i.
`
`Agreement between Hitachi and Forest;
`
`Compensatory damages;
`
`Punitive damages;
`
`Pre—judgment interest;
`
`Reasonable attorneys’ fees and expenses; and
`
`Costs of suit.
`
`FIFTH COUNT
`
`36.
`
`CoFund repeats and makes a part hereof the allegations of the First Count, Second
`
`Count, Third Count, and Fourth Count as if the same were set forth at length herein.
`
`37.
`
`By reason of Hitachi’s wrongful acts, Hitachi has been unjustly enriched.
`
`38.
`
`CoFund is entitled to the imposition of a constructive trust on the moneys that Hitachi
`
`wrongfully withheld from CoFund.
`
`WHEREFORE, CoFund H LLC demands judgment against defendant Hitachi Capital
`
`America Corp. for:
`
`a.
`
`The imposition of a constructive trust on all moneys that Hitachi wrongfully withheld
`
`
`
`Case 2:16-cv-01790-SDW-LDW Document 1 Filed 03/31/16 Page 10 of 10 PageID: 10
`Case 2:16-cv-Ol790-SDW-LDW Document 1 Filed 03/31/16 Page 10 of 10 PageID: 10
`
`from CoFund;
`
`b.
`
`An accounting of all moneys deposited into the blocked account that was the subject
`
`of the Blocked Account Agreement among M&T, Forest and Hitachi;
`
`c.
`
`An accounting of all moneys transferred out of the blocked account
`
`that was the
`
`subject of the Blocked Account Agreement among M&T, Forest and Hitachi;
`
`d.
`
`An accounting of all moneys advanced by Hitachi to Forest and/or its clients under
`
`the Loan and Security Agreement between Hitachi and Forest;
`
`e.
`
`An accounting of all moneys received by Hitachi under the Loan and Security
`
`Agreement between Hitachi and Forest;
`
`Compensatory damages;
`
`Punitive damages;
`
`Pre—judgment interest;
`
`Reasonable attorneys’ fees and expenses; and
`
`Costs of suit.
`
`f.
`
`g.
`
`h.
`
`i.
`
`j.
`
`LASSER HOCHMAN, LLC
`
`Attorneys for Plaintiff
`CoFund II LLC
`
`DATED:
`
`March 31, 2016
`
`By:
`
`5/ Richard L. Zucker
`RICHARD L. ZUCKER, ESQ.
`
`P:\Docs\SEC\RLZ\COFund II, LLC\CoFund II LLC vs. Hitachi Capital America Corp\Pleadings\Complaint.WPD
`
`10
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
