U.S. Bancorp Equipment Finance, Inc. v. Ameriquest Holdings LLC

2004 WL 2801601 (2004)

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Nature of the Case

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Facts

Gupta formed D. Gupta, and his brother-in-law are the sole shareholders of D. D purchased a Boeing 737 from Bank of America Leasing and Capital. The plane was leased to U.S. Airways under a lease scheduled to expire in April 2003. D borrowed $3,858,000 from Firstar Equipment Finance. D and Firstar entered into a Secured Loan Agreement which gave D a security interest in the airplane. The Agreement gave Firstar the right to repossess and sell the airplane in the event of default. The Agreement also required D to obtain written consent from Firstar before releasing the airplane. P acquired D’s loan from Firstar. US Airways filed for bankruptcy after 9-11. It terminated the lease with D and returned the airplane. D suggested to P that D re-lease the planes to overseas operators in countries including Pakistan, Nigeria, and Indonesia. P received an offer for Airplane, but D did not consent to the sale. D put together an investment group in an attempt to purchase the Airplane. D's final offer was for $300,000. P decided to foreclose and sell it through a private sale. It sold for $ 450,000. After the sales proceeds were applied the principal balance on the note $2,986,960.45, with $315,586.36 owed in interest. P motioned for summary judgment. D raised the defense of impossibility.