Can a buyer of a business and lease from a tenant also buy the letter of credit issued for the landlord's benefit?

Decision and Order -Only a letter of credit beneficiary can assign a letter of credit

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Plaintiffs purchased a business and a lease to the business premises from Seller. Plaintiff also paid Seller for a letter of credit which had been issued by a bank for the benefit of the Seller's landlord to assure that rent would be paid. However, the letter of credit was never transferred to the plaintiff. The court, interpreting "Uniform Customs and Practice for Documentary Credits (1993 REvision) International Chamber of Commerce Publication No. 500," to which the letter of credit, by its terms, was subject, and UCC provisions, held that the plaintiff did not receive a transfer of the letter of credit from the Seller, and would have had to receive such a transfer from the beneficiary of th eletter of credit, the landlord.

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Reference Info:Decision | State, 2nd Circuit, New York | United States


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Reuben Ortenberg, Woods Oviatt Gilman, LLP | Attorney Advertising

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