REPORTED DECISIONS

LG Funding, LLC v. Johnson & Son Locksmith, Inc., 170 A.D. 3d 1153, 96 N.Y.S. 3d 640, 2019 NY Slip Op 02330 (N.Y. App. Div., 2nd Dept., March 27, 2019)

The firm represented a funder in a merchant cash advance transaction. The merchant that was funded in the transaction defaulted on its agreement with the funder by refusing to turn over receivables that the funder had purchased. The funder sued the merchant and the guarantors of the agreement, and they counterclaimed arguing the transaction was an illegal usurious loan. The funder moved for summary judgment. The Supreme Court granted the motion but refused to award legal fees. The funder appealed. The Appellate Division reversed in favor of the firm’s client.

LG Funding LLC v. Nazy, 2019 NY Slip Op 30396(U) (N.Y. Sup. Ct., Nassau Co., February 14, 2019)

Nerayoff v. Khorshad, 2019 NY Slip Op 00290 (N.Y. App. Div., 2nd Dept., January 16, 2019)

The firm represented a defendant against whom a motion for summary judgment in lieu of complaint was made. The Supreme Court granted the motion even though it was only supported by an affirmation of an attorney without personal knowledge of the facts of the case instead of an affidavit by the plaintiff. The defendant appealed. The Appellate Division reversed in favor of the firm’s client.

LG Funding LLC v. City N. Grill Corp., 2018 NY Slip Op 33290(U) (N.Y. Sup. Ct., Nassau Co., December 14, 2018)

LG Funding, LLC v. Filton LLC, 2018 NY Slip Op 33289(U) (N.Y. Sup. Ct., Nassau Co., December 14, 2018)

LG Funding LLC v. Garber, 2018 NY Slip Op 33135(U) (N.Y. Sup. Ct., Nassau Co., December 4, 2018)

The firm represented a funder in a merchant cash advance transaction. The merchant that was funded in the transaction defaulted on its agreement with the funder by refusing to turn over receivables that the funder had purchased. The funder sued the guarantor of the agreement for breach of guaranty. The guarantor counterclaimed, alleging that the transaction was an illegal usurious loan. The funder moved to dismiss the counterclaim and for summary judgment on its breach of contract claim. Although the Supreme Court initially denied the motion, reargument was granted and the motion was granted in favor of the firm’s client.

Official Committee of Unsecured Creditors v. LG Funding, LLC (In re Cornerstone Tower Servs.), 2018 Bankr. LEXIS 3562 (Bankr. D. Neb., November 9, 2018)

The firm represented a funder in a merchant cash advance transaction. The merchant that was funded in the transaction filed for bankruptcy less than 90 days later. In the bankruptcy case, the unsecured creditors committee claimed that the payments the funder received under the transaction were preferential transfers and sued for their return. The funder defended itself arguing that the payments were made in the ordinary course of business and therefore did not have to be returned. The committee moved for summary judgment, arguing that the ordinary course of business defense could not be applicable because the transaction was a loan with an exorbitant rate of return. The Bankruptcy Court denied the motion in favor of the firm’s client.

LG Funding LLC v. Garber, 2018 NY Slip Op 32067(U) (N.Y. Sup. Ct., Nassau Co., August 20, 2018)

The firm represented a funder in a merchant cash advance transaction. The merchant that was funded in the transaction defaulted on its agreement with the funder by refusing to turn over receivables that the funder had purchased. The funder sued the guarantor of the agreement for breach of guaranty. The guarantor moved to change the venue of the case, arguing that Nassau County was not a proper venue. The funder opposed the motion, arguing that the agreement permitted the case to be filed in any court located in New York. The Supreme Court denied the motion in favor of the firm’s client.

Russell v. Pisana, 164 A.D. 3d 704, 83 N.Y.S. 3d 124, 2018 NY Slip Op 05789 (N.Y. App. Div., 2nd Dept., August 15, 2018)

Gene Rosen represented the purchaser of a home under a land sale contract. Under the contract, the purchaser paid the seller based on a schedule similar to that of a mortgage and would not receive a deed for the property until the contract would be paid in full. Even though the purchaser was making all payments due without default, the seller sued the purchaser for breach of contract, alleging the purchaser was using the property as a farm to grow marijuana. During the lawsuit, the purchaser stopped making payments under the land sale contract. The seller then made a motion for summary judgment against the purchaser even though the seller had not sued the purchaser on that basis, and the Supreme Court granted the motion. The purchaser appealed. The Appellate Division reversed in favor of Gene Rosen’s client, which prevented the purchaser from losing the property and hundreds of thousands of dollars paid under the land sale contract.

Gecker v. LG Funding, LLC (In re Hill), 589 B.R. 614, 66 Bankr. Ct. Dec. 65, (Bankr. N.D. Ill., August 15, 2018)

Gene Rosen represented a funder of merchant cash advance transactions. The merchant that was funded in the transactions filed for bankruptcy. In the bankruptcy case, the Trustee sued for the return of the payments the funder received under the transactions, alleging they were fraudulent transfers because the transactions were usurious loans and that they were also preferential transfers made in payment of debts during the 90 day period leading up to the debtor’s bankruptcy. The funder defended itself, arguing that the transactions were not loans, and since there could be no usury without a loan, the payments could not be deemed fraudulent transfers. The funder also argued that the payments were made in the ordinary course of business and therefore did not have to be returned. In a landmark decision for the Merchant Cash Advance industry, after a trial, the Bankruptcy Court dismissed all claims in favor of Gene Rosen’s client. This victory caused the settlement of numerous similar claims against other funders and has discouraged others against asserting similar claims against funders.

LG Funding, LLC v. City N. Grill Corp., 2018 NY Slip Op 30372(U) (N.Y. Sup. Ct., Nassau Co., February 26, 2018)

Gene Rosen represented a funder in a merchant cash advance transaction. The merchant that was funded in the transaction defaulted on its agreement with the funder by refusing to turn over receivables that the funder had purchased. The funder sued the merchant for breach of contract. The merchant counterclaimed, alleging that the transaction was an illegal usurious loan and that the officer who signed the agreement for the merchant was defrauded into believing that the agreement was a loan and not a sale of receivables. The funder moved to dismiss the counterclaims. The Supreme Court granted the motion in favor of Gene Rosen’s client. The Supreme Court later granted summary judgment in favor of Gene Rosen’s client.

LG Funding, LLC v. Balsamo, 2017 NY Slip Op 32686(U) (N.Y. Sup. Ct., Nassau Co., December 21, 2017)

Gene Rosen represented a funder in a merchant cash advance transaction. The merchant that was funded in the transaction defaulted on its agreement with the funder by refusing to turn over receivables that the funder had purchased. The funder sued the guarantors of the agreement for breach of guaranty. The guarantors counterclaimed, alleging that the transaction was an illegal usurious loan and that they were defrauded into believing that they would not be bound by the personal guaranty they signed. The funder moved to dismiss the counterclaims and for summary judgment on its breach of contract claim. The Supreme Court granted the motion in favor of Gene Rosen’s client.

LG Funding, LLC v. Grace Plastics, Inc., 2017 NY Slip Op 32750(U) (Sup. Ct., Nassau Co., December 17, 2017)

LG Funding, LLC v. Snowstar, Inc., 2017 NY Slip Op 32741(U) (Sup. Ct., Nassau Co., December 7, 2017)

LG Funding, LLC v. Christenbury Eye Ctr., P.A., 2017 NY Slip Op 32609(U) (N.Y. Sup. Ct., Nassau Co., December 7, 2017)

LG Funding, LLC v. Island Flavor, LLC, 2017 NYLJ LEXIS 3426 (N.Y. Sup. Ct., Nassau Co., November 21, 2017)

Gene Rosen represented a funder in a merchant cash advance transaction. The merchant that was funded in the transaction defaulted on its agreement with the funder by refusing to turn over receivables that the funder had purchased. The funder sued the merchant for breach of contract. The merchant counterclaimed, alleging that the transaction was an illegal usurious loan. The funder moved to dismiss the counterclaims and for summary judgment on its breach of contract claim. The Supreme Court granted the motion in favor of Gene Rosen’s client. Gene Rosen collected the entire judgment that was later entered in favor of his client.

LG Funding, LLC v. Branson Getaways, Inc., 2017 NY Slip Op 32387(U) (N.Y. Sup. Ct., Nassau Co., November 13, 2017)

Gene Rosen represented a funder in a merchant cash advance transaction. The merchant that was funded in the transaction defaulted on its agreement with the funder by refusing to turn over receivables that the funder had purchased. The funder sued the merchant for breach of contract. The funder obtained an order granting a default judgment. The merchant moved to vacate the default, alleging that the transaction was an illegal usurious loan and that some of the signatures for the merchant on the agreement were forgeries. The funder opposed the motion, arguing that the transaction was not a loan and that usury was therefore inapplicable and that the merchant was aware of all of the terms and conditions of the agreement and did not dispute the validity of the signatures on the first page incorporating them by reference. The Supreme Court denied the motion in favor of Gene Rosen’s client.

LG Funding, LLC v. Four Paws Orlando, LLC, 2017 NY Slip Op 32391(U) (N.Y. Sup. Ct., Nassau Co., November 9, 2017)

Russell v. Pisana, 2017 NY Slip Op 79593(U) (N.Y. App. Div., 2nd Dept., July 11, 2017)

Gene Rosen represented the purchaser of a home under a land sale contract. Under the contract, the purchaser paid the seller based on a schedule similar to that of a mortgage and would not receive a deed for the property until the contract would be paid in full. Even though the purchaser was making all payments due without default, the seller sued the purchaser for breach of contract, claiming the purchaser was using the property as a farm to grow marijuana. During the lawsuit, the purchaser stopped making payments under the land sale contract. The seller then made a motion for summary judgment against the purchaser even though the seller had not sued the purchaser on that basis, and the Supreme Court granted the motion. The purchaser appealed. The purchaser moved to extend the purchaser’s time to perfect the appeal. The Appellate Division granted the motion in favor of Gene Rosen’s client. The Appellate Division later reversed in favor of Gene Rosen’s client.

JSBarkats PLLC v. Response Scientific Inc., 149 A.D. 3d 652, 50 N.Y.S. 3d 873, 2017 NY Slip Op 03142 (N.Y. App. Div., 1st Dept., April 25, 2017)

Gene Rosen represented a law firm suing to collect fees it was owed by a company. The company had the removed from state court to federal court, claiming that there was diversity jurisdiction since the law firm and the company were from different states and the amount in controversy was over $75,000. The federal court later had the case remanded to state court upon finding there was no diversity. The law firm then moved for summary judgment, at which point the company moved to compel arbitration based on an arbitration clause their retainer agreement with the law firm. The motion was denied on the basis that the company waived its right to arbitrate by waiting to assert that right. The company appealed and the law firm opposed the appeal. The Appellate Division affirmed in favor of Gene Rosen’s client.

Summit Apparel, Inc. v. Promo Nation, Inc., 50 Misc. 3d 94, 25 N.Y.S. 3d 773, 2015 NY Slip Op 25397 (N.Y. App. Term, 2nd Dept., November 30, 2015)

Gene Rosen represented an apparel manufacturer. The manufacturer received a large order from a promoter. The manufacturer informed the promoter it could not fulfill the order immediately, and the promoter approved, requesting that the manufacturer deliver as much of the order as it could as soon as possible. The manufacturer made a large delivery immediately and completed the rest of the order within 90 days. The promoter refused to pay the final balance of the order. The manufacturer sued the promoter for breach of contract. The promoter counterclaimed, alleging that the late delivery of the order caused it to lose a major client and $750,000 in future profit. The manufacturer moved to dismiss the counterclaim and for summary judgment on its breach of contract claim. The Civil Court denied the motion, ruling that there was an issue of fact as to whether or not the lateness of the delivery was a breach of contract. The manufacturer appealed. The Appellate Term reversed on favor of Gene Rosen’s client. The case later settled in favor of Gene Rosen’s client.