General Electric Capital v. Bestway Tour & Travel

U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Contracts

New York Law Journal

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Judge Ronnie Abrams

Default judgment was entered for General Electric Capital (GEC) in its suit alleging Bestway Tour's and the Cheng defendants' failure to fulfill guaranties of Bestway Coach Express' obligations under leases with GEC-owned firms. GEC objected to a magistrate judge's report recommending it be awarded $249,114 plus interest. It asserted it was due another $220,049 because the report misread the payment history on a 2007 lease (Lease 1)—under which Bestway Tours was responsible under its continuing guaranty. It also claimed to be entitled to a terminal rental adjustment under a June 2001 lease (Lease 2). On de novo review the court awarded GEC the recommended $249,114 as well as an additional $167,148 in outstanding rent under Lease 1 and $52,901 for the rental adjustment under Lease 2. As to Lease 1—which renewed and consolidated four prior leases—the court found that those leases required that upon default Bestway Coach would be liable for the balance of remaining payments. Thus the amounts due from October 2008 until December 2009, totalling $167,148, were accelerated when Bestway Coach defaulted. Bestway Tour was jointly and severally liable with the Chengs for the entire amount of damages provided for under Lease 1.

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