A Delaware private depository company breached its contractual duties when it released millions of dollars of rare coins and bullion that were used as collateral for a loan provided by a New York bank to a California limited liability company, the Delaware Court of Chancery has ruled. The decision ends litigation between the two parties, which had moved through the Chancery Court since February 2012 and generated four pretrial opinions.
"I find that the depository breached the agreement by releasing collateral and interfering with the New York bank’s consent, inspection and removal rights," Vice Chancellor Donald F. Parsons Jr. said. "I also find that the affiliated debtor converted collateral by impermissibly possessing and disposing of collateral as if it were its own."
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