Today in Torres v. The Steel Network, Inc., 2009 NCBC 19 (N.C. Super. Ct. July 27, 2009), the Business Court dismissed a tortious interference claim against Bank of America, ruling that the Bank couldn’t be sued under that theory for exercising its rights under its loan documents.
Plaintiff, a shareholder in the Defendant The Steel Network (TSN), had entered into an agreement to sell his minority interest to the Company for $4 million. The promissory note entered into in connection with the stock redemption called for payments to be made over a three year period.
Bank of America took the position that the the terms of the note violated debt service covenant ratios in its loan agreement with the Defendant. The Bank said it would call its loan to the company if the debt wasn’t subordinated or if the transaction wasn’t repudiated by TSN. TSN backed out of the deal with the Plaintiff before ever making a payment on the note. The Plaintiff then sued the Bank for tortious interference with contract.
Judge Jolly granted the Bank’s motion to dismiss, holding:
Here, the Complaint and its exhibits show that execution of the Note threatened to place TSN in violation of its pre-existing contractual covenants with the Bank. The documents of record also establish that the purported actions of the Bank were motivated by justifiable interests in protecting pre-existing legitimate contractual interests between TSN and the Bank, and that the Bank’s actions were proper and proportionate to the interests it sought to protect.
The Court held that boilerplate allegations that the Bank had acted "without justification" weren’t sufficient to get past a motion to dismiss, because the loan documents and other documents presented to the Court "support no conclusion other than that the Bank was acting pursuant to its contractual rights arising from its loan agreements with TSN."