Recent News-Memorandum Opinion & Order
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
vs.
KANAN FASHIONS, INC., CREATIVE
WAREHOUSING (Chicago), LLC, KANAN
CRUISES, INC., KANAN HOLDINGS, LLC,
VARSHA SHAH, and MEHUL SHAH,
Defendants.
10 C 331
Judge Feinerman
Plaintiff United Central Bank ("United") brought this action against four entities-Kanan
Fashions, Inc. ("Fashions"), Creative Warehousing (Chicago), LLC ("Creative"), Kanan Cruises, Inc. ("Cruises"), and Kanan Holdings, LLC ("Holdings")-and two individuals-Varsha Shah and Mehul Shah-alleging breach of contract and replevin. The case concerns four loans issued by United's predecessor, Mutual Bank, to the entity defendants (collectively, "Borrowers"). Loan No. 1, for $26.5 million, was made to Fashions on June 26, 2006, for the purpose of maintaining working capital. Loan No. 2, for $591,000, was made to Creative and Fashions on June 23, 2004, for the purpose of building out Creative's warehouse. Loan No. 3, for $1,776,000, was made to Creative and Fashions on June 23, 2004, for the purpose of purchasing equipment for Creative's warehouse. Loan No. 4, for $2,320,000, was made to Holdings and Cruises on March 8, 2005, for the purpose of funding the purchase of a cruise ship.
Count I of the complaint alleges that the Borrowers" defaulted on the loans by failing to
make payments when due. The answer admits that the Borrowers failed to make payments on Loan Nos. 2-4, but as an affirmative defense alleges that United materially breached its
obligations under Loan No. 1, thereby excusing the Borrowers' alleged default on Loan Nos. 2-4. The Borrowers also brought counterclaims, including for United's alleged breach of Loan No.1. United has moved under Fed. R. Civ. P. 12(c) for partial judgment on the pleadings on Count I, solely as it pertains to Loan Nos. 2-4, and on the counterclaims. Defendants since have voluntarily dismissed their counterclaims, so all that remains of United's motion is the request for partial judgment on Count I.
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