News & Events

Simpson Thacher successfully secured the dismissal of all claims filed against Citibank, N.A. in a putative class action of lessees of Commercial Money Center, Inc. (“CMC”). Plaintiffs asserted numerous claims revolving around the contention that their leases were really usurious loans charging rates of interest in excess of 40 percent. After a hearing on January 15, 2010, Judge Emilie H. Elias of the Los Angeles Superior Court granted Citibank’s demurrer in full, and denied Plaintiffs’ request for leave to amend as against Citibank. Leave to amend was allowed as to certain other defendants.

In prior litigation relating to Commercial Money Center, the Firm previously obtained judgment on the pleadings in favor of Citibank, requiring an insurer to pay to Citibank all obligations under its surety bond wrapping all lease obligations. The insurer had claimed that many of the leases were non-existent, as CMC was running a Ponzi scheme, and that the few leases that did exist were usurious loans unenforceable as a matter of law. Judge O’Malley of the United States District Court for the Northern District of Ohio held that all of these defenses were unavailing as a matter of law. The United States Court of Appeals for the Sixth Circuit affirmed the insurer’s liability.

George Wang, Andrew Brettler and former associate Allison Kimmel represented Citibank on the California litigation, with valuable assistance from paralegal Marisela Licerio.