Global Resources has filed a lawsuit over a stalled rail scrap
deal with two South Korean steel companies.
The Henderson, Nev.-based
commodities trader filed a breach-of-contract lawsuit in
Cameron County District Court in Texas against Shinjeong Steel
& Trading Co. and its chief executive officer, Sang Don
Lee, and Jangsoo Iron & Steel Co. Ltd. and its chief
executive officer, Chang Ho Kwun.
The Industrial Bank of Korea
(IBK) and branch manager Won Seob Byeon also are being sued for
allegedly conspiring to stop the deal by canceling a letter of
credit and failing to issue a new one, court documents
The lawsuit says that after
receiving a letter of credit in August for $1,185,000 from IBK,
Franklins office in Brownsville, Texas, contracted to
sell 3,000 tonnes of used rail scrap to Shinjeong. The material
was sourced in South America and was to be shipped in
containers to a port in South Korea at $395 per tonne
Franklin alleges that the
defendants worked together to cancel the order after the buyers
were able to get more competitively priced scrap from one of
Franklins competitors, which was not named.
"IBK willfully and intentionally
aided the defendant to breach and violate the provisions of the
contract," says the lawsuit, claiming that IBK knowingly aided
the defendants to breach and violate the contract by pulling
the letter of credit and not reissuing a new letter of credit,
stating afterward that the deal had been canceled.
Franklin is asking the court to
award $1,325,000the amount of the canceled letter of
credit, plus interestas well as court fees.
None of the parties could be
reached for comment.