Defendant acquired the stock in 1995, at which time he was a director of City Mortgage Corp. Ltd., a wholly owned British subsidiary of Cityscape. He claims that plaintiff told him that the sale of the shares was restricted under Rule 144 of the Securities and Exchange Commission. At the time that defendant executed the loan documents, he also executed and delivered to plaintiff a form of stock power which, he contends, enabled plaintiff to sell the stock without the need for defendant to execute additional forms. Plaintiff said that it would send the necessary forms. Defendant also considered purchasing a put option, exercisable in December 1997 when the shares would be free of the Rule 144 restrictions, but learned that such an option would be prohibitively expensive.
Defendant argues that plaintiff acted negligently in failing to safeguard the collateral.
Plaintiff disputes the veracity of defendant's allegations. Plaintiff alleges that, contrary to defendant's assertion, defendant urged the bank not to sell to sell the collateral as he searched for ways to avoid paying British capital gains taxes that would attend such a sale. Further, he had wanted to meet with plaintiff in November to discuss the sale of the stock. Here, however, defendant is not disputing the existence of the loan. Instead, the parties' conflicting assertions raise issues about the disposition of the collateral and the various instructions relating to the same, that can not be resolved on these papers.