Opinion ID: 612629
Heading Depth: 3
Heading Rank: 4

Heading: The March Forbearance Agreement

Text: On March 6, 2008, Wells Fargo lowered the multiplier on Interpharm's eligible inventory from 50% to 39.6%, ostensibly based upon the work of a third party vendor sent in by Wells Fargo to evaluate the liquidation value of the inventory. Compl. ¶ 61. Interpharm alleges that Wells Fargo's action was a material breach of the February Forbearance Agreement, and had the practical effect of reducing available credit below the amount Interpharm required to meet its obligations. In response to Interpharm's protests that it needed still more credit to operate, Wells Fargo proposed, and on March 25, 2008, the parties signed, yet another agreement (March Forbearance Agreement). Therein, Wells Fargo reiterated its promise to forbear pursuit of its existing default remedies through June 30, 2008, and temporarily raised the multiplier for credit calculation to 49% of inventory, though reserving the right to impose such lesser rate as Wells Fargo, in its sole discretion, deemed appropriate. Mar. Forbearance Agreement ¶ 14. In return, Interpharm reiterated its default status, agreed to higher fees, and released all claims against Wells Fargo arising prior to the date of the agreement.