Opinion ID: 1211144
Heading Depth: 2
Heading Rank: 2

Heading: Roslyn's Claim of Priority

Text: After the USPS terminated its contract with Abcon, the United States Fidelity and Guaranty Company (USF & G) paid claims in connection with various performance and/or payment bonds issued to Abcon and guaranteed by Michael Zenobia, Jr. (the President of Abcon) and his wife Theresa M. Zenobia (together, the Zenobias). After payment on these bonds, USF & G commenced an action in the United States District Court for the Eastern District of New York and obtained a judgment against Abcon, the Zenobias, and three related corporations for the amount of approximately $2 million (the USF & G Judgment). Roslyn, on or about March 12, 2002, agreed to loan Abcon, the Zenobias, and South Setauket Associates (SSA) (a partnership neither named nor liable under the USF & G Judgment) the sum of $2,000,000 (the 2002 Roslyn Loan) to be used to satisfy the USF & G Judgment. Approximately $1.7 million of that loan was used to satisfy the USF & G Judgment. Abcon Assocs., 2006 WL 3751261, at . Roslyn's extension of credit, viz. the 2002 Roslyn Loan, was secured in accordance with the provisions of three documents executed on March 12, 2002. Id. First, the Zenobias and SSA executed a Mortgage and Security Agreement (the Mortgage Agreement) to secure the 2002 Roslyn Loan with certain real estate. Second, the Zenobias, Abcon, and Roslyn executed a General Loan and Security Agreement (the Security Agreement) that granted to Roslyn, as collateral for the 2002 Roslyn Loan, [a]ll sums due [USF & G and/or Zenobias] received in action: USF & G v. ABCON Associates, Inc. Et al-USDC (Eastern District N.Y.) Case # 98-3826, and all sums recovered by [the Zenobias] from USPS relative to project Queens GMG-Dock Expansion, Three New Freight Elevators. Third, USF & G and Roslyn executed an assignment agreement (the Assignment Agreement), pursuant to which USF & G assigned to Roslyn all rights, title and interest of [USF & G] in, to and under (i) the judgment dated September 24, 2001 in favor of [USF & G] in an action pending in the United States District Court for the Eastern District of New York, Civil Action No. 98-3826 entitled United States Fidelity and Guaranty Company, Plaintiff, vs. Abcon Associates, Inc., Aurora Management, Inc., Redetech, Inc., A & D Group, Inc., Michael Zenobio, Jr. And Theresa Zenobio, Defendants (the Judgment); and (ii) all claims that [USF & G] may have as surety against the [USPS] for completion of the project known as the Queens GMG-Dock Expansion, Three Freight Elevators. In exchange, Roslyn agreed to wire funds in the sum of $1.7 million  the amount of the USF & G Judgment  plus interest and $10,000 in attorneys' fees, to USF & G. This payment constituted full satisfaction of the USF & G Judgment. In accordance with its security interests, on April 12, 2002, Roslyn filed a UCC-1 Financing Statement against the Debtors, Zenobia and Abcon, with the New York State Secretary of State. Id. That Financing Statement named as collateral: All sums recovered by Debtors (directly or through USF & G) from action USF & G v. Abcon Associates, Inc. et al. USDC (Eastern District NY) Case # 98-3826 and all sums recovered by Debtors (directly or through USF & G) from United States Postal Service relative to project Queens GMG-Dock Expansion, Three New Freight Elevators.