Opinion ID: 1142705
Heading Depth: 3
Heading Rank: 2

Heading: Jess Bigelow Letter of Credit

Text: Jess Bigelow was a longstanding customer of the Branch with a favorable loan repayment history. In early 1984, Bigelow organized the Visitors' Information Center and planned to build informational booths along the routes leading to the Louisiana World's Fair. Bigelow sought financing for his venture through Walter E. Heller & Company. Heller required that Bigelow provide security in the form of a $100,000.00 letter of credit issued by an acceptable banking institution. Bigelow turned to Gray and asked that the Branch provide his security. On January 23, 1984, Gray issued a BOM letter of credit in Heller's favor and in the amount of $100,000.00, good for one year, taking in turn no collateral or security therefor. [3] As fate would have it, Visitors' Information succeeded no better than the Fair itself. Bigelow began missing his monthly payments to Heller, and Heller threatened demand on the letter of credit. To forestall Heller, Gray, now acting through USB, began a series of loans to Bigelow. By January of 1985, Gray had made Bigelow new USB unsecured loans aggregating $61,857.40, much of which had been sent to Heller. On or about January 12, 1985, some ten days before the BOM letter expired, Gray issued a new USB $100,000.00 letter of credit to Heller for Bigelow's benefit. Gray had authority from USB to make unsecured loans not in excess of $75,000.00. He sought no approval before giving the new letter of credit. Heller subsequently called the new letter of credit, forcing USB to pay the $100,000.00. USB obtained an unsecured note from Bigelow in exchange for payment to Heller, but Bigelow defaulted. USB elected to sue Bigelow and obtain a default judgment to pursue collection, but without success.