Guam Corporation v Long Term Credit Bank of Japan Ltd [1998] GUSC 5; 1998 Guam 06 (21 May 1998)

IN THE SUPREME COURT OF GUAM

EIE GUAM CORPORATION, et al. ) Supreme Court Case No. CVA96-017

) Superior Court Case No. CV1190-95

Plaintiff-Appellee, )

)

vs. )

)

THE LONG TERM CREDIT BANK, )

OF JAPAN, LTD., et al., )

)

Defendant-Appellant )

____________________________________) OPINION

)

THE LONG TERM CREDIT BANK, )

OF JAPAN, LTD., et al., )

)

Counterclaimant-Appellant, )

)

vs. )

)

EIE GUAM CORPORATION, et al. )

)

Counterdefendants-Appellees. )

____________________________________)

Filed May 21, 1998

Cite as: 1998 Guam 6

On Appeal from the Superior Court of Guam
Argued and Submitted on February 18,1998
Hågatña, Guam

Attorneys for Defendant-Appellant

G. Patrick Civille, Esq. (On the Brief)
CHING BOERTZEL CIVILLE
CALVO & TANG
A Professional Corporation
Suite 400, GCIC Building
414 West Soledad Avenue
Hågatña, Guam 96910

Jacqueline Aaron (Appearing at Oral Argument)
SHEARMAN & STERLING
777 South Figueroa Street, 34th Floor
Los Angeles, California 90017

Attorneys for Plaintiff-Appellee
David A. Mair (On the Brief) and John Spade (Appearing at Oral Argument)
MAIR, MAIR, SPADE & THOMPSON
A Professional Corporation
Attorneys at Law
Suite 807, GCIC Building
414 West Soledad Avenue
Hågatña, Guam 96910

Eduardo A. Calvo (On the Brief)
CALVO AND CLARK, Attorneys at Law
Suite 202, First Savings & Loan Building
655 South Marine Drive
Tamuning, Guam 96911

BEFORE: PETER C. SIGUENZA, Chief Justice, JANET HEALY WEEKS, and JOSE I. LEON GUERRERO, Associate Justices.

SIGUENZA, CJ.:

I. Background

[1] In the 1980's, Long Term Credit Bank of Japan (LTCB), a Japanese corporation, made loans to another Japanese corporation, EIE International (EIEI), in order to finance various construction projects. Consequently, EIE Guam (EIEG) was specifically incorporated to develop and hold the now Guam Hyatt Hotel.

[2] EIEI and EIEG initially invested $70 - $150 million to develop the construction project. As security for the loans, LTCB obtained a mortgage on the hotel as well as interests in the hotel=s equipment, accounts receivable, inventory, bank accounts, and contract rights. The loan transaction was made and approved in Japan, administered in Japan, and made payable in Japan. In 1992, an additional loan of $103 million was made directly to EIEG for purposes of completing the hotel. It is undisputed that this loan was also negotiated, approved, and executed in Japan and the amounts denominated in yen; nor is it disputed that performance, as well as the availability of the funds would be in Japan.

[3] On August 2, 1995, a suit arose over the loan agreements. LTCB and four other Japanese banks were named as defendants.[1] EIEG filed the complaint to set aside the mortgages and the other security interests, maintaining that the mortgages were fraudulently executed in favor of LTCB upon instruction of LTCB when it took over EIEI=