U.S. Bancorp Equipment Finance, Inc. v. Ameriquest Holdings LLC
United States District Court for the District of Minnesota
2004 WL 2801601
Ameriquest Holdings LLC (defendant) financed a Boeing 737 with a loan requiring quarterly payments and a final balloon payment, leasing the plane to U.S. Airways; after the September 11 attacks triggered a collapse in the airline industry and U.S. Airways' own bankruptcy, U.S. Airways terminated its lease and returned the plane, leaving Ameriquest unable to make its loan payments. U.S. Bancorp Equipment Finance (plaintiff), which had acquired the loan, foreclosed, sold the plane for a fraction of the outstanding balance, and sued Ameriquest for the roughly $3 million shortfall, moving for summary judgment after Ameriquest raised impossibility as a defense.
Whether, in New York, financial difficulty, including insolvency or bankruptcy, is insufficient to excuse a party's performance under the doctrine of impossibility.