The plaintiff debtors brought a motion for leave to pay the full amount owing to the defendant creditor into court and for an order discharging the encumbrances held as security.
The creditor refused to accept payment unless it was provided with the source of the funds and an additional $500,000 for legal costs.
The court found the creditor's conditions unreasonable, noting that the funds were coming directly from a Schedule III bank and that the credit agreement did not entitle the creditor to costs for defending a breach of contract action brought by the debtors.
The motion was granted.
