Pryor Cashman has won dismissal of claims brought against client Hanover Community Bank by real-estate and investment group NCG Capital Partners LLC. The dispute in this action which is pending in N.Y. Supreme Court, N.Y. County, arose from a stock purchase agreement between Hanover and NCG. 

In early 2010, Hanover was seeking investors to help raise capital. Hanover executed a stock purchase agreement with NCG that required NCG to purchase Hanover stock in two separate transactions. NCG paid for and received stock in the first transaction but refused to consummate the second transaction. 

When Hanover sued NCG requesting a declaratory judgment that NCG anticipatorily repudiated the stock purchase agreement, NCG brought counterclaims against Hanover for breach of contract as well as a number of other fraud-related causes of action. NCG also brought a third-party complaint against Hanover and three individual members of Hanover’s board of directors stating fraud-related causes of action nearly identical to those stated in NCG’s counterclaims. 

In April 2011, Hanover moved to dismiss all of NCG’s fraud-related counterclaims. This motion was followed by a May 2011 motion in which Hanover sought to dismiss NCG’s entire third-party complaint. The motions were decided on March 21, 2012 in Hanover’s favor.

In her March 21, 2012 decision, N.Y. Supreme Court Justice Eileen Bransten adopted each of the arguments put forth by Pryor Cashman and found that NCG had failed to meet its pleading burden with respect to its fraud-related causes of action. The Court dismissed all of NCG’s fraud-related counterclaims and dismissed NCG’s third-party complaint in whole.   

Representing Hanover in the action are Partner James S. O’Brien, Jr. and associate Benjamin Akley, both members of Pryor Cashman’s Litigation and Financial Institutions Groups, and Pinchus D. Raice, Chairman of the Financial Institutions Group.

To read the decision in Hanover Community Bank v. NCG Capital Partners LLC in its entirety, please click here.