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National Market Share, Inc. et al v. Sterling National Bank

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Can you imagine losing a law suit and breathing a sigh of relief? That's undoubtedly what happened when Sterling National Bank ("Sterling") lost in a suit brought by former loan clients in the U.S. District Court for the Southern District of New York. That court found that Sterling had breached its duty of good faith and fair dealing, but the plaintiffs had failed to show that the breach caused the demise of their business. The U.S. Court of Appeals for the Second Circuit affirmed that ruling, which awarded only $1 in damages, in its December 23, 2004, decision.

But there is an important lesson for lenders in this case that should cause them to think about promises made and broken

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