Lonely Maiden Productions v. Goldentree Asset Management

The primary question presented is whether a secured lender may foreclose on funds held by a payroll processing company and thereby defeat subsequent claims to those funds asserted by unsecured creditor employers who contend that the funds should have been used to meet the payroll processing company’s payroll obligations. The answer is yes when, as here, the funds paid by the unsecured creditor employers were not held in trust. Thus, the trial court properly denied the summary adjudication motion filed by the appellants 1 (collectively the film clients) as to whether *373 GoldenTree Asset Management, LP, and GTAM Special Realty, LLC (collectively GoldenTree), had a duty to refrain from foreclosing on funds held by Axium International, Inc., and its wholly owned subsidiaries (collectively Axium), and the trial court properly granted summary judgment in favor of GoldenTree with respect to the film clients’ causes of action for unjust enrichment and conversion. Consequently, the film clients’ attack on these rulings does not survive appellate scrutiny.

As a separate matter, the film clients argue that their fraud cause of action against GoldenTree should have survived…