Partial win in a suit for a penalty for breach of a PF financial advisory agreement for a real estate development project

A financial institution that had entered into a project financing (PF) financial advisory agreement for a large real estate development project filed suit against the developer and others, claiming a penalty for breach. Attorney Jaehoon Lee represented the financial institution in the suit.

The main issues were whether the developer had breached its exclusive financing arrangement obligation under the financial advisory agreement, whether the conditions for payment of the penalty had been met, and whether the penalty clause was enforceable. A further question was whether a newly established entity that had taken over the development project could also be held liable to pay the penalty.

Attorney Lee analyzed how the PF financial advisory agreement was concluded, its key provisions, and the financial institution's record of extending loans and performing financial advisory services. He also reviewed how the developer had obtained PF loans through another financial institution and the related evidence, and made legal arguments on liability to pay the penalty for breach of the exclusive financing arrangement obligation and on the liability of the newly established entity.

The court entered judgment partially granting the financial institution's claim for a penalty for breach.