Csy Liquidating Corporation v. Harris Trust and Savings Bank

POSNER, Chief Judge.

Harris Bank issued an $8 million line of credit to CSY, a manufacturer of barges, on a secured basis. CSY defaulted, and Harris sold CSY’s promissory notes to Trinity, a competitor of CSY, for the full amount that CSY owed the bank. Trinity demanded payment from CSY and threatened to foreclose on the security if payment was not forthcoming. The demand and threat precipitated negotiations that ended in CSY’s selling its assets to Trinity. In this diversity suit against the bank, CSY (not the barge manufacturer, but the shell of CSY that remained after the assets were sold)…