## Facts

- ABN AMRO Bank N.V. participated in two related financing transactions involving timberland collateral owned by Pioneer Resources, LLC.
- A $270 million “Replacement Credit Facility” (Senior Loan) was made to Pioneer under a senior credit agreement with ABN and other lenders.
- A separate $35 million bridge loan facility (Bridge Loan) was made to Strategic Timber Trust II, LLC to fund fees tied to an acquisition of an interest in Pioneer by a related entity.
- The collateral for both loans consisted of Pioneer’s timberland and timber inventory in multiple states.
- ABN served as syndication agent for the Senior Loan and administrative agent for the Bridge Loan, including collecting funds from lenders, disbursing proceeds to the borrower, and determining satisfaction of conditions precedent to closing.
- P.T. Bank Central Asia, New York Branch invested $1 million as a participation in the transaction and alleged ABN induced the investment through fraudulent misrepresentation and concealment.
- PT alleged ABN affirmatively represented that the collateral value exceeded $1 million while knowing the collateral was overstated and withholding material adverse information about the collateral’s true value and related risks.
- ABN moved to dismiss under CPLR 3211, arguing PT failed to plead fraud with particularity under CPLR 3016(b); the trial court dismissed the complaint.
- PT appealed.

## Issues

1. Whether PT’s allegations of fraudulent misrepresentation and fraudulent concealment were pleaded with sufficient particularity under CPLR 3016(b) to survive a CPLR 3211 motion to dismiss.
2. Whether PT was required, at the pleading stage, to specify when and how ABN learned the collateral’s appraised value was overstated.

## Decision

- The Appellate Division, First Department modified the dismissal order.
- The court denied the motion to dismiss as to the causes of action for fraudulent misrepresentation and fraudulent concealment, reinstating those claims.
- The court otherwise affirmed dismissal of PT’s remaining claims.

## Legal Principles

- CPLR 3016(b) requires that “the circumstances constituting the wrong” in a fraud claim be stated in detail.
- The statute requires particularized allegations of the core fraud circumstances (e.g., the alleged misstatements or omissions, their context, and reliance), but not full evidentiary detail at the pleading stage.
- Where facts bearing on scienter and internal knowledge are primarily within a defendant’s possession, a plaintiff need not plead the evidentiary path by which the defendant acquired that knowledge.
- Fraud may be pleaded through affirmative misrepresentations and through material omissions where a duty to disclose is plausibly alleged (including based on superior knowledge and a transactional role that implies access to material information).

## Conclusion

The court held that PT’s complaint sufficiently stated the circumstances of the alleged fraud to satisfy CPLR 3016(b) and reinstated PT’s fraudulent misrepresentation and concealment claims, while leaving the dismissal of other claims in place.


P.T. Bank Cent. Asia, N.Y. Branch v. ABN AMRO Bank N.V., 301 A.D.2d 373, 754 N.Y.S.2d 245 (1st Dep’t 2003)