The Electrical Industry Board of Nassau and Suffolk Counties, New York (EIB) (plaintiff) administered employee-benefit plans for an electrical-workers’ union. Elemco Testing Company, Inc., Elemco Electrical Construction Co., Inc., and Elemco Industries, Inc. (collectively Elemco) employed members of the union. The collective-bargaining agreement between Elemco and the union required Elemco to make payments to EIB to fund the employee-benefit programs and maintain a surety bond securing Elemco’s contributions. Elemco filed for bankruptcy in November 2008. On June 15, 2009, the bankruptcy court issued an order authorizing Elemco to borrow $50,000 pursuant to a letter of credit for EIB’s benefit. The order provided, among other things, that the letter of credit would terminate upon the sale of Elemco’s assets. Suffolk County National Bank (defendant) issued a letter of credit in EIB’s favor on September 4, 2009. The letter of credit provided that $50,000 would be payable upon presentation of the letter along with a sight draft and a final order from the bankruptcy court certifying that Elemco had failed to remit the funds due to EIB. The letter of credit stated that it expired on September 4, 2010. On September 1, 2010, EIB executive director John Gilday (plaintiff) presented the letter of credit to the bank with a signed sight draft and a bankruptcy-court order stating that Elemco had failed to satisfactorily remit the funds to EIB. The bank refused to pay, arguing that pursuant to the bankruptcy court’s June 2009 order, the letter of credit had terminated on May 13, 2010, when the bankruptcy court authorized Elemco to finalize a sale of their assets. Gilday and EIB sued the bank in New York state court to recover under the letter of credit. Gilday and EIB moved for summary judgment, but the trial court denied the motion. Gilday and EIB appealed to the Appellate Division of the New York Supreme Court.