The opinion of the court was delivered by: Judge Robert M. Dow, Jr.
MEMORANDUM OPINION AND ORDER
Before the Court is Third Party Defendant Rally Capital Services' ("Rally" or "Third Party Defendant") motion for summary judgment  on Count I of Third Party Plaintiff William Pearson's ("Pearson") and Argus Industries' ("Argus") (collectively, "Third Party Plaintiffs") Fourth Amended Third Party Complaint. For the following reasons, the motion  is granted.
On September 15, 2010, Third Party Defendant filed its initial motion to dismiss all of Third Party Plaintiffs' claims . The Court granted this motion in part , ruling that while there was insufficient evidence under the Fed. R. Civ. P. 9(b) heightened pleading requirements to support Third Party Plaintiffs' allegations of a sham auction and fraud prior to the actual sale, the allegations of post-sale conduct were sufficient to state a claim for breach of fiduciary duty [144 at 17-18].
On January 25, 2011, Third Party Defendant filed a motion for summary judgment on Third Party Plaintiffs' remaining claims . After Third Party Plaintiffs failed to reply to this motion by March 7, 2011, Third Party Defendant filed a motion for decision with respect to the motion for summary judgment . Third Party Defendant took the position that Third Party Plaintiffs' failure to respond to the summary judgment motion within the time period provided by the Federal Rules should be deemed a forfeiture of the opportunity to respond and the Court should proceed to decision on the motion without the benefit of a brief from Third Party Plaintiffs.
The Court rejected that contention and directed the parties to submit a joint status report with a proposed schedule for any discovery required by Third Party Plaintiffs prior to responding to Third Party Defendant's summary judgment motion. The parties submitted an agreed schedule pursuant to which Third Party Plaintiffs would provide their response by May 27, 2011.
Third Party Plaintiffs failed to meet this deadline. It was not until June 17, 2011 that Third Party Plaintiffs filed a motion requesting an extension , claiming that they failed to meet the deadline because counsel had been preparing for an oral argument and the client was behind on payment. The Court denied the motion , noting that Third Party Plaintiff already had been granted several extensions over the course of this litigation and finding that Third Party Plaintiffs' excuses for not seeking the extension until weeks after missing the deadline were not compelling. Thus, in deciding whether to grant summary judgment, the Court considers only Third Party Defendant's initial motion for summary judgment  and Third Party Defendant's reply in support of its motion .
Third Party Plaintiff Argus Industries, Inc. was an Illinois corporation that manufactured, imported and distributed digital cameras. Third Party Plaintiff William Pearson served as president and sole owner of Argus. In 2002, Third Party Plaintiff Argus obtained several loans, including $3,000,000 from Sequel Capital, LLC ("Sequel") and $1,300,000 from J.P. Morgan Chase & Co. ("Chase"). Both loans were secured by a security interest in a designated portion of Argus' camera inventory. Chase and Sequel agreed that Sequel had a priority position over Chase with respect to Argus' inventory [144 at 3]. In November 2002, after Office Max cancelled a camera order, Argus was forced to default on its loans with Chase and Sequel. Chase then sought immediate repayment from Argus, but Argus lacked the funds to pay [144 at 3].
In May 2003, a representative from Chase introduced Pearson to Anthony Graffia, Sr. and Anthony Graffia, Jr. ("the Graffias"), who claimed that their company, Hartford Computer Group, Inc. ("Hartford"), had sufficient funds to float Argus' need for capital to repay its loans [144 at 3]. Through Chase and the Graffias, Pearson was introduced to James Zec and Howard Samuels of Rally Capital ("the Rally Defendants"), who emphasized their company's experience as a trustee of distressed business [144 at 4]. The Rally Defendants initiated discussion of the possibility that Hartford would acquire Argus' assets, and then Rally would use the proceeds from this assignment to pay back Argus' creditors [144 at 4].
As a result of this discussion, on June 18, 2003 Argus and Zec entered into a Trust Agreement and Assignment for the benefit of creditors [173 at 2]. Under this agreement, Zec was to serve as assignee/trustee of Argus' assets [144 at 4]. On June 27, 2003, Zec and Hartford entered into an Agreement and Bill of Sale, under which Hartford agreed to purchase, subject to competitive bidding, Argus' assets [173 at 2]. Zec and Hartford also entered into a Collection Agreement, whereby if Hartford was the successful bidder it would be responsible for collecting all but two of Argus' accounts receivable (excluding a receivable from OfficeMax that was the subject of an ongoing lawsuit and a receivable from Walmart/WIP Marketing/Lancelot PO Financings) [173 at 3]. However, on July 15, 2003, after undertaking due diligence, Hartford took the position that the value of Argus' assets was substantially less than the sale price previously agreed upon [173 at 3]. As a result of this revelation, Zec agreed, after obtaining the permission of Argus' creditors, to sell the assets to Hartford at a substantially reduced price [173 at 3]. On July 15, 2003, Sequel and Hartford also reached an agreement, under which Hartford agreed to attempt to collect the OfficeMax receivable that was the subject of ongoing litigation [173 at 3].
In the months following the Argus sale, Zec's health worsened and eventually Samuels agreed to become the Acting Assignee for Argus [173 at 4]. It also became apparent that Argus' Accounts Receivable had been substantially overstated, to the point where Sequel might not be able to fully recover the funds it was owed [173 at 4]. As a result of that development, in fall of 2003, Harvey Kinzelberg ("Kinzelberg"), the principal of Sequel, requested that Samuels dramatically reduce his involvement, in favor of saving administrative costs by allowing Hartford and Sequel to communicate directly with regards to the sale of Argus' inventory and collection of Accounts Receivable [173 at 4]. This agreement effectively placed Sequel in control of the collection of the Accounts Receivable [173 at 5]. The overstatement of the Accounts Receivable also prompted an additional agreement between the parties on December 31, 2003. Under that agreement, Samuels formally acknowledged that he would not be paid by Hartford, as provided under the sale agreement, and that the unsecured creditors would not obtain any recovery [173 at 5-6]. Subsequently, Sequel demanded that Samuels pay them substantially all of the remaining funds that resulting from the Argus Assignment that he had under his control-a total of $93,000 [173 at 6].
In June 2004, the OfficeMax litigation settled. Pursuant to the July 15, 2003 agreement, Hartford exercised control over the settlement [173 at 6]. Finally, in October 2004, Hartford and Sequel entered into an Assignment and General Release, under which Sequel released Hartford from its obligations, including the ...