Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Bostwick v. Credit Agricole Corp.

Supreme Court of New York, First Department

April 27, 2017

Dwight P. Bostwick, etc., Plaintiff-Appellant,
v.
Credit Agricole Corporate and Investment Bank New York Branch, formerly known as Calyon New York Branch, et al., Defendants-Respondents.

          Zuckerman Spaeder LLP, New York (Andrew N. Goldfarb of counsel), for appellant.

          White & Case LLP, New York (John Christopher Shore of counsel), for respondents.

          Tom, J.P., Moskowitz, Feinman, Gische, Kapnick, JJ.

         Judgment, Supreme Court, New York County (Barbara Jaffe, J.), entered September 28, 2016, dismissing the amended complaint, unanimously reversed, on the law, without costs, and the amended complaint reinstated to the extent indicated herein. Appeal from order, same court and Justice, entered on or about April 28, 2016, which granted defendants' motion to dismiss the amended complaint for failure to state a cause of action, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

         This action stems from defendants' conduct in a bankruptcy proceeding involving plaintiff's entities, which are the debtors in that proceeding. Plaintiff is the successor trustee of the GSC Liquidating Trust, which is composed of a group of affiliated entities (GSC entities), some of which borrowed substantial sums of money from lenders, including defendants, which held a minority position in the main secured loan. In order to secure the loan, the GSC entities pledged collateral composed of almost all of their assets, and entered into a credit agreement and a security agreement with the creditors; defendants are among the secured creditors.

         Section 6.1 of the security agreement states:

"[T]his Agreement may be enforced only by the action of the Collateral Agent... acting upon the instructions of the Required Banks [1]... [N]o other Secured Creditor [i.e., no Secured Creditor other than the Collateral Agent acting on the instructions of the Required Banks] shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby."

         Section 7.1(a) of the Security Agreement provides in pertinent part:

"Each Grantor [2]... agrees to (i) pay all reasonable out-of-pocket costs and expenses of the Collateral Agent and each other Secured Creditor in connection with the enforcement of this Agreement, and, after an Event of Default shall have occurred and be continuing, the protection of the rights of the Collateral Agent and each other Secured Creditor hereunder... and (ii)... indemnify... and hold the Collateral Agent [and] each other Secured Creditor... harmless from any and all liabilities, obligations, damages, ... claims, ... actions, suits, judgments and any and all costs, expenses or disbursements... of whatsoever kind and nature... in any way relating to or arising out of this Agreement... or any other document executed in connection herewith... or in any way connected with the administration of the transactions contemplated hereby... or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to or arising out of the... sale... or other disposition... of the Collateral...; provided that... no Secured Creditor... shall be indemnified... for losses, damages or liabilities to the extent caused by the bad faith... or willful misconduct of any such Indemnitee."

         In 2009 the GSC entities defaulted on the loan, and in 2010 they filed for bankruptcy. At the time the GSC entities filed for bankruptcy, the defendants as minority lenders acknowledged that any disputes they had with the majority lender - nonparty Black Diamond Capital Management, LLC - were intercreditor issues that did not belong in bankruptcy court (see In re GSC, Inc., 453 BR 132, 185 [Bankr S.D. NY 2011]).

         Following an unsuccessful attempt at reorganization, an auction of the assets was planned. The GSC entities and the collateral agent then agreed on bidding procedures for the auction that would allow for individual lenders to place bids. Defendants objected to the auction and bidding procedures and asked the bankruptcy court to delay the sale. Although the objections were ultimately resolved without court intervention after the parties engaged in discovery and negotiations, plaintiff alleges that defendants' objection caused them to incur substantial attorney and financial advisor fees.

         After the bankruptcy court approved the final bidding procedures, a financial advisor hired by the GSC entities determined that allowing certain bidders - especially Black Diamond and the collateral agent - to submit joint bids on the assets would provide for more competitive bids. At the same time, the advisor recognized that there was a risk that such a joint bid could result in the allocation of a greater percentage of assets to Black Diamond, which would be to defendants' detriment.

         For that reason, before the court permitted any such joint bids, the issue was discussed with defendants, who on October 27, 2010 executed a letter agreement consenting to the modification of the bidding procedures to include joint bidding. In the letter agreement, defendants reserved all claims and causes of action that they might have against the collateral agent and Black Diamond.

         On October 29, 2010, the GSC entities determined that the joint Black Diamond/collateral agent bid was the winning bid, as it ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.