Summary
permitting a non-party to a contract to cure its lack of contractual standing by adding the registered owners as "nominal petitioners"
Summary of this case from In re AXA Equitable Life Ins. Co.Opinion
2014-04-10
ONE WILLIAM STREET CAPITAL MANAGEMENT L.P., Petitioner–Appellant–Respondent, The Depository Trust Company, et al., Nominal Petitioners, v. U.S. EDUCATION LOAN TRUST IV, LLC, et al., Respondents–Respondents–Appellants, Education Loan Trust IV, et al., Respondents–Respondents.
Arnold & Porter LLP, New York (Kent A. Yalowitz of counsel), for appellant-respondent. Greenberg Traurig, LLP, New York (Eric N. Whitney of counsel), for respondents-appellants.
Arnold & Porter LLP, New York (Kent A. Yalowitz of counsel), for appellant-respondent.Greenberg Traurig, LLP, New York (Eric N. Whitney of counsel), for respondents-appellants.
, J.P., MOSKOWITZ, FREEDMAN, GISCHE, CLARK, JJ.
Order, Supreme Court, New York County (Eileen Bransten, J.), entered August 22, 2013, which, insofar as appealed from as limited by the briefs, granted petitioner's motion for leave to amend the petition, denied respondent U.S. Education Loan Trust, IV, LLC's (respondent) motion to dismiss the petition, and denied petitioner's motion for, in effect, summary judgment on its claim for unpaid principal and interest under the Article 77 petition, unanimously affirmed, without costs.
The amended petition adequately states a claim under the subject indenture and Fourth Supplemental Indenture (SI) for payment of principal and interest. We find that it is not clear on the face of the indenture and SI whether the key term “successful,” contained in SI § 2.01(a), includes an “All Hold” auction such as that held in this matter in June 2011. Accordingly, we find that issues of fact exist as to whether that auction was “successful” and, correspondingly, whether the trustee properly applied the “All Hold” interest rate subsequent to that auction. Issues of fact also exist as to whether petitioner has any present right of special redemption of the subject notes, since, among other things, special redemption would not apply if there is a finding that the interest rate was properly set at the All Hold Rate.
Petitioner's claims are not barred by the indenture's “No Action” clause ( see RBC Cap. Mkts., LLC v. Education Loan Trust IV, 87 A.3d 632, 639–41, 2014 WL 868668, *5–*6, 2014 Del. LEXIS 96, *17–*20 [Del.Sup.Ct.2014] ). Respondent's argument that petitioner is not a “Holder of any Note” with standing to sue under § 6.09 of the indenture lacks merit, since petitioner cured its lack of standing by adding the Depository Trust Company and Cede & Co. to this proceeding as nominal petitioners ( see Springwell Nav. Corp. v. Sanluis Corporacion, S.A., 81 A.D.3d 557, 558, 917 N.Y.S.2d 560 [1st Dept.2011] ).
We have considered cross-appellants' remaining arguments and find them unavailing.