BFAM Asian Opportunities Master Fund, LP v. Zhongrong Intl. Resources Co., Ltd.

2025 NY Slip Op 30464(U)

• Court: New York Supreme Court, New York County
• Decided: February 3, 2025
• Docket: Index No. 654192/2022
• Status: Unpublished

Opinion

BFAM Asian Opportunities Master Fund, LP v Zhongrong Intl. Resources Co., Ltd. 2025 NY Slip Op 30464(U) February 3, 2025 Supreme Court, New York County Docket Number: Index No. 654192/2022 Judge: Joel M. Cohen Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 654192/2022 NYSCEF DOC. NO. 216 RECEIVED NYSCEF: 02/03/2025

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 03M -----------------------------------------------------------------------------------X BFAM ASIAN OPPORTUNITIES MASTER FUND, LP, INDEX NO. 654192/2022

Plaintiff, MOTION DATE 12/27/2024 -v- MOTION SEQ. NO. 010 ZHONGRONG INTERNATIONAL RESOURCES CO., LTD., ZHONGRONG XINDA GROUP CO., LTD., LUCKYWAY CREATION LIMITED, CHOICE SUCCESS DECISION + ORDER ON GLOBAL LIMITED, ERA NOVA DEVELOPMENT S.A. MOTION Defendants. -----------------------------------------------------------------------------------X

HON. JOEL M. COHEN:

The following e-filed documents, listed by NYSCEF document number (Motion 010) 195, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 212, 213, 214, 215 were read on this motion for DEFAULT JUDGMENT .

Plaintiff BFAM Asian Opportunities Master Fund, LP (“Plaintiff”) moves for a Default

Judgment Against Defendants Zhongrong Xinda Group Co., Ltd., and Era Nova Development

S.A. (the “Non-Appearing Defendants”), pursuant to CPLR 3215, awarding money damages in

the amount of (i) the unpaid principal of US $139,806,000.00; (ii) two outstanding accrued

interest payments, each in the amount of US $5,067,967.50, owed on April 26, 2020, and

October 26, 2020, under the Indenture and Accompanying Zhongrong International Resources

Co., Ltd. Global Note (Oct. 26, 2017) (NYSCEF 152), which total US $10,135,935.00; and (iii)

prejudgment simple interest on the unpaid principal of US $139,806,000.00, running from the

October 26, 2020 maturity date at 9% per annum pursuant to CPLR 5001 and 5004. The Non-

Appearing Defendants have not appeared or opposed this motion. For the following reasons,

Plaintiff’s motion is granted.

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Under CPLR 3215(f), “[a] party seeking a default judgment must submit proof of service

of the summons and the complaint and ‘proof of the facts constituting the claim, the default and

the amount due’” (Bigio v Gooding, 213 AD3d 480, 481 [1st Dept 2023], quoting CPLR 3215

[f]).

Zhongrong Xinda and Era Nova were served with the Summons and Complaint when

Plaintiff served those papers on their designated agent for service of process, Law Debenture

Corporate Services Inc. (“Law Debenture”), in November 2022.1 Defendants agreed to maintain

Law Debenture as their agent for any service related to the Notes “[a]s long as any of the Notes

remain outstanding.” (NYSCEF 199 [“Indenture”] § 12.07(c)). The Notes remain “outstanding”

to this day pursuant to the definition of that term at Section 1.01 of the Indenture because

Defendants have failed to pay Plaintiff principal and interest due under the Notes. The Non-

Appearing Defendants’ failure to maintain Law Debenture as their agent does not render service

ineffectual (see Gryphon Dom. VI, LLC v APP Intern. Fin. Co., B.V., 41 AD3d 25, 33 [1st Dept

2007] [“In the indenture, the defendants agreed to accept service made on CT Corp. Although

the defendants apparently terminated CT Corp. at some point before the plaintiffs served the

1 The Court previously deferred deciding whether such service was effective (see NYSCEF 115 [Decision and Order dated August 8, 2023 (“MTD Decision”)] at 3) and instead granted Plaintiff several extensions of the service deadline to try to serve the Non-Appearing Defendants through the applicable international service treaties (see, e.g., NYSCEF 185 [Decision and Order dated July 31, 2024 (“Fourth Extension Order”)]). Recently, however, in Zhang Rui Kang v. Zhongrong International Resources Co., Ltd., No. 654526/2024 (“Zhang”)—a parallel action brought by a different noteholder of the same Notes as at issue in this case—this Court granted a motion for summary judgment in lieu of complaint against Zhongrong Xinda and Era Nova, finding that they had effectively been served through service on Law Debenture (Kang v. Zhongrong Intern. Resources Co., Ltd., 2024 NY Slip Op 34294[U], 2 [Sup Ct, NY County 2024]). As the same holds true here, the Court likewise finds that Zhongrong Xinda and Era Nova were effectively served the Summons and Complaint in this action in November 2022.

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turnover motion, the court below properly found that this termination was ineffective because the

defendants neither gave prior written notice to the trustee that they were terminating CT Corp.

nor appointed another agent for service of process in New York”]).

As to proof of the facts constituting the claim and the amount due, Plaintiff has satisfied

its burden under CPLR 3215(f). First, the Court has already determined via its Decision and

Order dated July 31, 2024 that the Indenture and Notes are an enforceable contract (see NYSCEF

183 [Decision and Order dated July 31, 2024 (“MSJ Decision”)] at 2-3). Second, this Court has

likewise already determined via its MSJ Decision that Plaintiff has performed and complied with

the Indenture and Notes (see id.). Third, Plaintiff has established that the Non-Appearing

Defendants are in breach of their obligation to pay Plaintiff principal and interested due pursuant

to the Indenture and Notes, and that this failure has damaged Plaintiff (see NYSCEF 204

[“Gilain-Huneeus Aff.”] ¶¶ 40-44).

As to damages, Plaintiff has demonstrated that it has been damaged in the amount of (i)

the unpaid principal of US $139,806,000.00; (ii) two outstanding accrued interest payments, each

in the amount of US $5,067,967.50, owed on April 26, 2020, and October 26, 2020, under the

Indenture and Accompanying Zhongrong International Resources Co., Ltd. Global Note (Oct.

26, 2017) (NYSCEF 199), which total US $10,135,935.00; and (iii) prejudgment interest on the

unpaid principal of US $139,806,000.00 running from the October 26, 2020 maturity date at 9%

per annum pursuant to CPLR 5001 and 5004 (see Gilain-Huneeus Aff., ¶¶ 40-44).

The Non-Appearing Defendants may seek a vacatur of the instant default judgment if

they can satisfy the requirements of CPLR § 5015, CPLR § 317, or any other relevant law.

Therefore, it is:

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ORDERED that Plaintiff’s Motion for a Default Judgment against the Non-Appearing

Defendants is GRANTED, and upon submission of a judgment by Plaintiff in the appropriate

form, the Clerk shall enter judgment in favor of Plaintiff against the Non-Appearing Defendants

for (i) the unpaid principal of US $139,806,000.00; (ii) two outstanding accrued interest

payments, each in the amount of US $5,067,967.50, owed on April 26, 2020, and October 26,

2020, under the Indenture and Accompanying Global Note, which total US $10,135,935.00; and

(iii) prejudgment interest on the unpaid principal of US $139,806,000.00, running from the

October 26, 2020 maturity date at 9% per annum pursuant to CPLR 5001 and 5004, along with

costs and disbursements, as calculated by the County Clerk; it is further

ORDERED that Plaintiff’s counsel shall serve a copy of this order with notice of entry

on the Non-Appearing Defendants within five (5) days from the date of this Order.

2/3/2025 DATE JOEL M. COHEN, J.S.C. CHECK ONE: X CASE DISPOSED NON-FINAL DISPOSITION

□ X GRANTED DENIED GRANTED IN PART OTHER

APPLICATION: SETTLE ORDER SUBMIT ORDER

□ CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE

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