Dark Forest Capital Mgt. LP v. Selina Hospitality PLC

2024 NY Slip Op 33465(U)

• Court: New York Supreme Court, New York County
• Decided: September 30, 2024
• Docket: Index No. 651303/2024
• Status: Unpublished

Opinion

Dark Forest Capital Mgt. LP v Selina Hospitality PLC 2024 NY Slip Op 33465(U) September 30, 2024 Supreme Court, New York County Docket Number: Index No. 651303/2024 Judge: Melissa A. Crane 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. 651303/2024 NYSCEF DOC. NO. 38 RECEIVED NYSCEF: 10/01/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. MELISSA A. CRANE PART 60M Justice ---------------------------X INDEX NO. 651303/2024 DARK FOREST CAPITAL MANAGEMENT LP MOTION DATE 03/11/2024 Plaintiff, MOTION SEQ. NO. 001 - V -

SELINA HOSPITALITY PLC, DECISION + ORDER ON MOTION Defendant. - - - - - -------------------------------------------X

The following e-filed documents, listed by NYSCEF document number (Motion 001) 1-8, 17, 18 were read on this motion to/for JUDGMENT - SUMMARY IN LIEU OF COMPLAINT.

Upon the foregoing documents, plaintiffs motion for summary judgment in lieu of

complaint is granted as set forth in this decision and order.

Plaintiff has established that service was proper. In addition, plaintiff has established

prima facie entitlement to judgment as a matter of law.

CPLR 3213 provides for accelerated judgment where the instrument at issue is for the

payment of money only and the right to payment is clear from the face of the document without

regard to extrinsic evidence, "other than simple proof of nonpayment or a similar de minimis

deviation from the face of the document" (Weissman v Sinorm Deli, Inc., 88 NY2d 437,444

[1996]; see Arbor-Myrtle Beach PE LLC v Frydman, 2021 NY Slip Op. 30223[U], 2 [Sup Ct,

NY County 2021], affd 2022 NY Slip Op. 00806 [1st Dept 2022]).

The same standards that apply to motions for summary judgment under CPLR 3212

apply to CPLR 3213 motions. Movant must make aprimafacie case by submitting the

instrument and evidence of the defendant's failure to make payments in accordance with the

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instrument's terms (see Weissman, 88 NY2d at 444; Matas v Alpargatas SA.IC, 274 AD2d

327, 328 [1st Dept 2000]).

Under the 2022 indenture, defendant "authorized the issuance of its 6.00% Convertible

Senior Notes due 2026 ... , initially in an aggregate principal amount at maturity not to exceed

$147,500,000" (see Doc 5 [Indenture], Doc 4 [Ireland aff.]). In 2024, defendant exchanged

$123. 7 million of the Notes for new securities, reducing the face value of the remaining original

Notes to $23,780,000 (see Doc 4 [Ireland aff.], Doc 8 [Form 6-K]). Plaintiff has established that

it owns 52% of the remaining original Notes in that it holds Notes amounting to $12,530,000 in

aggregate principal ([Doc 4, Doc 8]).

Under the indenture, the Notes mature on November 1, 2026. However, defendants are

required to pay 6% interest on the Notes in semi-annual payments (Doc 5 at pg 109). Plaintiff

alleges that defendant failed to make the scheduled interest payment due on November 1, 2023,

and have not paid, thereby triggering the acceleration clause in the notes. That is, a portion of the

outstanding principal ("Accreted Principal Amount") and interest become "due and payable

immediately" upon declaration by holders of at least "of at least 25% in aggregate principal

amount at maturity of the Notes then outstanding" (see Doc 5 [Indenture] §§ 6.0l(b), 6.02). On

February 2, 2024, plaintiff triggered the Notes' acceleration mechanism by written notice to

Defendant (Doc 7 [acceleration notice]).

Plaintiff contends that defendant owes it $11,4016,34.87 as of March 11, 2024 (Doc 4

[Ireland aft]). Plaintiffs CFO, Kelly Ireland, calculated that sum and states that it includes the

missed interest payment from 11/2023, the "accreted principal" amount as of the acceleration

date, and contractual interest.

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In opposition, Defendant does not dispute liability. Rather, defendant argues only that

plaintiff did not make its prima facie case by failing to explain its damages calculations

adequately. The Court disagrees.

Plaintiff has established its prima facie entitlement to relief under CPLR 3213. Plaintiff

has provided an affidavit from its Chief Financial Officer, Kelly Ireland, detailing the amount of

the Notes held by plaintiff and the circumstances of defendant's default. Additionally, plaintiff

submits the Indenture, a Brokerage Statement, the Acceleration Notice to defendant, as well as

defendant's SCC Form 6-K in which defendant admits failure to make the November 2023

interest payment. Plaintiff demonstrates that the amounts defendant owes are calculable pursuant

to the terms of the Indenture, Brokerage Statement, and Ireland Affidavit.

Thus, plaintiff has established that defendant defaulted under the Indenture and owes

plaintiff the Accelerated Amount of $10,949,244.86 and the missed interest payment in the

amount of $375,000. In addition, plaintiff is entitled to default interest at the contractual rate of

6% per annum on both the missed interest payment from November 1,2023 and on the "accreted

principal" amounts from February 2, 2024 [the acceleration date].

The court has considered the parties' remaining contentions and finds them unavailing.

Accordingly, it is

ORDERED that the motion for summary judgment in lieu of complaint is granted, and

the Clerk is directed to enter judgment in favor of plaintiff and against defendant in the amount

of $11,4016,34.87, together with pre-judgment interest at the contractual rate of 6% per annum

from March at the contractual rate of 6% from November 16, 2022 until the date of this decision

and order, and thereafter at the statutory rate, as calculated by the Clerk, together with costs and

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disbursements to be taxed by the Clerk upon submission of an appropriate bill of costs; and it is

further

ORDERED that the motion for summary judgment in lieu of complaint is granted and the

Clerk is directed to enter judgment in favor of plaintiff and against defendant in the amount of

$10,949244.86 at the contractual rate of 6% from March 12, 2024 until entry of judgment, and

thereafter at the statutory rate, as calculated by the Clerk, together with costs and disbursements

to be taxed by the Clerk upon submission of an appropriate bill of costs; and it is further

ORDERED that the Clerk is directed to mark this case disposed.

9/30/2024 DATE

~ CHECK ONE; CASE DISPOSED NON-Fl~AL DISPOSITION

GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION; SETTLE ORDER SUBMIT ORDER

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

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