One William Street Capital Management L.P. v. U.S. Education Loan Trust IV

Appellate Division of the Supreme Court of New York

One William Street Capital Management L.P. v. U.S. Education Loan Trust IV

116 A.D.3d 512, 986 N.Y.S.2d 21

CourtAppellate Division of the Supreme Court of the State of New York

DecidedApril 10, 2014

StatusPublished

This text of 116 A.D.3d 512 (One William Street Capital Management L.P. v. U.S. Education Loan Trust IV) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

One William Street Capital Management L.P. v. U.S. Education Loan Trust IV, 116 A.D.3d 512, 986 N.Y.S.2d 21 (N.Y. Ct. App. 2014).

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Opinion

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, iy 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 CPLR 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 Capital Mkts., LLC v Education Loan Trust IV, 87 A3d 632, 640-641 [Del Sup Ct 2014]). Respondent’s argument that petitioner is not a “Holder of any Note” with standing to sue under section 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 AD3d 557, 558 [1st Dept 2011]).

[513]*513We have considered cross-appellants’ remaining arguments and find them unavailing. Concur — Friedman, J.E, Moskowitz, Freedman, Gische and Clark, JJ.

Motion seeking leave to enlarge the record and file supplemental record granted. [Prior Case History: 2013 NY Slip Op 31977(U).]

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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, iy 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 CPLR 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 Capital Mkts., LLC v Education Loan Trust IV, 87 A3d 632, 640-641 [Del Sup Ct 2014]). Respondent’s argument that petitioner is not a “Holder of any Note” with standing to sue under section 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 AD3d 557, 558 [1st Dept 2011]).

[513]*513We have considered cross-appellants’ remaining arguments and find them unavailing. Concur — Friedman, J.E, Moskowitz, Freedman, Gische and Clark, JJ.

Motion seeking leave to enlarge the record and file supplemental record granted. [Prior Case History: 2013 NY Slip Op 31977(U).]

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116 A.D.3d 512, 986 N.Y.S.2d 21, Counsel Stack Legal Research, https://law.counselstack.com/opinion/one-william-street-capital-management-lp-v-us-education-loan-trust-iv-nyappdiv-2014.

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