CNH Diversified Opportunities won a significant victory in October 2020 when the Court of Appeals for the State of New York reversed a grant of summary judgment previously awarded to defendant Cleveland Unlimited, instead granting partial summary judgment to Faegre Drinker client CNH and affirming their right to pursue a judgment for payment of principal and interest despite majority noteholders’ directed foreclosure.
The Court of Appeals held that CNH’s payment rights were not extinguished by a strict foreclosure undertaken by the indenture trustee, which purportedly cancelled their notes, because the purported cancellation of the notes absent dissenting minority note holders’ consent had “impermissibly terminated” the right to payment without their consent.
The case is CNH Diversified Opportunities Master Account, L.P. v. Cleveland Unlimited, Inc. (2020 NY Slip Op 05976)
