Opinion ID: 1388000
Heading Depth: 3
Heading Rank: 1

Heading: SCR's Arguments Based on Contractual Language

Text: SCR argues that the remainder of section 2.4(a) [3] nonetheless permits it to bring this suit. But the proviso contained in that section applies only to the Citibank Carve-Out Note, the Summitbridge Carve-Out Note or the Citibank Short Fall Note, not the New Subordinated A Note or the New Subordinated B Note at issue. Section 2.6(b) of the Subordination Agreement provides that the rights and interests ... hereunder ... shall remain in full force and effect irrespective of ... any ... defense available to ... Borrower. Subordination Agreement, § 2.6(b) (emphasis added). SCR argues that this section permits it to assert its claim under the subordinated notes because it establishes that the Subordination Agreement does not provide a defense for the Warshawskys or limit the rights of SCR. Appellee Br. 20. But the provision refers only to the rights and interests under the Subordination Agreement. The Warshawskys are not asserting that the rights thereunder are not in full force and effect. They insist only that these rights not be expanded to permit collection of the junior debt before the senior debt has fully been paid. [4]