Court Opinion

ID: 5830657
Source: CourtListenerOpinion
Date Created: 2022-01-12 22:17:26.656545+00
Date Added: 2024-06-11T08:43:26.797333
License: Public Domain

Catterson, J.,
dissents in a memorandum as follows: In my view, the undisputed facts in the record demonstrate that Capmark did nothing more in the transaction at issue than restructure the bridge loan to extend the maturity date. This restructuring, rather than repayment, granted various lenders a secured position in exchange for the bulk of the unsecured bridge loan. Therefore, I am compelled to dissent and would grant summary judgment to Credit Suisse.
The record sets out what the majority and the court below overlooked in denying summary judgment, the context of the transaction documents. Plaintiff and the majority rely on the expressions “cash” and “repayment” in the 2009 bridge loan agreement and amendment No. 9 to find an issue of fact. However, as set out below, it is plain that there was no payment in cash to Credit Suisse and the purpose of the transaction was simply an exchange of debt.
Initially, I note that all of the restructuring documents relied on by plaintiff and referenced by the majority only describe obligations of the parties going forward. None of the documents reflect actual events that occurred in the performance of the re*566structuring. Credit Suisse’s obligation to make a cash distribution to Sumitomo would only be triggered by the threshold events. Capmark must necessarily have made a cash payment of $562,500,000 to Citibank, and Citibank actually made a corresponding cash payment to Credit Suisse. The record contains no evidence whatsoever that any cash payment migrated from Capmark to Citibank and then on to Credit Suisse.
I agree with the majority that we must consider “the substance of the entire transaction, rather than its form.” (Chemical Bank v Meltzer, 93 NY2d 296, 302 [1999].) In Chemical Bank, the Court further cautioned that we must not “focus on a few words of a single instrument [; the] transaction must be analyzed as an integrated whole.” (93 NY2d at 304.) We must not “elevate form over substance, obfuscate the nature of [the parties’] legal obligations and gloss over the essential character of th[e] transaction.” (Id.) In this case, the “essential character” of the transaction was to substitute secured debt for unsecured debt. This is made clear by repeated references in the 2009 agreement to refinancing the bridge loan. Furthermore, the notices from Capmark to Citibank and from Citibank to Credit Suisse document the “reallocation” and/or “roll up” of the bridge loan in secured debt. The notices do not refer to a repayment to Credit Suisse of the bridge loan debt.
The participation agreement is clear at sections 1.1 and 5 that Credit Suisse is only obligated to deliver to Sumitomo its share of any distribution “[u]pon receipt” by Credit Suisse. Thus, Sumitomo was only entitled to its ratable share of any cash actually received by Credit Suisse.
In my view, Sumitomo has presented no evidence whatsoever that refutes the notifications from Capmark to Citibank and from Citibank to Credit Suisse that show that the bridge loan debt was not repaid but rather “reallocated]” or “roll[ed] up” into secured debt. Mere allegations that Credit Suisse received a cash distribution via setoff are insufficient to defeat Credit Suisse’s motion for summary judgment.