Court Opinion

ID: 3365338
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:07:09.664993+00
Date Added: 2024-06-11T13:51:52.925755
License: Public Domain

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]
MEMORANDUM OF DECISION RE: RENEWED MOTION FOR SUMMARY JUDGMENT
The present action involves a claim by the plaintiff to obtain payment of two notes executed by the defendant constituting the balance of the purchase price under an asset purchase agreement by which the defendant acquired the assets of a corporation from the plaintiff. The notes in issue are subordinated, by their terms, to "senior indebtedness" which is defined as indebtedness "incurred in connection with the buyers acquisition of substantially all of the assets of the seller."  The notes in question also provide that if any senior indebtedness is in default, then payment of the sums due to the plaintiff need not be made.
The plaintiff has filed a Renewed Motion for Summary Judgment and has submitted documentation indicating that third-party indebtedness was incurred by the defendant to provide funds for working capital and to cover losses expected during the first six months of operation. The plaintiff therefore asserts that such uses are not related to the acquisition of the assets and therefore do not constitute senior indebtedness. The plaintiff has also submitted documentation indicating that the third-party indebtedness incurred by the defendant is not in default. The plaintiff therefore claims to be entitled to summary judgment, on if the grounds that the notes payable to it have not been paid; that senior indebtedness does not exist; and that senior indebtedness, CT Page 11757 if it exists, is not in default.
The defendant has submitted documentation indicating that the third-party indebtedness was utilized to pay pre-closing costs including costs of a contested FCC hearing, and for other acquisition costs. The defendant has also submitted documentation indicating that the third-party indebtedness was in default and that default had not been waived by the defendant.
Under such circumstances a question of fact exists as to whether or not the "senior indebtedness" exists and, if so, whether it is in default.
Accordingly, the Renewed Motion for Summary Judgment is hereby denied.
RUSH, J.