Olshan Secures Appellate Victory for Client and Requires Enforcement of International Loan Agreement
In a Decision dated June 27, 2019, the First Department Appellate Division unanimously reversed the lower court’s trial decision and entered judgment in favor of Olshan’s clients to enforce an $8 million loan agreement and accompanying personal and corporate guarantees. The dispute arose from a loan provided in 2014 to individuals and entities based in the Caribbean in connection with a real property project. After the borrowers and guarantors defaulted on their obligations, the lender, Suttongate Holdings (“Suttongate”), asserted claims in New York Supreme Court in 2015. The defendants responded with counterclaims to set aside the transaction claiming fraud and other wrongs. After an eight day bench trial, the trial court found in favor of defendants and rescinded the loan agreement and guarantees. Olshan promptly filed an appeal and obtained a stay of the rescission order. The First Department reversed the trial court decision unanimously.
In ruling in favor of Olshan’s clients, the appellate court took the rare step of making its own fact-finding from the trial record to embrace Olshan’s arguments. The appellate court rejected the defendants’ defenses, including that they had no obligation to read the agreements they signed, found no breaches of fiduciary duties or fraud occurred, and even had such misconduct occurred, the lender should not suffer any consequences. After nearly four years of litigation, multiple injunctions and appeals, Suttongate is now entitled to recovery of all amounts due under the loan agreement and guarantees, which it estimated at trial total more than $16 million.
Olshan Litigation partner Thomas Fleming represented Suttongate in this matter.