New York State Court of Appeals – Breach of Contract: BDC Finance LLC v. Barclays Bank

New York State Court of Appeals – Breach of Contract – Contract Interpretation – Summary Judgment

BDC Finance LLC v. Barclays Bank

No. 5

Judge Pigott

Background: The action arises out of a contract dispute between a major global bank based in the United Kingdom and a Connecticut-based hedge fund. Under the agreements at issue, each party had the right to demand collateral from the other party based on changes in the value of underlying debt instruments. A master agreement contained a “delivery of collateral” clause that provided that the defendant was to transfer any “return amount” no later than the business day following the business day on which the plaintiff requested the transfer of such return amount.

Ruling: The Court of Appeals held that material issues of fact exist as to whether the defendant defaulted under the parties’ contract. Therefore, neither party is entitled to summary judgment. The Court of Appeals found that there was a question in regards to whether the defendant complied with an undisputed amount provision. The record reflected that the parties spoke with one another about the dispute. The defendant transferred $5 million to the plaintiff. However, it is not clear whether the defendant reduced the amount of its collateral call by $80,000.

Jeffrey T. Scott for the appellant; Craig A. Newman for the respondent