TRC Master Fund, LLC v AP Gas & Elec. (TX), LLC

TRC Master Fund, LLC v AP Gas & Elec. (TX), LLC 2019 NY Slip Op 06569 Decided on September 17, 2019 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on September 17, 2019
Friedman, J.P., Gische, Webber, Kahn, Oing, JJ.
9112 654968/16

[*1]TRC Master Fund, LLC, Plaintiff-Appellant,

v

AP Gas & Electric (TX), LLC, Defendant-Respondent.

Rubin LLC, New York (Paul A. Rubin of counsel), for appellant.

Bryan Cave Leighton Paisner LLP, New York (Thomas J. Schell of counsel), for respondent.

Order, Supreme Court, New York County (Nancy M. Bannon, J.), entered March 13, 2018, which granted defendant's motion to dismiss the complaint, unanimously reversed, on the law, without costs, and the motion denied.

Defendant's reading of the agreement, which the motion court accepted, requires a deviation from the express text, impermissibly rendering certain provisions without meaning or effect (see Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004]). Plaintiff purchased a claim that defendant made in a bankruptcy proceeding filed by a third party. The purchase agreement gives plaintiff the option of demanding immediate payment if at any time prior to emergence from bankruptcy or liquidation the claim becomes impaired. The bankruptcy trustee filed an objection to the claim, which it then withdrew 37 days later. The objection constitutes an impairment under the agreement, triggering plaintiff's right to demand immediate payment under the agreed-to formula, notwithstanding that the impairment was later removed. The complaint therefore states a valid cause of action and should be reinstated. As acknowledged by plaintiff, but disputed by defendant, upon repayment the claim would belong to defendant.

The Decision and Order of this Court entered herein on April 30, 2019 (171 AD3d 652 [1st Dept 2019]) is hereby recalled and vacated (see M-2854 decided simultaneously herewith).

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: SEPTEMBER 17, 2019

CLERK