Morrison Cohen Defeats Summary Judgment on Convertible Note Claim

Morrison Cohen Partners Christopher Milito and Y. David Scharf, along with Associate Collin A. Rose defeated a lender’s attempt at accelerated judgment on an asset-backed loan that was convertible to equity.  

The lender attempted to use a provision of procedural law that permits creditors to avoid a full lawsuit and move directly to judgment on loan claims.  The Firm opposed that attempt on the grounds that the convertible nature of the loan made the accelerated judgment procedure inapplicable.  The New York State Supreme Court agreed and denied the lender’s motion, finding that an issue of fact arose as to the conversion of debt to equity.  

The court’s decision highlights the importance of procedural proficiency in protecting a client’s substantive rights.   

The case is Heshy Gottdiener v. Acier Holdings, LLC, et al., in the Supreme Court of the State of New York, County of Kings.