You are here: / / THE ACTION BY PLAINTIFF SELLER TO RECOVER ON A SECURITY INTEREST IN COLLATERAL...
, ,

THE ACTION BY PLAINTIFF SELLER TO RECOVER ON A SECURITY INTEREST IN COLLATERAL FOR A LOAN TAKEN OUT BY THE BUYER AS CONSIDERATION FOR THE PURCHASE BARRED BY THE STANDSTILL AGREEMENT WHICH ASSIGNED PRIORITY TO TWO OTHER SECURITY INTERESTS (FIRST DEPT).

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Manzanet-Daniels, determined the language of a so-called standstill provision barred the action by plaintiff Intrepid seeking to recover a security interest in collateral for the $28.7 million loan taken out by the buyer, Selling Source, as consideration for the purchase. Plaintiff was a third priority lender and the standstill agreement provided plaintiff could not seek a remedy until payment was made to the first and second priority lenders:

… Selling Source agreed to acquire a number of Internet businesses from plaintiff Intrepid. In partial consideration, Selling Source executed a $28.7 million junior secured promissory note … . …

In connection with the transaction, the parties executed an intercreditor and subordination agreement (ICA) delineating the priority of each party’s security interest in the collateral pledged by the guarantors. Plaintiff, as the “third priority representative” of the “third priority lenders,” received third priority liens as security for the repayment of the $28.7 million note … .

The ICA contains standstill provisions that circumscribe Intrepid’s ability to exercise its remedies in the event of a default by Selling Source, providing, inter alia, that “[n]o Third Priority Lender shall commence or exercise any Remedies in respect of any default or event of default. . . until such time as the Payment-in-Full of the First Priority Obligations and Second Priority Obligations” … . * * *

This action is barred by the plain language of the standstill provision, which states that “[n]o Third Priority Lender shall commence or exercise any Remedies in respect of any default or event of default . . . until such time as the Payment-in-Full of the First Priority Obligations and Second Priority Obligations” … . Intrepid Invs., LLC v Selling Source, LLC, 2023 NY Slip Op 00396, First Dept 1-31-23

Practice Point: Here priority was assigned to those holding security interests in collateral for a loan taken out by the buyer as consideration for the purchase. The plaintiff seller was a third priority lender. The seller’s action to recover on its security interest was barred by standstill agreement which did not allow the seller to seek a remedy until the payment of the first and second priority lenders.

 

 

You might also like
BECAUSE THE DEFENDANT EMPLOYER SUFFERED NO DAMAGE AS A RESULT OF PLAINTIFF’S BREACH OF THE CONFIDENTIALITY PROVISION OF THE EMPLOYMENT CONTRACT, DEFENDANT EMPLOYER WAS NOT ENTITLED TO ENFORCEMENT OF THE LIQUIDATED DAMAGES PROVISION IN THE CONTRACT; PLAINTIFF’S BREACH-OF-AN-ORAL-CONTRACT CAUSE OF ACTION SHOULD NOT HAVE BEEN DISMISSED BECAUSE PLAINTIFF SUBMITTED EVIDENCE OF PARTIAL PERFORMANCE BY DEFENDANT AND PLAINTIFF’S RELIANCE ON THE ORAL MODIFICATION (FIRST DEPT).
OWNER PROPERLY FOUND RESPONSIBLE FOR REFUNDING OVERCHARGES COLLECTED BY THE PRIME TENANT WHICH HAD CREATED AN ILLUSORY TENANCY TO CIRCUMVENT THE NYC RENT STABILIZATION LAW (FIRST DEPT).
DEFENDANT’S OFFER TO PROVIDE FALSE TESTIMONY IN A SEPARATE ACTION IS NOT PROTECTED BY THE LITIGATION PRIVILEGE IN THIS RELATED ACTION ALLEGING DEFENDANT’S BREACHED A CONFIDENTIALITY AND NONDISPARAGEMENT AGREEMENT (FIRST DEPT). ​
Impeachment of Defendant With a Statement Made by Defendant’s Attorney Deemed Proper
Elements of Several Computer Crimes Described
Forum Non Conveniens Doctrine Applied
A PORTION OF THE NYC CHARTER WHICH ALLOWS UNLIMITED SEARCHES OF PAWNBROKERS, THEIR PERSONNEL, PREMISES, MERCHANDISE AND PAPERS IS UNCONSTITUTIONAL; THE UNDERLYING REGULATORY SCHEMES ADDRESSING REPORTING REQUIREMENTS AND INSPECTIONS ARE NOT UNCONSTITUTIONAL (FIRST DEPT).
THE ARRESTING DETECTIVE SHOULD NOT HAVE BEEN ALLOWED TO IDENTIFY THE PERSON DEPICTED IN SURVEILLANCE VIDEOS AS THE DEFENDANT, NEW TRIAL ORDERED (FIRST DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

DEFENDANT MANUFACTURED VALVES CONTAINING ASBESTOS; ALTHOUGH DEFENDANT HAD A... THE BANK IN THIS FORECLOSURE ACTION DID NOT SUBMIT SUFFICIENT PROOF OF STANDING...