Summary Judgment Granted Plaintiff For Fees Due On Contract To Provide Investment Banking Services

On December 2, 2024, Justice Andrew Borrok granted summary judgment to plaintiff in a contractual dispute seeking payment of fees for services in brokering a loan. The case is Manorhaven Capital LLC v. Marc J. Bern & Partners, LLP, Index No. 654869/2022.

Defendant (Bern) did not dispute that it had a contract to pay plaintiff (Mahorhaven) a percentage of any loan received from, among others, non-party D.E. Shaw during a defined period, or that D.E. Shaw advanced $233,265,817.04 to or on behalf of Bern during that period. Bern rather argued that: 1) Manorhaven had forfeited its right to a fee because it failed to follow up sufficiently after D.E. Shaw had initially declined the loan and the loan had been resurrected through subsequent communications between Bern and D.E. Shaw independent of Manorhaven, and 2) any fee found to be due should be limited to the $44,480,353.72 that D.E. Shaw sent directly to Bern, and should not include amounts that D.E. Shaw sent to Bern’s third party creditors. Justice Borrok rejected both arguments.

As to the first, “Bern is simply not correct that Manorhaven had continuing obligations to hound D.E. Shaw after D.E. Shaw initially indicated that it was not interested in doing the deal with Bern and that Manorhaven was required to provide continual updates as to these efforts without notice from Bern that D.E. Shaw had reengaged with them during the tail period of the Agreement.” Slip op, p. 7. That the loan occurred during the contract period was sufficient.

Defendant’s second argument fared no better: “Bern's proffered interpretation is both at odds with the Credit Agreement which indicates that the advances are ‘to the Borrower’ (NYSCEF Doc. No. 180, § 2. l[a][i]) and otherwise would produce obvious absurd results - i.e., Bern could direct the entire proceeds of $250 million be sent to others including as prepayment for new obligations and no fee would be due under the Agreement.” Id., pp. 8-9 (footnote omitted.)

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning loan brokerage or other contractual business litigation.