Commercial Division Blog: Current Developments in the Commercial Divisions of the New York State Courts

On September 6, 2024, Justice Margaret A. Chan issued a Decision and Order in FTF Lending, LLC v. Mavrides, Moyal, Packman & Sadkin, LLP, Index No. 153620, denying both plaintiff’s and defendants’ motions for summary judgment. Plaintiff asserted claims against defendants for legal malpractice arising out of defendants’ representation of plaintiff in a loan transaction. The Court explained: Read More

On April 4, 2024, the Appellate Division, First Department, reversed a lower court decision to dismiss claims for malpractice and aiding and abetting fraud brought against an accounting firm despite evidence showing the accountants had disclosed the allegedly fraudulent transactions to the plaintiffs. In 1650 Broadway Associates, Inc., et al. v. Kenneth Strum, et al., Index No. 651690/2021, majority owners of the Manhattan 50s-themed Stardust Diner asserted claims against their former accountants after allegedly uncovering years of financial malfeasance by the diner’s minority owner and manager. The wrongdoing included taking unauthorized loans from the diner and forging one plaintiff’s signature on loan guarantees. The plaintiffs sued both the manager and the diner’s accounting firm, arguing the accountants knew of the fraudulent loans and breached their fiduciary duties by failing to alert them of the misconduct. Read More

In a Decision and Order, dated October 25, 2023, in Prospect Capital Corp. v. Morgan Lewis & Bockius LLP, Index No. 653941/2022, Justice Margaret A. Chan granted plaintiff’s motion for reargument and, upon reargument, denied defendant’s motion to dismiss. The case concerned plaintiff’s claim for legal malpractice in connection with services rendered by defendants while negotiating the terms of a subordinated debt agreement. The Court had previously granted defendants’ motion to dismiss due to failure to allege causation or damages. However, upon reargument, the Court explained: Read More