Cases and Deals

Blank Rome Secures Unanimous Reversal in NY Supreme Court Appellate Division for 1250 North SD Mezz LLC

A Blank Rome team successfully secured a unanimous reversal before the New York Supreme Court’s Appellate Division, First Department, on behalf of 1250 North SD Mezz LLC (“1250 Mezz”). The final opinion was delivered on December 22, 2022.

In a commercial dispute filed in New York County, 1250 Mezz asserted a claim for breach of contract against a lender for monetary damages, alleging that the lender improperly declared a default, accelerated the subject loan, and foreclosed on a hotel securing the loan based on an alleged prohibited transfer (the transfer of membership interests within the organizational structure of the borrower’s minority ownership group, layers removed from the borrower).

1250 Mezz argued, among other things, that the transfer did not involve a prohibited transfer by a “Restricted Party” under the loan agreement and, moreover, that the lender’s declaration of default was improper and constituted a breach of the loan agreement.  After the trial court dismissed the claim based on the loan agreement’s limitation of remedies provision, which precluded monetary damages for claims that the lender “acted unreasonably or unreasonably delayed acting,” the Blank Rome team appealed. The appellant’s briefing and oral argument ultimately proved successful as the Appellate Division unanimously reversed the trial court’s order, finding that the claim was beyond the scope of the limitations of remedies provision.

The Blank Rome team was led by Los Angeles-based partner, Arash Beral, who argued before the New York Appellate Division, with significant support from Hirsh Cogan, John Kessler, and Craig Haring.

In September 2022, Arash Beral obtained another out-of-state appellate court reversal (in Texas) on behalf of clients TBS Business Solutions USA, Inc. and Tewodros “Teddy” Sahilu. For more information, please read Blank Rome Secures Unanimous Reversal in TX Court of Appeals Fraud Lawsuit for TBS Business Solutions USA, Inc. and CEO Tewodros “Teddy” Sahilu.