Cases and Deals

Blank Rome Secures Unanimous Reversal in NY Supreme Court Appellate Division for Winston Salem RI LLC

A Blank Rome team successfully secured a unanimous reversal before the New York Supreme Court’s Appellate Division, First Department, on behalf of Winston Salem RI LLC (“WSRI”). The final opinion was delivered on June 20, 2023.

In the second of two commercial cases filed in New York County, WSRI asserted derivative claims for breach of contract against a lender for monetary damages, alleging that the lender improperly demanded and received forbearance payments, wrongly declared defaults, and foreclosed on hotel properties located in North Carolina and Indiana. In the first case involving a separate hotel property located in California, the Court ruled in Blank Rome’s client’s favor, reinstating similar claims against the same lender. See Ladder Capital Fin. LLC v 1250 N. SD Mezz LLC, 211 AD3d 608, 609 (1st Dept 2022). In the instant case involving parallel but unique issues, WSRI argued not only that the lender’s conduct constituted a breach of the loan agreement, but that the claims asserted in the complaint were procedurally and substantively proper. After consideration of the papers and oral argument, the Appellate Division unanimously ruled in WSRI’s favor. In doing so, the Court rejected respondent’s arguments.

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 John KesslerHirsh Cogan and Judith Gische also assisted in this matter.

As noted above, in December 2022, Arash Beral obtained a similar out-of-state appellate court reversal in New York on behalf of client 1250 North SD Mezz LLC (Blank Rome Secures Unanimous Reversal in NY Supreme Court Appellate Division for 1250 North SD Mezz LLC) and 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 (Blank Rome Secures Unanimous Reversal in TX Court of Appeals Fraud Lawsuit for TBS Business Solutions USA, Inc. and CEO Tewodros “Teddy” Sahilu).