1 No. 29
Bluebird Partners, L.P.,
Appellant,
v.
First Fidelity Bank, N.A., et al.,
Respondents, et al.,
Defendants. (And a third-party action.)
_________________________________________________________________
(And another action.)
_________________________________________________________________
2002 NY Int. 35
March 26, 2002
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
David M. Friedman, for appellant.
Marc Wolinsky, for respondents.
Oaktree Capital Management, LLC, et al.; American Bankers Association
et al., amici curić.
_________________________________________________________________
ROSENBLATT, J.:
This appeal involves the proper interpretation of General Obligations
Law § 13-107. That section provides that in the absence of an express
writing to the contrary, a bond transfer vests in the transferee
certain bond-related claims of the transferor, whether or not those
claims were known to exist at the time of transfer. The question
before us is whether, before pursuing any such claim, a
transferee-plaintiff must demonstrate its own injury in addition to
any harm the transferor sustained prior to the sale. Because the
Appellate Division erroneously inserted such a requirement into the
statute, we reverse and remit the matter for further proceedings
consistent with this Opinion.
I.
In March 1987, Continental Airlines and four defendant trustees
entered into a Secured Equipment Indenture and Lease Agreement,
pursuant to which Continental issued a $350 million debt offering
secured by collateral in the form of jet aircraft and spare engines.
The offering consisted of three series of certificates, with first
SNIPPETS:
That section provides that in the absence of an express writing to the contrary, a bond
The question before us is whether, before pursuing any such claim, a transferee-plaintiff
Because the Appellate Division erroneously inserted such a requirement into the statute, we
In March 1987, Continental Airlines and four defendant trustees entered into a Secured
The offering consisted of three series of certificates, with first series holders having
Continental filed for Chapter 11 bankruptcy protection.
In December 1991, Gabriel Capital, an investment- related limited partnership and predecessor
Further, between January 1994 and June 1996, Bluebird purchased an additional $301 million
In that complaint, brought in the United States District Court for the Southern District of
The court determined that Bluebird lacked standing to sue because, having acquired the bonds
Relying on GOL § 13-107, Bluebird asserted that the trustees' delay in moving for adequate
Supreme Court denied the motion, but the Appellate Division reversed on champerty grounds and
Based on the Appellate Division's decision, Supreme Court awarded summary judgment to the
Following our decision, Supreme Court granted Bluebird's motion for reargument and denied the
The court determined that because GOL § 13-107 requires that a transferee demonstrate its own
Contrary to the conclusion reached by the Appellate Division, neither the plain language nor
The wording of GOL § 13-107 makes it eminently clear that the buyer of a bond receives
Had the Legislature sought to impose on the buyer any precondition to suit it well could have
Given this history, we conclude that the Legislature intended that under GOL § 13-107
The Appellate Division did not address either of these arguments and we decline to decide
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