News & Events

On February 10, 2014, Simpson Thacher received the decision of the Supreme Court of the State of New York, New York County, dismissing a complaint against TD Bank, NA.  In 2008, TD Bank and other lenders participated in a $200 million transaction with Bionol Clearfield, LLC to finance an ethanol plant in Pennsylvania.  After Bionol filed for bankruptcy in July 2011, OppenheimerFunds Inc., a purchaser of bonds issued in connection with the financing, filed a complaint against TD Bank and the other lenders.  Oppenheimer alleged that the financing contracts contained an error regarding the priority of payment for different tranches of the loan in the event of bankruptcy – the loan documents provided that Oppenheimer was subordinated to the other lenders and Oppenheimer believed it should be paid on a pro rata basis. 

TD Bank filed a motion to dismiss, arguing (1) that Oppenheimer was not a party to or third-party beneficiary of the agreements determining the priority of payments; (2) that Oppenheimer failed to join the Trustee of the bond indenture, a necessary party to the case; and (3) that Oppenheimer’s claims otherwise lacked merit.  The New York Supreme Court, Hon. Eileen Bransten, agreed and dismissed the case in its entirety, finding that Oppenheimer did not have standing to assert its claims because it was not party to the contracts, and that its failure to join the bond Trustee also required dismissal of the case.