P7 OWNER LLC, plf-ap, v. ARBOR REALTY TRUST, INC., ET AL., def-res

3008. P7 OWNER LLC, plf-ap, v. ARBOR REALTY TRUST, INC., ET AL., def-res — Ellenoff Grossman & Schole LLP, New York (Eric S. Weinstein of counsel), for ap — Morrison Cohen LLP, New York (Y. David Scharf of counsel), for res — Order, Supreme Court, New York County (Jeffrey K. Oing, J.), entered March 8, 2016, which denied plaintiff’s motion for summary judgment, and granted defendants’ cross motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

Plaintiff owned the most subordinate of the participation interests in a $125 million mortgage loan. Defendant Arbor Realty Participation, LLC, an indirect wholly owned subsidiary of defendant Arbor Realty Trust, Inc., owned a more senior participation interest in the loan and acted as servicer of both its and plaintiff’s interests. When $35 million of the loan was written down pursuant to a restructuring of the financing, plaintiff’s participation interest was eliminated. Plaintiff claims that defendants breached their obligations under the governing sub-participation agreement by inappropriately allocating the entire write-down to plaintiff’s participation interest.