653892/15. CARBURES EUROPE, S.A., ET AL., plf-app-res, v. EMERGING MARKETS INTRINSIC CAYMAN LTD., ET AL., def-res-app — BULENT TOROS, ET AL., def — Pryor Cashman LLP, New York (Philip R. Hoffman of counsel), for ap-res — Chaffetz Lindsey LLP, New York (Scott W. Reynolds of counsel), for res-ap — Order, Supreme Court, New York County (Saliann Scarpulla, J.), entered on or about June 9, 2016, which, to the extent appealed from as limited by the briefs, granted defendants Emerging Markets Intrinsic Cayman Ltd. and Emerging Markets Intrinsic Ltd.’s motion to dismiss the claims for fraud and breach of the implied covenant of good faith and fair dealing as against them, and denied the motion to dismiss the breach of contract claim as against them, unanimously modified, on the law, to grant the motion as to the breach of contract claim as against defendant Emerging Markets Intrinsic Ltd., and otherwise affirmed, without costs.
Pursuant to a Margin Lending Agreement (MLA), defendant EMI Markets Intrinsic Cayman Ltd. (EMI Cayman) agreed to lend plaintiff Carbures Europe, S.A. _7 million in exchange for _14 million worth of Carbures stock as collateral for the repayment of the loan. The MLA provides, as relevant, that, except upon an event of default or as a hedge, the collateral “will not be (i) loaned, pledged, repledged, hypothecated or rehypothecated outside of the Lender or structure itself or (ii) sold or traded in any exchange or over-the-counter transactions.” Plaintiffs allege that EMI Cayman repeatedly sold and lent the collateral shares, in contravention of the MLA, which caused the share price to decline.
