In Lantau Holdings v. Orient Equal International Grp., No. 653920/2016, 2017 BL 77469 (Sup. Ct. March 6, 2017), Judge Anil C. Singh of the New York County Commercial Division dismissed several claims by the plaintiff, Tarrytown-based lender Lantau Holdings, against defendant Haitong International Securities Company Limited (Haitong), a member of the Haitong Group, one of China’s largest securities businesses.
The case sprang from a securities repurchase lending agreement gone bad. In a nutshell, Lantau alleged that several defendant-borrowers pledged shares of equity as collateral that, unbeknownst to Lantau, were subject to a lock-up period. As a result, according to Lantau, it could not trade them during the loan period as it had already committed to do. Lantau alleged that Haitong knew the shares were subject to the lock-up period, but never told this to Lantau, despite Haitong’s active assistance in resuscitating the transaction when it hit a snag.
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