DECISION AFTER TRIAL Reference is made to the Court’s interim order of February 7, 2020 which is incorporated by reference. The interim order withdrew the partial decision in favor of Line Trust Corp. Ltd., Deuce Properties Ltd., and Ashford Hospitality Finance LP (collectively the “Junior Lenders”) issued on the transcript of proceedings of February 6, 2020. The partial decision was withdrawn because the Plaintiff preserved the right to include in post-trial briefing excerpts from three deposition designations (Christopher Peckham, Isaac Neuberger, and Eric Franklin) and references to multiple documents in evidence, including two exhibits (Exhs. 45 and 46) which were admitted as purported summaries of documents in evidence but not for the truth of the contents of the summaries as they were post facto summaries, prepared by Plaintiff’s counsel at some point prior to the trial of this ten-year old action.1 Trial Tr. 17-20. Extensive post-trial briefing was submitted on February 27, 2020. For the reasons that follow, the Court adheres to the ruling it made on the transcript of proceedings with respect to the Junior Lenders entitlement to retain the $31.4 million the three Junior Lenders received pursuant to judgments previously entered by the Court. The Junior Lenders established their entitlement to these funds by a preponderance of the evidence adduced at trial. The Junior Lenders’ claim to recover attorneys’ fees pursuant to Section 33 of the Inter-Creditor Agreement at issue in this case is granted on the grounds that the Junior Lenders are the prevailing party on their counterclaims seeking a declaration of rights against the Senior Lender. Inasmuch as Section 33 of the Inter Creditor Agreement only provides for the recovery of “reasonable” attorneys’ fees related to the enforcement of the Junior Lenders’ rights against the senior lender, the Court will determine the quantum of fees absent a stipulation of the parties. In all events, the Court will defer assessing fees until any subsequent appeal from this Court’s order is resolved. With respect to the Plaintiff’s guaranty claim against Lightstone Holdings LLC and David Lichtenstein (the “Guarantors”), for the reasons that follow the Court finds that the Plaintiff is entitled to recover from the Guarantor $16,125,772 together with prejudgment interest and, as explained infra, no attorneys’ fees. The trial of this ten-year old action took place on February 5 and 6, 2020. The parties to this action each claim either an entitlement to receive eight or nine figure sums of money or to retain eight figure sums of money. Given the stakes involved, it was perplexing that the trial concluded in a day and a half with only 500 pages of trial transcript, considerably more than half of which consisted of the reading of deposition testimony and colloquy of counsel with the Court. The trial record is, of course, closed as all of the parties rested with Plaintiff reserving the right to submit post-trial memoranda referencing three pre-trial depositions that were otherwise admissible at trial, but not read at trial in the interest of efficiency. The other parties filed post-trial briefs simultaneously with the filing of Plaintiff’s post-trial brief. Throughout the long-tortured history of this ten-year old case, each of the parties has asserted positions in Court proceedings that significantly vary with the positions the parties asserted at trial. In this respect, the case has a certain Jarndyce and Jarndyce quality to it. The parties have made so many motions, asserted so many different positions, entered into so many amended plans of reorganization in related proceedings in the U.S. Bankruptcy Court, filed tens of thousands of pages of briefs, affidavits and exhibits, and taken so many appeals that a relatively simple number of contested issues has exploded into a docket sheet in this Court containing 1212 entries and 40 motions, excluding appeals,2 and excluding a decade of voluminous filings in the Bankruptcy Court. As noted in the Court’s interim decision and order dated February 7, 2020, three financial institutions — Wachovia Bank, N.A. (now Wells Fargo), Bear Stearns, and Bank of America, collectively the (“Original Lenders”) — provided approximately $7.4 billion in financing in connection with Lightstone Holdings LLC’s acquisition of the Extended Stay Hotel (“ESH”) portfolio of hotels. The loan was secured by mortgages on 664 hotel properties owned by ESH as well as assignments of leases and rents and security agreements pertaining to the various hotel properties. In addition, the sponsors of the ESH transaction issued guaranties of repayment of both the senior and junior debt, and a “bad boy” guaranty capped at $100 million which would be triggered by a bankruptcy of ESH. The Original Lenders divided the financing into senior debt ($4.1 billion) and junior debt (ten tranches of mezzanine/junior debt aggregating $3.3 billion) with the expectation that different tranches of the debt would be sold to third parties. The Original Lenders, which collectively funded 100 percent of the both the senior and junior debt, entered in an Inter-creditor Agreement dated June 11 2007 (the “ICA”) which contained a Section 15(q) that was captioned “Non-Recourse Carveout Guaranty” (the “Guaranty”) pursuant to which the sponsors guaranteed a capped payment of $100 million in the event of bankruptcy. In addition to the other guaranties the sponsors issued in connection with the financing the sponsors obtained, ESH filed for bankruptcy on June 15, 2009 and, thereafter, protracted bankruptcy proceedings took place involving years of litigation and, according to Alex Killick — Plaintiff’s only fact witness-is ongoing. The originating lenders of the ESH loans assigned the mortgage that secured the Senior Loan and related documents to Wells Fargo. In March 2009, Wells Fargo assigned to the Plaintiff Trust all of its rights, titles, and interests in the Senior Loan and related documents. The Trust is a commercial mortgage-backed securities (“CMBS”) trust, and the beneficial owners of the Trust are certificate holders. Plaintiff filed this lawsuit on behalf of the investors/certificate holders in the Trust. CWCapital Asset Management LLC is the special servicer of the Trust. The trial of this case presented two issues to the Court for resolution: (1) as between the Senior and Junior Lenders which party or parties is entitled to the proceeds of the $100 million Section 15(q) guaranty; and (2) whether, following the bankruptcy, there was a deficiency on the amounts received on the senior debt which would form the basis of a claim by the Senior Lender under either the $100 million Section 15(q) capped guaranty or the separate guaranty the sponsors gave to the Senior Lender. All parties agree that if there was no deficiency on the senior debt, the Junior Lenders, which were essentially wiped out by the bankruptcy, were entitled to retain the proceeds of their pro rata share of the Section 15(q) guaranty3. Similarly, all parties agree that if the evidence establishes that Section 15(q), which the Appellate Division found to be ambiguous (103 A.D.3d 458, 450-60 (2013)), was for the exclusive benefit of the Junior Lenders, the Senior Lender has no claim against the Junior Lenders. And, while the Senior Lender disputes that the Senior Lender has no claim against the Guarantor if there is no deficiency on the senior debt, common sense and the applicable law require dismissal of the Senior Lender’s claims against the Guarantor under either the Section 15(q) guaranty or the separate guaranty provided to the Senior Lender if there is no deficiency.4 During the course of what can only be described as a truncated trial, the Court raised two fundamental concerns. With respect to Section 15(q) the Court noted: [T]here must be people alive who were present when these documents were drafted[]…it shouldn’t be that hard to get to the truth of resolving this ambiguity. February 5 Trial Tr. At 4:21-25. And with respect to the deficiency the Court noted: I’m just trying to find out whether the Senior Lenders are whole or not. Because if the Senior Lenders are whole, then there is no reason for us to be here. February 5 Trial Tr. 38:9-12. On June 15, 2009, the ESH borrowers filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. SOF, 29; J.L. Ex.2 (NYSCEF Doc. No. 1008). It is undisputed that the filing of the voluntary Chapter 11 petition was a recourse event under the Senior Loan Agreement and the Junior Loan Agreements pursuant to which the Guarantors became liable under the Guaranty. SOF,
30 & 32. Accordingly, the Junior Lenders filed suits against the Guarantors to collect the proceeds from the Section 15(q) Guaranty. SOF, 33. The Junior Lenders (except Ashford, which settled with the Guarantors prior to being awarded a judgment), were awarded judgments against the Guarantors. SOF,
