The following e-filed documents, listed by NYSCEF document number (Motion 002) 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 43, 44, 45, 54 were read on this motion to/for DISMISS. DECISION + ORDER ON MOTION In this action arising from defendants’ alleged legal malpractice in rendering legal services concerning plaintiff’s turnover right in a debt subordination agreement, defendants move pursuant to CPLR 3211(a)(1) and (a)(7) for an order dismissing plaintiff’s complaint. Plaintiff opposes the motion. Background Plaintiff Prospect Capital Corporation (Prospect or plaintiff) is a business development company that provides loans to middle market companies (NYSCEF # 2 — complaint, 6). Prospect retained defendant Morgan Lewis & Bockius LLP (Morgan Lewis) for transactional legal services from January 2013 through July 2022 (id.). Defendant Matthew Schernecke was an attorney at Morgan Lewis during the relevant time and provided the legal services at issue (id., 5). On February 19, 2014, Prospect provided a $17 million senior secured term loan to non-party Venio LLC (Venio), a company engaged in the service of recovering unclaimed property (the Prospect Loan) (id., 7). In December 2014, Venio’s parent company Keane Holdings, Inc. (Keane Holdings) obtained a $12 million loan from non-party Silicon Valley Bank (SVB) (the SVB Loan) (id., 8). The complaint alleges that the SVB Loan was a junior loan for purposes of providing credit support to senior lenders (id., 9). In the same month, Prospect, SVB, another senior lender Bank of Montreal, and other creditors of Venio began negotiating a debt subordination agreement (the subordination agreement), under which the SVB Loan would be subordinate to the Prospect Loan so that the latter would have to be paid in full before the SVB Loan could be paid (id.). Defendants were engaged in negotiating the subordination agreement on Prospect’s behalf (id.). Section 1 of the subordination agreement provides that if Venio defaults on the Prospect Loan, SVB will be prohibited from receiving payments on the SVB Loan before Prospect is paid in full (subordination provision) (NYSCEF # 23, at 31). Section 5 of the subordination agreement contains a turnover provision, which requires a junior lender such as SVB to disgorge and pay over to a senior lender any payments such junior lender has received from a “Keane Entity” in violation of the payment priority (turnover provision) (id.; complaint, 12). This action centers around the change to the scope of the turnover provision. On December 15, 2014, defendants advised Prospect that the draft turnover provision in section 5 provided Prospect a turnover right against SVB for any payment SVB wrongfully received from Keane Holdings (id., 11). Four days later, Keane Holdings and SVB sent a revised draft back to Morgan Lewis, excluding Keane Holdings from the definition of “Keane Entity,” the group of entities subject to the turnover provision (id., 15). Practically, this change would deprive Prospect of the right to seek turnover of any payment SVB wrongfully received on the SVB Loan because the turnover provision no longer included Keane Holdings (id., 16). Defendants forwarded Prospect the redline version of the revised draft and, without pointing out the change in definition or the consequence of it, advised Prospect that “the document still works for us, substantively” (id., 18). Relying on that advice, Prospect agreed to the revised version and executed the subordination agreement with other parties on December 23, 2014 (id., 19). Upon closing, defendants inadvertently included a wrong version of the subordination agreement in a closing binder sent to Prospect, which version was the earlier draft that defined “Keane Entity” to include Keane Holdings (id.,
20-22). In the following years, defendants had been erroneously advising Prospect that it had a turnover right against SVB for payments on the SVB Loan ( 24). For instance, in April 2015, when Venio allegedly breached its covenants under the subordination agreement, defendants confirmed that Prospect had turnover rights against SVB for such breach (id.,
