Mill Fin., LLC v. Gillett

• Decision Date: 25 April 2017
• Citation: 149 A.D.3d 643,53 N.Y.S.3d 49
• Parties: MILL FINANCIAL, LLC, et al., Plaintiffs–Appellants, v. George N. GILLETT, Jr., et al., Defendants, The Royal Bank of Scotland, PLC, Defendant–Respondent.
• Court: New York Supreme Court — Appellate Division

149 A.D.3d 643

53 N.Y.S.3d 49

MILL FINANCIAL, LLC, et al., Plaintiffs–Appellants,

v. George N. GILLETT, Jr., et al., Defendants,The Royal Bank of Scotland, PLC, Defendant–Respondent.

Supreme Court, Appellate Division, First Department, New York.

April 25, 2017.

Kasowitz, Benson, Torres & Friedman LLP, New York (Paul M. O'Connor, III of counsel), for appellants.

Goodwin Procter LLP, New York (Marshall H. Fishman of counsel), for respondent.

TOM, J.P., MAZZARELLI, ANDRIAS, MANZANET–DANIELS, WEBBER, JJ.

Order, Supreme Court, New York County (Eileen Bransten, J.), entered July 12, 2016, which granted defendant Royal Bank of Scotland, PLC's motion for summary judgment dismissing the remaining cause of action, for breach of contract, against it, unanimously modified, on the law, to reinstate the claim only insofar as based on an alleged inability to refinance, and otherwise affirmed, without costs. Appeal from order, same court and Justice, entered October 7, 2016, which denied plaintiffs' motion for reargument, unanimously dismissed, without costs, as taken from a nonappealable paper.

Defendants George Gillett and Thomas Hicks each owned a 50% share of the Liverpool Football Club of the English Premier League through a series of entities. In January 2008, defendant Royal Bank of Scotland, PLC (RBS) extended loan facilities to defendant Gillett, Hicks, and certain entities through which they owned the Club to refinance the debt with which the Club had been purchased. Simultaneously, plaintiffs Mill Financial, LLC and Mill Football Holdings, PLC (collectively, Mill) made loans to Gillett Football, LLC, an entity through which Gillett owned his 50% share of the Club. Mill, RBS, and another lender also entered into an intercreditor agreement, which required them to provide prior notice to the other parties to the agreement of any action they took to enforce their applicable loan documents.

On April 16 and again April 30, 2010, RBS extended the maturity of its loan facilities, with a new maturity date in October 2010. However, pursuant to one April 16, 2010 "side letter" and two April 30 "side letters," RBS imposed conditions upon the extensions, including a public announcement that the club was for sale and appointment of an independent director to manage the sale process. RBS did not provide prior notice of the conditions, as required by the intercreditor agreement.

Eventually, the Club was sold for a sum that was insufficient to repay the Mill loan, and Mill commenced...