Tags: Barclays, Black Diamond Capital Management, KISS songs
In the case of its 2005 derivative agreement with hedge fund Black Diamond Capital Management, it defaulteth in two ways.
Last year, Justice Eileen Bransten in state Supreme Court in Manhattan dismissed Black Diamond’s breach of contract claim. However, the Appellate Division of the Supreme Court, a midlevel appeals court, reversed that ruling in a 3-2 decision on Thursday.
The court found Barclays breached the contract both by not making the $5 million payment on time and by failing to follow the contract’s procedures for disputing a collateral call, which required the bank to pay the full $40 million amount before disputing it.
“The evidence in the record undeniably shows that Barclays failed to pay the undisputed amount by the deadline, and establishes as a matter of law that Barclays did not comply with the (contract’s) dispute resolution process,” the three-judge majority wrote.
With Barclays in default, Black Diamond had the right to terminate the agreement and demand a return of its entire collateral, which the fund has estimated at $297 million, the court said.
Barclays found liable in $300 million Black Diamond dispute [Reuters]