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Atlantic Aviation Investments LLC v. MatlinPatterson Global Advisers LLC

Citations: 92 A.D.3d 461; 938 N.Y.2d 64

Court: Appellate Division of the Supreme Court of the State of New York; February 6, 2012; New York; State Appellate Court

Narrative Opinion Summary

Nonparty VarigLog is identified as an "affiliate" of Volo, a wholly-owned subsidiary of MP Funds, according to the memorandum of understanding (MOU) and the associated make-whole agreement. The sale of shares in question qualifies as an "Exit" as defined in the MOU. Under the make-whole agreement, Volo and MP Funds are required to distribute the proceeds from VarigLog's share sale to the plaintiff. The agreements are deemed unambiguous, eliminating the need for extrinsic evidence to interpret their meaning, as supported by legal precedents. Even though the make-whole agreement is intended as a temporary measure pending a final agreement post-second closing, it is sufficiently complete and contains essential terms for enforceability. The court has reviewed and dismissed the defendants’ additional arguments as meritless.

Legal Issues Addressed

Definition of 'Exit' in Share Sale Agreements

Application: The court confirmed that the sale of shares qualified as an 'Exit' under the definitions provided in the MOU.

Reasoning: The sale of shares in question qualifies as an 'Exit' as defined in the MOU.

Dismissal of Defendants' Arguments

Application: The court reviewed and dismissed the additional arguments presented by the defendants, finding them without merit.

Reasoning: The court has reviewed and dismissed the defendants’ additional arguments as meritless.

Distribution of Proceeds Under Contractual Obligations

Application: The make-whole agreement requires Volo and MP Funds to distribute the proceeds from VarigLog's share sale to the plaintiff, as defined by the terms of the agreement.

Reasoning: Under the make-whole agreement, Volo and MP Funds are required to distribute the proceeds from VarigLog's share sale to the plaintiff.

Enforceability of Agreements

Application: Despite being a temporary measure, the make-whole agreement was found to be sufficiently complete with essential terms, making it enforceable.

Reasoning: Even though the make-whole agreement is intended as a temporary measure pending a final agreement post-second closing, it is sufficiently complete and contains essential terms for enforceability.

Interpretation of Contractual Terms

Application: The court determined that the agreements in question were unambiguous, thus eliminating the need for extrinsic evidence to interpret their meaning.

Reasoning: The agreements are deemed unambiguous, eliminating the need for extrinsic evidence to interpret their meaning, as supported by legal precedents.