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Ursa Minor Ltd. v. Aon Financial Products, Inc.
Citation: 7 F. App'x 129Docket: Docket No. 00-9261
Court: Court of Appeals for the Second Circuit; April 11, 2001; Federal Appellate Court
The District Court's decision is affirmed regarding the appeal by defendants Aon Financial Products, Inc. and Aon Corporation, who contested the grant of summary judgment in favor of plaintiffs Ursa Minor Limited and Bankers Trustee Company Limited. The case involves a surety bond issued by the Government Service Insurance System (GSIS) related to a loan from the plaintiffs' predecessor to a Philippine land development company. The defendants entered into a credit default swap agreement, committing to pay the bond amount if GSIS refused to honor it. GSIS has denied liability for the bond's validity, prompting the plaintiffs to seek recovery from the defendants under the swap. The court affirms the lower court's ruling for two main reasons. First, the defendants filed a motion for reconsideration outside the timeframe set by Federal Rule of Civil Procedure 59(e), rendering their appeal untimely. The expiration of the appeal notice period was not extended, as clarified by relevant case law. Second, even if the appeal were timely, the defendants' arguments against payment, which focus on the validity of the surety bond, lack merit. The credit default swap explicitly waives defenses related to the bond's invalidity or unenforceability, preventing the defendants from using these defenses to avoid payment. The court emphasizes that parties in a contract are responsible for the risks they allocate to each other, and the judiciary will not interfere. After reviewing all of the defendants’ contentions, the court finds no grounds for reversal and thus affirms the district court's judgment.