W2007 Monday 230 Park Mezz II v. Landesbank Baden-Wuerttemberg

NEW YORK COUNTY
Contracts

New York Law Journal

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Justice Peter Sherwood

Plaintiff W2007 Monday 230 Park Mezz II brought an action to recover $4,788,000 plus interest and attorney fees it claimed it was wrongfully forced by defendant Landesbank Baden-Wuerttemberg (LBBW) to pay under protest on the eve of a real estate closing involving a Park Avenue property. The property was encumbered by several loans, including one governed by a written loan agreement. W2007 sought a declaratory judgment the agreement did not entitle LBBW to the forced payment. LBBW moved to dismiss arguing plaintiff's claims were barred by the language of the agreement providing that plaintiff, as borrower, was responsible for all of lender's costs and expenses it incurred in connection with prepayment of the loan. Plaintiff argued, among other things, LBBW was entitled only to costs and expenses incurred in connection with prepayment of the loan. The court rejected plaintiff's interpretation of the contract language to mean that it was responsible only for minor administrative costs, rather than all costs incurred as a result of prepayment of the loan, noting the fact LBBW incurred out-of-pocket cash payments aggregating over $4 million in respect to breaking of the swap agreement contracts.

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