UBS AG, London Branch v. Greka Integrated, Inc.

Background

UBS began the action in state court by seeking summary judgment without first filing a complaint under New York Civil Practice Law and Rules § 3213. UBS sought judgment against Greka Integrated, Inc. under the First Lien Greka Integrated Guaranty Agreement and the Second Lien Greka Integrated Guaranty Agreement. UBS requested $100 million, plus interest, costs, fees, and other enforcement expenses.

Greka removed the action to federal court, opposed UBS’s motion, and asserted counterclaims. Greka argued that the guaranties were not instruments requiring payment of money only, that UBS had not adequately shown how it calculated its damages, that the parties disputed the amounts owed and certain obligations, and that factual issues existed concerning defenses, including whether UBS fraudulently obtained the guaranties.

Earlier ruling

The opinion states that UBS’s motions for summary judgment and to dismiss Greka’s counterclaims were granted. The earlier ruling found that UBS’s request for $100 million, plus interest, fees, and costs under the two credit agreements, was supported by the documents. The credit agreements described two $50 million loans and specified methods for calculating interest and certain fees. The earlier ruling also found no genuine issue concerning the amount of damages then presented, explaining that UBS’s default letters showed amounts due when the letters were sent rather than claiming those exact amounts were still owed.

Later damages submissions

The matter was referred to Judge Fox for calculation of interest, fees, and costs. UBS later submitted a declaration and exhibits seeking amounts for unpaid interest, administrative-agent fees, deferred closing fees, performance payments, advisory and collateral-management fees, legal fees and costs, and amounts under the RILP Trustee Credit Agreement and the HVICC Trustee Credit Agreement. The submission listed a total of $59,510,567.12.

Judge Fox noted that the later submissions included evidence that had not been before the assigned district judge on the original motion. UBS also sought fees and other amounts that were not mentioned in that motion. In particular, the original motion did not include or discuss the RILP Trustee Credit Agreement. The original motion also did not include or mention the HVICC trustee loan agreement or advances to the HVICC trustee; some of those documents post-dated the original motion.

Ruling

Judge Fox stated that the assigned district judge decided the original motion without the RILP Trustee Credit Agreement, the HVICC Trustee Credit Agreement, or the Second Amendment to the HVICC Trustee Credit Agreement. He therefore was not convinced that Greka’s liability had been determined for the requested RILP and HVICC amounts. He also found it unclear whether liability had been determined for every other specific category UBS identified in its later submissions.

The order directed the parties, by February 15, 2021, to seek clarification from the assigned district judge concerning Greka’s liability for each specific category of damages UBS sought under the referral order. The opinion itself does not resolve the disputed categories or calculate the final interest, fees, or costs.