We secured an important victory for lenders that participated in a financing transaction involving Mitel

Davis Polk is representing a group of lenders under a set of 2018 credit agreements that participated in an October 2022 financing transaction undertaken by MLN TopCo Ltd. and related entities (collectively, “Mitel”), a major Canadian telecommunications provider. Several months after the 2022 transaction, the participating lenders were sued, in the Commercial Division of the Supreme Court of New York, by other lenders under the 2018 credit agreements that did not participate in the 2022 financing.  

The plaintiffs named as defendants in their lawsuit Mitel; Searchlight Capital Partners, LP, Mitel’s private equity sponsor; our client lenders; additional participating lenders managed by Nuveen Asset Management, LLC or Teachers Advisors, LLC (the “Nuveen lenders”); and, Credit Suisse AG, Cayman Islands Branch, administrative agent under the Mitel credit facilities at issue. The plaintiffs challenged liens securing more than $850 million in debt owed to the participating lenders, and sought money damages, on the basis that the restructuring transaction violated the terms of the 2018 credit agreements, the implied covenant of good faith and fair dealing, and New York’s Uniform Voidable Transaction Act (the NYUVTA), among other claims. 

The Nuveen lenders also asserted that they were harmed by the 2022 transaction and brought crossclaims against our clients for breach of contract and violation of the NYUVTA.

Davis Polk filed on behalf of our clients comprehensive motions to dismiss both the claims asserted by the plaintiffs and the crossclaims asserted by the Nuveen lenders.  At the close of oral argument on December 5, 2023, Justice Jennifer G. Schecter dismissed the plaintiffs’ claims for breach of the implied covenant of good faith and fair dealing; tortious interference with contract; and violation of the NYUVTA. She also dismissed all claims asserted by the Nuveen lenders. 

The dismissals constituted an important victory for our client lenders. The plaintiffs and the defendants (other than the Nuveen lenders) have taken interlocutory appeals of the trial court’s motion to dismiss ruling to the intermediate New York State appellate court; these appeals were argued on October 8, 2024 and remain pending.

The Davis Polk civil litigation team includes partner Elliot Moskowitz, counsel Marc J. Tobak and Adam M. Greene. All members of the Davis Polk team are based in the New York office.

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