All Claims Against The Bank of New York Mellon Dismissed

The firm obtained a substantial victory on behalf of Paul, Weiss client The Bank of New York Mellon, when the New York Appellate Division, First Department, dismissed all of the remaining claims asserted against BNYM in its capacity as indenture trustee for certain notes issued by the predecessor to LyondellBasell, the world's third largest chemical company. The noteholders, who sought approximately $1 billion in purported damages, claimed that BNYM had violated its duties as indenture trustee by allowing LyondellBasell to issue, in connection with Basell's acquisition of Lyondell, an additional $20 billion in debt senior to the notes. Approximately a year after the acquisition, LyondellBasell filed for bankruptcy.  Although the noteholders achieved some recoveries in the bankruptcy proceeding through an adversary proceeding against the senior lenders, their notes went largely unpaid. 

Several months after the settlement of the adversary proceeding, the noteholders filed suit against BNYM. The trial court (Justice Shirley Kornreich) granted BNYM's motion to dismiss the noteholders' fiduciary duty claim, but permitted claims for negligence and breach of contract to proceed. The First Department reversed the lower court's decision as to the remaining claims, and dismissed the case in its entirety, adopting BNYM's argument that the noteholders' claims were barred under the settlement agreement that resolved the adversary proceeding.

The team on the matter included litigation partners Allan Arffa, Les Fagen, Brad Karp and Dan Leffell. Allan argued the motion to dismiss, and Les argued the appeal.