Landmark Court Ruling Forestalls Potential U.S. Market Chaos; New York's Highest Court Definitively Rules: 'A Trade is a Trade'
NEW YORK, Jan. 9, 2017 /PRNewswire/ -- A surprise New York Appellate Court decision that would have permitted parties to back out of agreed upon trades -- potentially wreaking havoc on U.S. debt and equity markets going forward -- has been sharply overturned by The New York State Court of Appeals, victorious New York debt, equity, and business litigation attorney Martin Eisenberg of The Law Offices of Martin Eisenberg today announced.
In this landmark decision, New York's highest court definitively ruled that 'a trade is a trade,' meaning a sale, purchase, or trade is executable even if a contemplated formal agreement has not been signed, as long as the material terms and conditions -- such as through emails and conversations -- are spelled out and mutually accepted. The Court's unanimous decision is not subject to appeal, putting an end to a crucial and long-debated market question.
"Had the lower court decision prevailed, the integrity of the U.S. debt and equity markets would have been in serious jeopardy going forward, with parties having carte blanche to back out of agreed upon trades arbitrarily or because of changing market conditions," said Mr. Eisenberg, who argued the landmark case on behalf of Stonehill Capital Management, LLC before a panel of seven judges. "Markets demand a platform of absolute confidence; this decision not only restores that platform, it permanently defines and protects it going forward. U.S. markets owe an enormous debt of gratitude to the Court of Appeals for its common-sense, forward-looking decision."
The Loan Syndications & Trading Association (LSTA), which works to increase transparency, education, fairness and order in the loan markets, lauded the "watershed" decision:
"Treating oral agreements as binding is a watershed moment and necessary to protect against chaos and to ensure the order of the financial markets," said LSTA general counsel, Elliot Ganz.
The Stonehill Capital, LLC vs. Bank of the West decision, which involved three New York courts during 2014, 2015, and 2016, is available here. Video of oral arguments before the Court of Appeals is available here.
Mr. Eisenberg is available today to discuss the Stonehill Capital, LLC vs. Bank of the West case and its myriad implications.
SOURCE The Law Offices of Martin Eisenberg
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