By Allison Lampert and Jonathan Stempel
NEW YORK, March 17 (Reuters) - A New York state judge on
Friday rejected an attempt by Bombardier Inc to
dismiss a lawsuit by a group of hedge funds that accused the
business jet maker of short-changing them by selling new debt
after divesting major businesses in 2020 and 2021.
Justice Andrew Borrok of the Manhattan Supreme Court said
the hedge funds did not waive their right to declare Bombardier
in default on their bonds, part of a $250 million issuance
maturing in 2034, when it sold the businesses, including its
commercial aircraft program.
The hedge funds Antara Capital Master Fund, Corbin ERISA
Opportunity Fund and Corbin Opportunity Fund sued Bombardier
last January, after the company sold an additional $260 million
of the bonds to another investor.
That sale gave the investor a majority of the now $510
million issuance, and it voted to waive the default.
The three hedge funds said it had no right to do that. They
claimed that the default required Bombardier to pay them $398
million, including outstanding principal plus the present value
of future interest payments.
Borrok dismissed some of the plaintiffs' claims but said
they could replead them.
Bombardier did not immediately respond to requests for
comment.
Duane Loft, a partner at Pallas Partners who represents the
plaintiffs, said: "We're pleased that the court interpreted the
indenture to mean what it says - that these new notes don't
count for purposes of waving the past default."
Bombardier now focuses mainly on private jets. Its rivals
include Gulfstream jet maker General Dynamics Corp and
Cessna jet maker Textron Inc .
The case is Antara Capital Master Fund LP et al v Bombardier
Inc et al, New York State Supreme Court, New York County, No.
650477/2022.
(Reporting by Allison Lampert in Montreal and Jonathan Stempel
in New York; Additional reporting by Maiya Keidan in Toronto;
editing by Grant McCool)
Messaging: jon.stempel.thomsonreuters.com@reuters.net))
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