Supreme Court had dismissed plaintiff’s complaint seeking recovery of $6.35 million expended in defending and settling a lawsuit brought by Western Mining & Investments LLC (WMI). Tri-Links Investment Trust, which acquired a majority interest in a debtor-in-possession group, had opposed the WMI deal. Reversing Supreme Court’s dismissal, the First Department granted plaintiff summary judgment as to liability on its cause of action for contractual indemnity. Tri-Links’ notice of the lawsuit brought against plaintiff by WMI afforded Tri-Links ample opportunity to protect its interest in that proceeding, in which it could have intervened at any time. Among other things, Tri-Links had a copy of the complaint in the WMI action no later than May 2002, four months after suit was commenced. Also, plaintiff notified Tri-Links of the action orally in March, and in writing in May 2003, and was directly notified of the lawsuit by plaintiff. Such notice bound Tri-Links to any reasonable and good faith settlement of the WMI action. Further, the record established that plaintiff was sued in the WMI action for conduct in its capacity as agent for a group of lenders, triggering the applicability of the relevant indemnity agreement. View PDF >
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