Opinion
04 Civ. 10014 (PKL).
June 26, 2006
MEMORANDUM ORDER
Plaintiff Aristocrat Leisure, Limited ("Aristocrat"), issuer of a $130 million convertible bond indenture with a transposed currency-exchange rate, brought this action seeking reformation of the indenture (the "Indenture") and a declaration of its immediate right to call the bonds for redemption. In an Opinion and Order dated August 12, 2005, the Court reformed the Indenture to correct the exchange rate, but denied Aristocrat's motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Ams., No. 04 Civ. 10014, 2005 WL 1950116 (S.D.N.Y. Aug. 12, 2005). On May 30, 2006, the Court found, as a matter of law, that Aristocrat was in breach of its obligation to deliver shares with respect to all but one of the intervening defendant bondholders (the "Bondholders"), but also denied the Bondholders' request for a declaration that they were entitled to specific performance, finding instead that damages were an adequate remedy for Aristocrat's breach. Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Ams., No. 04 Civ. 10014, 2006 WL 1493132, at *6-13 (S.D.N.Y. May 30, 2006). In addition, the Court found that the statutory prejudgment interest rate of nine percent under the New York Civil Practice Law and Rules would apply to damages stemming from Aristocrat's breach. Id. at *13. Aristocrat now requests an order allowing it to deposit $130 million, which sum represents the principal amount of bonds issued under the Indenture, with the Court registry pursuant to Rule 67 of the Federal Rules of Civil Procedure. Aristocrat also moves the Court for a declaration that such a deposit would stop the accrual of prejudgment interest on the sum deposited.
The bonds matured on May 31, 2006.
Rule 67 permits "a party, upon notice to every other party, and by leave of court, [to] deposit with the court all or any part of" a sum of money or other thing capable of delivery. Fed.R.Civ.Proc. 67. The decision whether to permit a Rule 67 deposit lies within the district court's discretion. See Gulf States Utils. Co. v. Alabama Power Co., 824 F.2d 1465, 1475 (5th Cir. 1987); John v. Sotheby's, Inc., 141 F.R.D. 29, 33 (S.D.N.Y. 1992). The Court grants plaintiff's request for leave to deposit the above-mentioned funds pursuant to Rule 67. Plaintiff may submit a proposed Rule 67 order with appropriate language for the Court's review.
However, plaintiff's request for a declaration that the deposit of the $130 million would toll the running of interest is denied. Because the payment in question has not been made, this issue is not ripe for adjudication at this time. See, e.g., United States v. Broadcast Music, Inc., 275 F.3d 168, 178 (2d Cir. 2001) ("The ripeness doctrine `cautions courts against adjudicating contingent future events that may not occur as anticipated, or indeed may not occur at all.'" (quoting Volvo N. Am. Corp. v. Men's Int'l Prof. Tcnnis Council, 857 F.2d 55, 63 (2d Cir. 1988)). The Court reserves any decision regarding the legal effect of a Rule 67 deposit by plaintiff until the issue is properly before the Court.
SO ORDERED.