Opinion
Index No. 651303/2024 Motion Seq. No. 001
09-30-2024
DARK FOREST CAPITAL MANAGEMENT LP Plaintiff, v. SELINA HOSPITALITY PLC, Defendant.
Unpublished Opinion
MOTION DATE 03/11/2024
PRESENT: HON. MELISSA A. CRANE, JUSTICE
DECISION + ORDER ON MOTION
MELISSA A. CRANE, JUDGE
The following e-filed documents, listed by NYSCEF document number (Motion 001) 1-8, 17, 18 were read on this motion to/for JUDGMENT - SUMMARY IN LIEU OF COMPLAINT.
Upon the foregoing documents, plaintiffs motion for summary judgment in lieu of complaint is granted as set forth in this decision and order.
Plaintiff has established that service was proper. In addition, plaintiff has established prima facie entitlement to judgment as a matter of law.
CPLR 3213 provides for accelerated judgment where the instrument at issue is for the payment of money only and the right to payment is clear from the face of the document without regard to extrinsic evidence, "other than simple proof of nonpayment or a similar de minimis deviation from the face of the document" (Weissman v Sinorm Deli, Inc., 88 N.Y.2d 437, 444 [1996]; see Arbor-Myrtle Beach PE LLC v Frydman, 2021 NY Slip Op. 30223[U], 2 [Sup Ct, NY County 2021], aff'd 2022 NY Slip Op. 00806 [1st Dept 2022]).
The same standards that apply to motions for summary judgment under CPLR 3212 apply to CPLR 3213 motions. Movant must make a prima facie case by submitting the instrument and evidence of the defendant's failure to make payments in accordance with the instrument's terms (see Weissman, 88 N.Y.2d at 444; Matas v Alpargatas S.A.I.C., 274 A.D.2d 327, 328 [1st Dept 2000]).
Under the 2022 indenture, defendant "authorized the issuance of its 6.00% Convertible Senior Notes due 2026 . . ., initially in an aggregate principal amount at maturity not to exceed $147,500,000" (see Doc 5 [Indenture], Doc 4 [Ireland aff.]). In 2024, defendant exchanged $123.7 million of the Notes for new securities, reducing the face value of the remaining original Notes to $23,780,000 (see Doc 4 [Ireland aff], Doc 8 [Form 6-K]). Plaintiff has established that it owns 52% of the remaining original Notes in that it holds Notes amounting to $12,530,000 in aggregate principal ([Doc 4, Doc 8]).
Under the indenture, the Notes mature on November 1, 2026. However, defendants are required to pay 6% interest on the Notes in semi-annual payments (Doc 5 at pg 109). Plaintiff alleges that defendant failed to make the scheduled interest payment due on November 1, 2023, and have not paid, thereby triggering the acceleration clause in the notes. That is, a portion of the outstanding principal ("Accreted Principal Amount") and interest become "due and payable immediately" upon declaration by holders of at least "of at least 25% in aggregate principal amount at maturity of the Notes then outstanding" (see Doc 5 [Indenture] §§ 6.01(b), 6.02). On February 2, 2024, plaintiff triggered the Notes' acceleration mechanism by written notice to Defendant (Doc 7 [acceleration notice]).
Plaintiff contends that defendant owes it $11,4016,34.87 as of March 11, 2024 (Doc 4 [Ireland aff]). Plaintiffs CFO, Kelly Ireland, calculated that sum and states that it includes the missed interest payment from 11/2023, the "accreted principal" amount as of the acceleration date, and contractual interest.
In opposition, Defendant does not dispute liability. Rather, defendant argues only that plaintiff did not make its prima facie case by failing to explain its damages calculations adequately. The Court disagrees.
Plaintiff has established its prima facie entitlement to relief under CPLR 3213. Plaintiff has provided an affidavit from its Chief Financial Officer, Kelly Ireland, detailing the amount of the Notes held by plaintiff and the circumstances of defendant's default. Additionally, plaintiff submits the Indenture, a Brokerage Statement, the Acceleration Notice to defendant, as well as defendant's SCC Form 6-K in which defendant admits failure to make the November 2023 interest payment. Plaintiff demonstrates that the amounts defendant owes are calculable pursuant to the terms of the Indenture, Brokerage Statement, and Ireland Affidavit.
Thus, plaintiff has established that defendant defaulted under the Indenture and owes plaintiff the Accelerated Amount of $10,949,244.86 and the missed interest payment in the amount of $375,000. In addition, plaintiff is entitled to default interest at the contractual rate of 6% per annum on both the missed interest payment from November 1,2023 and on the "accreted principal" amounts from February 2, 2024 [the acceleration date].
The court has considered the parties' remaining contentions and finds them unavailing.
Accordingly, it is
ORDERED that the motion for summary judgment in lieu of complaint is granted, and the Clerk is directed to enter judgment in favor of plaintiff and against defendant in the amount of $11,4016,34.87, together with pre-judgment interest at the contractual rate of 6% per annum from March at the contractual rate of 6% from November 16, 2022 until the date of this decision and order, and thereafter at the statutory rate, as calculated by the Clerk, together with costs and disbursements to be taxed by the Clerk upon submission of an appropriate bill of costs; and it is further
ORDERED that the motion for summary judgment in lieu of complaint is granted and the Clerk is directed to enter judgment in favor of plaintiff and against defendant in the amount of $10,949244.86 at the contractual rate of 6% from March 12, 2024 until entry of judgment, and thereafter at the statutory rate, as calculated by the Clerk, together with costs and disbursements to be taxed by the Clerk upon submission of an appropriate bill of costs; and it is further
ORDERED that the Clerk is directed to mark this case disposed.