Opinion
December 4, 1997
Appeal from the Supreme Court, New York County (Salvador Collazo, J.).
It is well settled that an agreement to pay interest at a higher rate in the event of default or maturity is an agreement to pay interest and not a penalty ( Union Estates Co. v. Adlon Constr. Co., 221 N.Y. 183, 187; Ruskin v. Griffiths, 269 F.2d 827, 832, cert denied 361 U.S. 947). Exactly what defendant hopes to uncover through further disclosure that would justify avoidance of this proposition is not clear. The prior appeal determined that plaintiff was not a co-sponsor of the conversion and owed defendant no fiduciary duties ( 241 A.D.2d 351). It does not avail defendant to argue that it lacked bargaining power with respect to the negotiation of the default interest clause or that enforcement of that clause will effectively deprive it of the right of redemption ( see, Graf v. Hope Bldg. Corp., 254 N.Y. 1).
Concur — Murphy, P.J., Sullivan, Tom, Mazzarelli and Colabella, JJ.