Lowenstein Sandler obtained expedited relief on behalf of activist hedge fund Brigade Capital Management, LP (Brigade) and won a ruling allowing Appaloosa Management L.P. (Appaloosa) to move forward in a Stuyvesant Town suit in two separate securities litigations. These ongoing representations highlight the firm’s prowess as an effective advocate for enhancing value on behalf of the investment fund community.
Brigade, an investor in Kindred Healthcare Inc., objected to Kindred’s proposed $4.1 billion sale to a consortium consisting of Humana Inc. and two private equity firms. On Brigade’s behalf, Lowenstein filed suit in the Delaware Court of Chancery for expedited discovery, additional disclosure, and a delay in the stockholder vote on grounds that, among other things, a conflicted director was not adequately recused from the sales process. Siding with our client, the court ordered Kindred to produce expedited discovery concerning the conflicted director, including an expedited deposition. As a result, Kindred was forced to make additional disclosures about the role played by the conflicted director, and the court ordered a five-day delay in the vote.
On behalf of Appaloosa, Lowenstein defeated opponents’ motion for judgment on the pleadings in an opinion rendered by the U.S. District Court for the Southern District of New York. The case involves a dispute over the allocation of over $600 million in sales proceeds generated by the sale of Peter Cooper Village and Stuyvesant Town in New York City. Appaloosa, an investor in trusts holding assets secured by a mortgage on Stuyvesant Town, contends that it was improper to distribute those funds as Penalty Interest to a Special Servicer and asserted that the disputed funds constituted Gain-on-Sale Proceeds for the benefit of certificateholders. After reviewing cross-motions for judgment on the pleadings, the court ordered that the litigation must proceed to the discovery phase.
The Lowenstein team included Lawrence M. Rolnick and Steven E. Siesser.