May 08, 2014

On this day in 2013, the firm won a high-stakes bench trial for firm client Chesapeake Energy Corporation in a declaratory judgment action against Bank of New York Mellon Trust Company, which served as trustee for a $1.3 billion bond offering. The complex civil case unfolded at hyper-speed, as a mere six weeks passed from the time the complaint was filed until the start of the trial.  Chesapeake sued BNY Mellon to challenge BNY Mellon’s determination that Chesapeake missed a contractual deadline to issue a notice exercising its right to redeem the $1.3 billion in notes at par.  Chesapeake wanted to redeem the notes at par so that it could refinance the $1.3 billion in debt and save approximately $100 million in interest expense. The firm initiated the action in the SDNY on March 8, 2013, to obtain a declaration that a notice issued by March 15, 2013 was “timely and effective” to effect a redemption at par. The Court held that the contract in question was "clear and unambiguous" in giving Chesapeake the right to issue a notice to redeem at par up until March 15.  The Court also held that even if the contract was not clear and unambiguous, extrinsic evidence demonstrated that the drafters intended for Chesapeake to have the right to give notice until March 15.  The team included Partners Richard Ziegler, Stephen AscherTony Barkow, Toby Knapp and Michael Ross; Associates Anne Cortina Perry and Ali Arain and Prashant Yerramalli; and about 20 other lawyers who were engaged on the matter night and day.   


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