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Caspian Alpha Long Credit Fund, L.P. v. GS Mezzanine Partners 2006, L.P.

Supreme Court of Delaware

May 22, 2014

CASPIAN ALPHA LONG CREDIT FUND, L.P., CASPIAN SELECT CREDIT MASTER FUND, LTD., CASPIAN CAPITAL PARTNERS, L.P., and MARINER LDC, Plaintiffs-Below, Plaintiffs-Below,
v.
GS MEZZANINE PARTNERS 2006, L.P., and GS MEZZANINE PARTNERS V, L.P., Defendants-Below, Appellees

Submitted April 30, 2014

Case Closed June 9, 2014.

Court Below: Court of Chancery of the State of Delaware. C.A. No. 5941-VCL.

Neal J. Levitsky, Esquire, Seth A. Niederman, Esquire, Carl D. Neff, Esquire, Fox Rothschild LLP, Wilmington, Delaware.

Of Daniel P. Goldberg, Esquire, Holwell Shuster & Goldberg, LLP, New York, New York, for Appellants Caspian Alpha Long Credit Fund, L.P., Caspian Select Credit Master Fund, Ltd., Caspian Capital Partners, L.P., and Mariner LDC.

Kevin G. Abrams, Esquire, Derrick Farrell, Esquire, Abrams & Bayliss LLP, Wilmington, Delaware.

Of Irwin H. Warren, Esquire, Lauren B. Hoelzer, Esquire, Weil, Gotshal & Manges LLP, New York, New York; and Christine T. DiGuglielmo, Esquire, Weil, Gotshal & Manges LLP, Wilmington, Delaware, for Appellees GS Mezzanine Partners 2006, L.P., and GS Mezzanine Partners V, L.P.

Before STRINE, Chief Justice, BERGER, and RIDGELY, Justices.

OPINION

Page 1204

STRINE, Chief Justice:

In 2007, Marisco Superholdco, LLC and Marisco Superholdco Notes Corp. (collectively, the " Issuer" ) issued notes (the " Superholdco Notes" ) through a private placement under an indenture dated December 14, 2007 (the " Indenture" ) between the Issuer and Wells Fargo Bank, N.A., as Trustee. In 2010, as part of a financial restructuring, the Issuer proposed amendments to the Indenture that were approved by a majority of the Superholdco noteholders. The appellees, GS Mezzanine Partners 2009, L.P. and GS Mezzanine Partners V, L.P. (collectively, " GS Mezzanine" ), who owned a majority of the Superholdco Notes, voted in favor of the amendments.

The appellants, Caspian Alpha Long Credit Fund L.P., Caspian Select Master Fund, LTD., Caspian Capital Partners, L.P., and Mariner LDC (collectively " Caspian" ), are Superholdco noteholders who brought suit in the Court of Chancery contending that they were injured by the amendments to the Indenture. Caspian's complaint included claims against GS Mezzanine, which were premised on the theory that Section 6.06 of the Indenture gave Caspian a basis to sue its fellow noteholder for voting to approve the amendments to the Indenture that Caspian believed were unfavorable to it. GS Mezzanine moved to dismiss the claims against it under Court of Chancery Rule 12(b)(6), and the Court of Chancery granted that motion, finding that Section 6.06 could not reasonably be read to provide Caspian with a basis to sue GS Mezzanine for voting to approve amendments to the Indenture. On appeal, Caspian argues that the Court of Chancery erred and that Section 6.06 can be reasonably read to provide it with a basis to sue GS Mezzanine for breach of contract. For the following reasons, we affirm the Court of Chancery's dismissal of the claims Caspian brought against GS Mezzanine.

Page 1205

We review the Court of Chancery's dismissal of a claim under Rule 12(b)(6) de novo .[1] In deciding a motion to dismiss under Rule 12(b)(6), a trial court must accept as true all well-pled allegations of fact and draw reasonable inferences in the plaintiff's favor, but a court is not required to accept every strained interpretation proposed by the plaintiff.[2] Dismissal of a claim based on contract interpretation is ...


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