NEW YORK (Reuters), Friday, March 17, 2017 – Bombardier Inc. (BBDb.TO), a New York State judge rejected an attempt to dismiss a lawsuit brought by a group a hedge funds. They accused Bombardier Inc. (BBDb.TO of selling new debt following divesting of major business in 2020 and 2021.
Justice Andrew Borrok, of Manhattan Supreme Court, stated that the hedge funds didn’t waive their rights to declare Bombardier defaulted on Bombardier bonds. This was part of a $250m issuance due in 2034. The businesses included its commercial aviation program.
Bombardier was sued by the Corbin Opportunity Fund, Corbin ERISA Opportunity Fund, and Antara Capital Master Fund hedge funds, following the sale of $260 million more bonds to an investor.
The investor received a majority share of the $510 million issue, which it then voted to cancel.
Three hedge funds claimed that Bombardier did not have the right to do this. The default required Bombardier, which included outstanding principal and future interest payments, to pay $398 million.
Borrok denied some claims of plaintiffs, but stated that they were able to replead them.
Bombardier didn’t immediately reply to our requests for comment.
Duane Loft is a Pallas Partners partner who represented the plaintiffs. He said that they were pleased with the Court’s interpretation of the indenture. “These new notes do not count as a waiver for the past default.
Bombardier now concentrates mainly on private aircraft. The company’s main rivals are Gulfstream jet manufacturer General Dynamics Corp (GD.N), and Cessna plane maker Textron Inc. (TXT.N).
Antara Capital Masterfund LP et. al v Bombardier Inc et. al., New York State Supreme Court. New York County. 650477/2022.
Allison Lampert reported in Montreal, and Jonathan Stempel in New York. Maiya Keidan contributed additional reporting in Toronto. Grant McCool edited.
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