December 10, 2012

Law360 quotes Greg Cross’ appeal in $100 million guaranty matter

1 min

Venable partner Greg Cross’ argument to a New York appeals court was quoted in December 6, 2012 Law360 article. The appeal arose from a decision by a lower court to put junior lenders ahead of Venable client U.S. Bank NA in the collection of a $100 million guaranty from Extended Stay Hotels Inc.'s bankruptcy.

During a hearing before a five-judge panel, Cross called the original decision “ridiculous” and urged the appeals court to overturn the decision. Cross warned that if the “unprecedented” decision was not overturned, it would set a precedent making it hard for senior lenders to ensure they are first in line to collect after a default. “You'll throw the mezzanine market into disarray because every junior lender will say they're senior,” Cross said during the hearing. Cross also told the panel that U.S. Bank had not waived its rights to the $100 million in the intercreditor agreement and its interpretation of the contract was the only one not to interfere with other provisions.