Mitel Networks — Another Development In Liability Management Transactions

January 27, 2025 – As a companion piece to Hughes Hubbard's alert on the recent Fifth Circuit Serta decision this alert focuses on the decision of the New York Supreme Court, Appellate Division, First Department, related to an "Uptier LMT" effectuated by MLN US HoldCo LLC (a U.S. holding company of Mitel Networks Corp.) and a group of consenting lenders. On Dec. 31, 2024, the same day as the Fifth Circuit Serta decision,¹ the First Department, among other things, affirmed the trial court's decision granting the motions to dismiss two of the non-consenting lenders' claims and reversed the trial court's decision to deny the motions to dismiss the remaining claims of the Non-Consenting Lenders. Although both the Serta and Mitel Networks disputes involved a liability management transaction (LMT) effectuated with Consenting Lenders on a non-pro rata basis, the Mitel Networks court reached a conclusion opposite to that of the Serta court based on distinguishing language in