A $55 million lawsuit by a unit of Cerberus Capital Management L.P. can proceed against Paul, Hastings, Janofsky & Walker over allegations the firm gave faulty advice on a loan made in connection with a private equity firm’s 2008 acquisition of bankrupt retailer Steve & Barry’s.

In a decision filed last week, Manhattan Supreme Court Justice Shirley Kornreich said Paul Hastings had “conclusively rebutted” Cerberus’ lending arm’s claim that it would not have made a $125 million loan if it knew the recipient, an affiliate of Bay Harbour Management L.C., was acquiring less than all of Steve & Barry’s inventory. But the judge said the law firm had not shown that it accurately advised the Cerberus affiliate on acquisition documents and their impact on the loan’s security.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]