Alternative investment firm Black Diamond Capital Management and alternative asset manager Spectrum Group Management have received a favourable ruling in their long running dispute with Yucaipa in connection with their investment in Allied Systems.
In a written opinion last week, Judge Sue L Robinson of the US District Court in Delaware granted their motion to dismiss a lawsuit asserting claims against the firms under the Racketeer Influenced and Corrupt Organisation Act (RICO) by Yucaipa, finding there was "no plausible basis" for the claims.
Dismissal of the lawsuit is the latest in a series of favourable court rulings for Black Diamond and Spectrum in their litigation with Yucaipa in connection with the Allied Systems bankruptcy case.
Previously, courts have ruled in favour of Black Diamond and Spectrum on significant motions in the litigation at least half a dozen times, including determining and later upholding Black Diamond's and Spectrum's primacy over Yucaipa as so-called requisite lenders, under certain financing agreements provided to Allied Systems.
"We appreciate the court's careful review of this matter and are pleased to have these meritless claims dismissed," says Robert J Ward of law firm Schulte Roth & Zabel, legal representative for Black Dimaond and Spectrum along with Landis Rath & Cobb. "We now look forward to pursuing vigorously the substantial claims that we and Allied's unsecured creditors' committee have asserted against Yucaipa for its actions involving Allied."
