The Mizrahi Defendants brought a motion to dismiss or stay the plaintiff's action based on a standstill provision in a Priority, Subordination and Standstill Agreement.
The plaintiff, a subordinated lender for a construction project, sued for $200 million in damages and other relief.
The court found that the plaintiff's claims fell squarely within the standstill provision, which prohibited enforcement actions until senior lenders were repaid.
The court rejected the plaintiff's argument that the enforceability of the agreement was in play, as it was not pleaded.
The action was stayed for 30 days to allow the plaintiff to draft a new statement of claim for claims not covered by the standstill provision, after which the action would be dismissed.