Hughes Hubbard Wins Summary Judgment for Brightwood Capital

Highlights

Won summary judgment dismissing all claims in dispute over ~$253.5M continuation fund transaction.
Court held alleged pre-closing payment was not a material breach and did not cause deal failure.
Secured complete victory following earlier denial of plaintiff’s preliminary injunction.

Hughes Hubbard secured summary judgment for private investment firm Brightwood Capital in litigation brought by specialist credit investor Banner Ridge Partners arising from a roughly $253 million continuation fund transaction.

Banner Ridge filed suit in 2024 in New York Supreme Court, New York County, alleging that Brightwood breached an agreement under which Banner Ridge would invest up to $253.5 million in a continuation vehicle transaction. The vehicle was designed to allow investors in older Brightwood funds either to exit their positions or roll their investments into a new fund.

Banner Ridge claimed, among other things, that Brightwood improperly funded an initial pre-closing payment to selling investors using alternative funding sources, rather than Banner Ridge’s committed capital, and that this conduct breached the parties’ agreement and deprived Banner Ridge the opportunity to participate in the transaction.

The court rejected those claims, holding that the challenged payment was not a material breach and did not cause the transaction to fail. Instead, the court found that a separate commercial issue unrelated to the alleged breach prevented the parties from closing by the contractual deadline, after which Brightwood validly terminated the agreement.

The firm previously defeated Banner Ridge’s motion for a preliminary injunction and, on June 10, prevailed on summary judgment, securing dismissal of all of Banner Ridge’s claims with prejudice.

Fara Tabatabai led the Hughes Hubbard team, which included Dan Weiner and Chuck Samuelson.