Summary
determining that the holder did not properly invoke the right of first refusal because of failure to match "the same terms and conditions contained in the original offer"
Summary of this case from USA Cable v. World Wrestling Federation Entertainment, Inc.Opinion
Argued February 10, 1976
Decided March 23, 1976
Appeal from the Appellate Division of the Supreme Court in the First Judicial Department, SIDNEY A. FINE, J.
James D. Zirin and Richard W. Lyon for appellant.
John J. Loflin and George R. Reid, II, for respondents.
MEMORANDUM.
Appellant contends that it properly exercised the right of first refusal by making a commercially equivalent offer upon the same terms and conditions contained in the original offer. Both offers provided for immediate cash payment of one million dollars and nine million dollars in deferred payments over a 10-year period. In view of the deferred nature of the proposed payments, the manner in which the obligation was to be secured was critical. The collateral in the original offer consisted of a guarantee by Norwest, S.A., a company with an averred net worth of 25 million dollars by its latest audited balance sheet and its most recent unaudited financial reports, not effectively contradicted in the opposing papers. Additionally, the agreement included various limitations on Norwest to prevent any significant divesting of assets. In contrast, appellant's offer was to be secured by a potpourri of notes, mortgages and chattels, which was unsupported by financial disclosure in regular form and without provisions protecting the security offered. The lack of substantiation and the apparent inadequacy of appellant's collateral coupled with the lack of limitations to prevent dissipation make it clear that appellant's offer was not "upon the same terms and conditions" necessary to properly invoke the right of first refusal.
Accordingly, the order of the Appellate Division granting summary judgment to respondent should be affirmed.
Chief Judge BREITEL and Judges JASEN, GABRIELLI, JONES, WACHTLER, FUCHSBERG and COOKE concur.
Order affirmed, with costs, in a memorandum.