- On April 2, 2025, WMD defeated fraud, breach of contract, and mutual mistake claims against its client Independencia, a union representing baggage handlers for bankrupt Mexican airline AeroMéxico. The claims arose from Independencia’s sale of its bankruptcy claims to Invictus Global Management LLC (“IGM”).
- Background. In April 2021, an SDNY bankruptcy court allowed Independencia’s bankruptcy claims against AeroMéxico, conditioned upon Independencia voting in favor of AeroMéxico’s Chapter 11 plan, an obligation memorialized in an April 22, 2021 order (“Order”). In July 2021, with full knowledge of the Order, IGM bought Independencia’s bankruptcy claims. But IGM then defied the Order and voted against AeroMéxico’s Chapter 11 plan. After some fighting, AeroMéxico allowed IGM to vote any way it deemed appropriate.
- In June 2022, IGM sued Independencia. In late 2023, after some bouncing around, the lawsuit was remanded to the Commercial Division. In June 2024, a new (albeit related) plaintiff— Invictus Special Situations Master I, L.P., a Cayman Islands exempted limited partnership, by and through TREO Vitus GP, LLC (“Invictus”)—was substituted, and filed a second amended complaint alleging fraud, breach of contract, and mutual mistake.
- Motion. WMD moved to dismiss Invictus’s claims on the grounds that Invictus did not and could not plead essential elements of fraud; that the contract claims failed because the addendum was entirely consistent with the Order, so Independencia’s representation that the Order was the only document materially affecting IGM’s rights was true; and that rescission was unavailable because there was no mutual mistake and that, in any event, it was impossible after the plan confirmation to return the parties to the status quo ante. Invictus vigorously opposed WMD’s motion, and the matter was argued by WMD associate Alexandra Spina to Commercial Division Justice Melissa A. Crane on April 1, 2025.
- Decision. In her Decision and Order dated April 2, 2025, Justice Crane agreed with WMD and dismissed all of Invictus’s claims. There could be no fraud claim, because IGM knew that the Order required Independencia to vote for the plan and any reliance on contrary statements would be unreasonable—as well as false, because IGM specifically represented that it had conducted its own investigation and relied on its own advisors. The contract and mutual mistake claims failed because IGM did not plead that the existence of contract between Independencia and AeroMéxico was inconsistent with the Order, and that damages would be unduly speculative and impossible to defend. The Court granted leave to replead.
The WMD attorneys on this matter are:
- Ronald J. Aranoff, Partner
- James N. Lawlor, Partner
- Alexandra C. Spina, Associate
- Jennifer A. Carnovale, Associate
- Zoe R. Cebulash, Admission Pending
The matter is capitioned Invictus Global Mgmt LLC v. Monomoy Capital Partners, LLC, 656887/2022 (Sup. Ct. N.Y. Cnty.)