This is an appeal from a summary judgment entered in the United States District Court for the Southern District of New York (Haight, J.) in favor of plaintiff-appellee, Jamie Securities Co. ("Jamie"), on the issue of the liability of defendant-appellant, The Limited, Inc. ("The Limited"), for interest on debentures converted to common stock. Jamie claims that it is entitled to accrued interest, in accordance with the terms of the Debenture and of the Indenture entered into between Jamie and the Trustee for the debenture holders, because the conversion occurred between the interest record date and the interest payment date. Jamie had elected to convert its Securities following a call for redemption that fixed a redemption date falling within the same interval of time. The Limited, issuer of the Securities, contends that the governing instruments make no provision for the payment of accrued interest in the event of conversion after a call for redemption.
Relying on various provisions of the governing instruments, including the Indenture provision for cancellation of surrendered debentures in the event of conversion, and the Debenture provision declaring cancellation of the Securities after the interest record date and before the interest payment date no bar to the payment of interest to those who were registered holders on the record date, the District Court found sufficient grounds for the award of accrued interest to Jamie. See Jamie Securities Co. v. The Limited, Inc., 682 F.Supp. 746 (S.D.N.Y.1988). We read the provisions relied upon by the District Court differently and find that the Indenture and Debenture terms, taken as a whole, unambiguously preclude the payment of any interest on the debentures converted by Jamie. Accordingly, we reverse the judgment entered in favor of plaintiff and certified to this Court for interlocutory review, and remand the matter for entry of final judgment in favor of The Limited.
Miner '56, Roger J., "Jamie Securities Co. v. The Ltd., Inc., 880 F. 2d 1572 - Court of Appeals, 2nd Circuit 1989" (1989). Circuit Court Opinions. 264.