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Court Rules "Vulture" Fund Has No Right To Sue

Law360 (March 23, 2007, 12:00 AM EDT) -- In a ruling that could dissuade so-called vulture funds from buying the distressed debt of bankrupt companies, a court has found that a single bank has no right to sue against the wishes of other lenders.

The New York Court of Appeals ruled Thursday that Beal Savings Bank had no standing to pursue action for breach of contract against Aladdin Gaming LLC contrary to the will of the majority.

The court affirmed the Manhattan appellate court’s decision, finding a syndicate of lenders, who loaned Aladdin $410...
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