For the past several years Cleary Gottlieb has been representing most of the holders of convertible bonds issued by an Australian manufacturer of gaming equipment in litigation arising from the issuer’s claim that bondholders’ conversion rights had been terminated. On motions for judgment on the pleadings, the United States District Court for the Southern Court of New York sustained the bondholders’ reading of the indenture and thereafter granted summary judgment as to breach, the date of breach and the right to recover consequential damages for losses incurred on unwinding hedging short positions. The Court ordered trial on the issuer’s affirmative defense of unreasonable failure to mitigate consequential damages, and on October 22, 2009, a jury decided that issue in favor of the bondholders who were seeking consequential damages.
