12-3361-bk
Coreth v. Barclays Capital Inc.

                                  UNITED STATES COURT OF APPEALS
                                      FOR THE SECOND CIRCUIT

                                           SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.
CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS
PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH
THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER
MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

        At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
6th day of March, two thousand thirteen.

Present:
                 PETER W. HALL,
                 DEBRA ANN LIVINGSTON,
                 CHRISTOPHER F. DRONEY,

                                    Circuit Judges.

____________________________________________________

IN RE: LEHMAN BROTHERS HOLDINGS INC.,

                          Debtor.

____________________________________________________

MAXIMILIAN CORETH,

                          Appellant,

        v.                                                          12-3361-bk

BARCLAYS CAPITAL INC.,

                          Appellee.

____________________________________________________


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FOR APPELLANT:                 JONATHAN D. WARNER (George Philip Birnbaum, Law Offices of
                               George Birnbaum, PLLC, New York, NY, on the brief), Warner &
                               Scheuerman, New York, NY.

FOR APPELLEE:           THEODORE O. ROGERS, JR., Sullivan & Cromwell LLP, New York,
                        NY.
____________________________________________________


       Appeal from a judgment of the United States District Court for the Southern District of

New York (Koeltl, J.).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

       Appellant Maximilian Coreth appeals from an Order of the United States District Court

for the Southern District of New York (Koeltl, J.) entered on July 26, 2012, affirming an Order

of the United States Bankruptcy Court for the Southern District of New York (Peck, J.) entered

on March 8, 2011, dismissing pursuant to Fed. R. Civ. P. 12(b)(6) Coreth’s adversary complaint

asserting a claim for breach of contract. We assume the parties’ familiarity with the facts and

procedural history of this case.

       We conduct an “independent and plenary” review of a district court’s affirmation of a

bankruptcy court order. In re Caldor Corp., 303 F.3d 161, 166 (2d Cir. 2002) (internal quotation

marks omitted). Under such review, we accept the bankruptcy court’s factual findings, if any,

unless clearly erroneous, and review its conclusions of law de novo. In re Ades & Berg Grp.

Investors, 550 F.3d 240, 243 n.4 (2d Cir. 2008). We review de novo the court’s dismissal of a

complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). Freedom Holdings,

Inc. v. Spitzer, 357 F.3d 205, 216 (2d Cir. 2004). On reviewing a dismissal pursuant to Rule

12(b)(6), we may consider exhibits to a complaint as a part thereof. Chambers v. Time Warner,

Inc., 282 F.3d 147, 152-53 (2d Cir. 2002).



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           The district court found that Coreth lacked standing to assert his rights under the Asset

Purchase Agreement (“APA”),1 under which Barclays Capital Inc. (“Barclays”) and Lehman

Brothers Holdings Inc. (“Lehman”) agreed that Barclays would purchase assets and assume

certain liabilities of Lehman following Lehman’s voluntary filing for bankruptcy protection.

Coreth was not a signatory to the APA. Section 13.9 (the “negating clause”) of the APA

precludes third parties from asserting any rights under the APA. This section provides as

follows:

           This Agreement shall be binding upon and inure to the benefit of the parties and
           their respective successors and permitted assigns. Nothing in this Agreement shall
           create or be deemed to create any third party beneficiary rights in any Person or
           entity not a party to this Agreement except as provided below. No assignment of
           this Agreement or of any rights or obligations hereunder may be made by either
           [Lehman] or [Barclays] . . . without the prior written consent of the other parties
           hereto . . . , provided that [Barclays] shall be entitled to assign its rights and
           obligations in whole or in part to its Affiliates or to designate its rights to acquire
           any assets hereunder to its Affiliates. No assignment of any obligations hereunder
           shall relieve the parties hereto of any such obligations. Upon any such permitted
           assignment, the references in this Agreement to [Barclays] shall also apply to any
           such assignee unless the context otherwise requires.

Joint Appendix, at 69 (emphasis added).

           Coreth makes two principal arguments on appeal. First, he contends that the clause

“except as provided below,” which creates an exception to the negating clause, is ambiguous as a

matter of law and therefore the district court erred in dismissing the complaint pursuant to Rule

12(b)(6). See Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d

168, 178 (2d Cir. 2004) (noting that a court generally may not dismiss a claim predicated on an

ambiguous contract term). Insofar as Coreth argues that he falls within the exception to the

negating clause, that argument was not raised below, and we therefore decline to consider it on

appeal. See Allianz Ins. Co. v. Lerner, 416 F.3d 109, 114 (2d Cir. 2004) (noting the “well-



1
    The APA was attached to Coreth’s adversary complaint as Exhibit B.
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established general rule that an appellate court will not consider an issue raised for the first time

on appeal” (internal quotation marks omitted)).

        To the extent that Coreth relies on Bayerische Landesbank, New York Branch v. Aladdin

Capital Management LLC, 692 F.3d 42 (2d Cir. 2012), to support his argument that the

exception to the negating clause is ambiguous as a matter of law, we also decline to consider this

argument.2 Even assuming that the clause “except as provided below” is ambiguous and can

reasonably be construed as applying either to the APA in its entirety or to section 13.9 only,

Coreth failed to argue before the bankruptcy court and district court that he falls within that

exception. See Lerner, 416 F.3d at 114. Even if we were to agree with his contention that the

exception is ambiguous, therefore, the fact remains that Coreth cannot claim the benefit of that

exception, and the negating clause precludes his third-party beneficiary status. See India.com,

Inc. v. Dalal, 412 F.3d 315, 321 (2d Cir. 2005) (“Under New York law, the effectiveness of a

negating clause to preclude third-party beneficiary status is well-established . . . .”).

        Second, Coreth argues that “triable issues of fact” exist as to whether unpaid bonus

payments totaling $19.6 million constitute “severance payments” such that Barclays is obligated

to pay him pursuant to Article IX of the APA. This argument is wholly dependent on a

determination that Coreth has standing to assert third-party beneficiary rights under the APA.

Given our determination that Coreth lacks such standing, we need not address this argument.

        We have considered all of Coreth’s remaining arguments and find them to be without

merit. The judgment of the district court is AFFIRMED.

                                                             FOR THE COURT:
                                                             Catherine O’Hagan Wolfe, Clerk




2
 We recognize that Bayerische Landesbank was decided in August 2012, after the district court issued its July 2012
Order dismissing Coreth’s complaint.
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