Second Circuit Affirms District Court’s Decision Determining That Term Loan Notes Were Not “Securities” Subject To Securities Laws And Regulations
09/06/2023
On August 24, 2023, the United States Court of Appeals for the Second Circuit affirmed a decision by the United States District Court for the Southern District of New York dismissing claims brought under state securities laws against a group of banks which acted as arrangers (“Defendants” or the “Arrangers”) for a term loan on behalf of a California-based medical testing company (the “Company”), holding that term loan “notes” issued as part of a syndicated loan were not “securities” subject to securities laws and regulations. Kirschner v. JP Morgan Chase Bank, N.A., et al., 21-2726-cv (2d Cir. Aug. 24, 2023). The Second Circuit also affirmed that the district court had jurisdiction pursuant to the Edge Act.