Chadbourne & Parke LLP secured a $20 million victory for its client Greystone Business Credit II, L.L.C. against two subsidiaries of Italian clothing and shoe company Diesel S.p.A. On January 6, the United States Court of Appeals for the Second Circuit unanimously affirmed Diesel’s loss at trial in which U.S. District Judge Harold Baer, Jr. dismissed Diesel’s suit in its entirety.

Diesel’s $20 million claim arose from a failed shoe distribution deal among Diesel Props, Diesel Kid, and California footwear company Global Brand Marketing Inc. (“GBMI”). GBMI was the exclusive distributor of Diesel-brand shoes in the United States. In 2006, GBMI was in severe financial distress and approached Greystone, an asset-based lender, for financing. Greystone extended financing to GBMI which Diesel expected would pay down the $20 million debt GBMI owed to Diesel. When GBMI did not pay, Diesel sued Greystone arguing that Greystone had an obligation to remit funds directly to Diesel. The Second Circuit affirmed the dismissal of all of Diesel’s claims, but reversed Judge Baer’s award of damages to Greystone on one of its counterclaims.

Chadbourne was both trial and appellate counsel to Greystone. The Chadbourne team included litigation partners Oliver J. Armas and Phoebe A. Wilkinson, and associates J. Carson Pulley and Kimberly Zafran.

Circuit Judge Amalya L. Kearse authored the decision.