Ciena, Credit Suisse agree to resolution of $21.06 million claim

By Caroline Salls

Pittsburgh, June 9 - Ciena Capital LLC has reached an agreement with Credit Suisse Securities (USA) LLC to resolve a dispute surrounding a $21.06 million note purchase agreement claim filed against debtor Ciena Capital Funding LLC, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Ciena said Credit Suisse filed the $21.06 million claim on Feb. 12, representing the amount owed to Credit Suisse under the note purchase agreement and attorneys' fees recoverable by Credit Suisse under the purchase agreement.

Before that claim was filed, Ciena had filed a lawsuit against Credit Suisse in an attempt to recover $7 million in alleged fraudulent transfers.

Because of the pending lawsuit, Ciena said it denied all liability to Credit Suisse. In addition, Credit Suisse denied all liability in connection with the lawsuit.

Under the settlement, Credit Suisse will have a $2 million general unsecured claim against Ciena Capital Funding.

However, if Credit Suisse does not receive a cash distribution of at least $1 million on account of the claim within five business days of the effective date of Ciena's plan of reorganization, the amount of the claim will be $21.06 million.

In exchange, Ciena has agreed to the dismissal of the fraudulent transfer lawsuit.

Ciena is a New York-based portfolio company for Allied Capital, a business development company that invests long-term debt and equity capital in middle market businesses. The company filed for bankruptcy on Sept. 30, 2008. Its Chapter 11 case number is 08-13783.

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