-252-
Atlantico v. Asland, 745 F. Supp. 962, 967 (S.D.N.Y. 1990) (“It
is well settled that ‘[w]hen the terms of the contract guaranteed
have been changed or the contract, as finally made, is not the
one upon which the surety agreed to become bound, he will be
released.’” (quoting Smith v. Molleson, 42 N.E. 669 (N.Y. 1896);
Lincoln Sav. Bank v. Murphy's Deluxe Limousine Serv., Inc., 556
N.Y.S.2d 102, 103 (App. Div. 1990))); Bier Pension Plan Trust v.
Estate of Schneierson, 74 N.Y.2d 312, 315 (Ct. App. 1989). After
Mr. Kerkorian made his $1.3 billion bid for New MGM, there was a
$79 million shortfall in the amounts available to pay off Credit
Lyonnais. As part of the stock purchase agreement, Mr. Kerkorian
required, as a condition precedent to closing on the sale of New
MGM, that this remaining debt amount be satisfied, canceled, or
extinguished at or before the closing. To effectuate the sale of
New MGM, Credit Lyonnais agreed to release New MGM entirely from
this liability and, in turn, caused MGM Group Holdings to assume
that debt amount.177 This assumption did not occur as a result of
MGM Group Holdings’ guaranty obligations. Instead, MGM Group
177 The debt release and assumption agreement provides:
The Parent [MGM Group Holdings] hereby assumes
principal of the Loans under the Credit Agreement in
the amount of $79,912,955.34 effective as of the date
hereof, immediately prior to the sale of Stock pursuant
to the Stock Purchase Agreement and for all purposes of
the Credit Agreement shall be treated as a Borrower, as
such term is defined under the Credit Agreement and all
references to Borrower shall be deemed to refer to and
include MGM Parent.
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