Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Americas (727 F. Supp. 2d 256, 2010)

OPINION AND ORDER

LEISURE, District Judge:

Table of Contents

CONCLUSION.......................... ......................................301

Plaintiff, Aristocrat Leisure Ltd. (“Aristocrat”) moves post-trial for an order granting judgment as a matter of law pursuant to Federal Rule of Civil Procedure (“Rule”) 50(b) or, alternatively, for a new trial pursuant to Rule 59. Aristocrat contends that, pursuant to Rule 50(b), no reasonable jury could arrive at a verdict in favor of the intervening defendant Bondholders based on the evidence presented at trial. Alternatively, Aristocrat argues that the Court should order a new trial pursuant to Rule 59 because Bondholders improperly put at issue their counsel’s legal advice without the Court finding waiver of privilege and because the jury instructions and special verdict form were erroneous and prejudicial.

Bondholders move post-trial for an order directing the Clerk of Court to enter partial judgment pursuant to Rule 54(b) on Bondholders’ counterclaims for counter-declaratory relief with respect to the meaning of the Indenture and for breach of contract. Aristocrat opposes Bondholders’ motion for entry of partial judgment on the grounds that the Court should enter final, rather than partial, judgment and that Bondholders’ proposed judgments conflict with the law and overstate damages by approximately $60 million.

The defendant Trustee moves post-trial asking the Court to declare Aristocrat in breach of its obligations under the Indenture to deliver shares to five non-party bondholders and to issue final judgments in favor of each non-party bondholder on the same terms as other similarly situated Bondholders.

For the reasons set forth below, Aristocrat’s motion for judgment as a matter of law pursuant to Rule 50(b) is DENIED. Aristocrat’s alternative motion for a new trial pursuant to Rule 59 also is DENIED. Bondholders’ motion for entry of partial judgment pursuant to Rule 54(b) is DENIED. Bondholders’ claims for violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and for breach of the implied covenant of good faith and fair dealing are DISMISSED WITHOUT PREJUDICE. The Trustee’s motion to enter final judgment for five Non-Party Bondholders is DENIED, pending the exchange of limited discovery described herein. The Court directs the parties to submit joint revised proposed final judgments consistent with this Opinion and Order. Upon receipt of the parties’ joint revised proposed final judgments, the Court shall enter final judgment.

The Court makes the following determinations with respect to the calculation of the Bondholders’ judgments: (1) Aristocrat is entitled to an offset for gains realized by DBAGL, Lehman, and QVT upon closing their short positions; (2) Aristocrat is entitled to an offset for interim trading gains realized by Deephaven, KBC FP, and four of the five KBC AIM funds (ARB, MAC 28, Multi, and OPPS); (3) a pre-judgment interest rate of 7.5% per year applies to the principal payments Aristocrat made to Bondholders under the Receipt and Release Agreements for the period from May 31, 2006, 2006 WL 1493132, through the date each Bondholder signed a Receipt and Release Agreement; (4) for all Bondholders, whether fully hedged, partially hedged, or unhedged, a pre-judgment interest rate of 9% on general damages shall accrue from each Bondholder’s conversion date; (5) Aristocrat is not entitled to an offset for bond interest coupon payments that Aristocrat paid to the Trustee, who paid them into the Court; and (6) post-judgment interest shall be set by the Court pursuant to 28 U.S.C. § 1961(a) upon entry of final judgment.

BACKGROUND

The Court assumes familiarity with the facts and allegations as stated in the Court’s many prior decisions in this action. Plaintiff Aristocrat, a global gaming machine supplier, is incorporated in Australia, with headquarters in Sydney. (Compl. ¶4.) Defendant Deutsche Bank Trust Company Americas (“Trustee”), incorporated in New York with a principal place of business in New York City, defends this action on behalf of all convertible bondholders and is an affiliate of one of the lead underwriters and managers of the bond offer at issue. (Id. ¶ 5; see also Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Ams., No. 04 Civ. 10014, 2006 WL 1493132, at *1, 2006 U.S. Dist. LEXIS 34709, at *3 (S.D.N.Y. May 30, 2006) (Leisure, J.). The intervening defendant bondholders (“Bondholders”), who ówn a substantial majority of the bonds at issue in this case, are various corporations organized in the Delaware, Illinois, New York, England, and the Caribbean. See Aristo crat Leisure, 2006 WL 1493132, at *1, 2006 U.S. Dist. LEXIS 34709, at *3; First Am. Answer & Countercl. of Intervening Defs. (“Bondholders’ Answer & Countercl.”) 2-3.)

This case arises out of Aristocrat’s issuance of US$130,000,000 of 5% convertible bonds, due May 2006, to qualified institutional buyers. Aristocrat filed this suit as a declaratory action on December 20, 2004, alleging that but for a scrivener’s error, Aristocrat would have been able to redeem the bonds on November 22, 2004, its notice and call would have been effective on December 20, 2004, and Aristocrat would have terminated the Bondholders’ right to convert. On March 30, 2005, the Court permitted thirteen Bondholders to intervene as defendants under Rule 24(a), holding that the Trustee could not represent their interests adequately with respect to their counterclaims for counter-declaratory relief and breach of contract because of a risk of “collusion” and “adversity of interest.” Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Ams., No. 04 Civ. 10014, 2005 WL 751914, at *4, 2005 U.S. Dist. LEXIS 5378, at *12 (S.D.N.Y. Mar. 30, 2005) (Leisure, J.). The next day, Bondholders filed a First Amended Answer and Counterclaim, answering Aristocrat’s complaint and asserting counterclaims for: (1) counter-declaratory judgment, (2) damages for violation of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, (3) breach of the implied covenant of good faith and fair dealing, (4) declaratory judgment that Aristocrat is liable for any decline in stock price following an event of default, and (5) damages for breach of contract. (Bondholders’ Answer & Countercl. ¶¶ 31-46.)

By Opinion and Order dated August 12, 2005, this Court found that Aristocrat’s December 20, 2004, communication did not constitute an effective call for redemption, and the Bondholders’ conversion rights were not terminated. See Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Ams., No. 04 Civ. 10014, 2005 WL 1950116, at *6-7, 2005 U.S. Dist. LEXIS 16788, at *20-22 (S.D.N.Y. Aug. 12, 2005) (Leisure, J.). Subsequently, by Opinion and Order dated May 30, 2006, this Court found that Aristocrat is in breach of the Indenture with respect to each Bondholder who submitted evidence to the Court but denied Bondholders’ request for specific performance, holding that monetary damages were sufficient. See Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Ams., No. 04 Civ. 10014, 2006 WL 1493132, at *6, *12, 2006 U.S. Dist. LEXIS 34709, at *22-23, *47 (S.D.N.Y. May 30, 2006) (Leisure, J.).

On April 27, 2009, 2009 WL 1138116, the Court resolved the parties’ motions for summary judgment on damages for Aristocrat’s breach, holding that Bondholders are entitled to general damages for Aristocrat’s breach as of the date that each Bondholder completed the conversion process as defined in the Indenture. Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Ams., 618 F.Supp.2d 280, 293-94, 299 (S.D.N.Y.2009). The Court also determined that Bondholders who hedged their positions in the convertible bonds were entitled to consequential damages as a matter of law in the amount of the difference between the value of the shares on the date of breach and the value of the shares when they were purchased in the open market. Id. at 302-06. The Court was unable to determine as a matter of law the reasonableness of Bondholders’ decisions to hold open their short positions after Aristocrat’s breach, and left this sole issue to be determined by a trier of fact. Id. at 309. Accordingly, a jury trial commenced on October 5, 2009, where the sole disputed issue of fact to be resolved was whether Aristocrat proved its affirmative defense that Bondholders unreasonably failed to mitigate their consequential damages by keeping open their short positions in Aristocrat stock after Aristocrat’s breach of the Indenture.

Prior to trial, the Court resolved the parties’ in limine motions, including Aristocrat’s motion to prevent the Bondholders from introducing evidence suggesting that they received advice of counsel in connection with their decisions to hold open short positions. See Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Ams., No. 04 Civ. 10014, 2009 WL 3111766, at *13-16 (S.D.N.Y. Sept. 28, 2009) (Leisure, J.). Since Bondholders “represented that they will not argue that they relied on privileged advice rendered by counsel in opposing Aristocrat’s claim that their actions were unreasonable,” the Court held that Bondholders would not waive privilege by “introducing evidence suggesting that they received advice of counsel in connection with their decisions to hold open short positions.” Id. at *16. But the Court cautioned Bondholders “not to sidestep [its] ruling by imparting to the jury the actual content of the legal advice provided by counsel, or by arguing that an individual Bondholder’s actions were reasonable because they relied on an opinion of counsel.” Id. The Court explained that “[arguments such as these indeed would put the subject matter of the communication with counsel at issue and would result in a waiver of the privilege.” Id.

At trial, Aristocrat argued that by holding open short positions in Aristocrat stock, Bondholders unreasonably failed to mitigate their consequential damages and that, had Bondholders closed these short positions shortly after Aristocrat’s breach, Bondholders would not have incurred consequential damages. Aristocrat also argued that rather than mitigate losses, Bondholders made a bet on the value of Aristocrat’s stock going down. On October 20, 2009, after the close of the evidence, Aristocrat and Bondholders each moved for judgment as a matter of law pursuant to Rule 50(a) and the Court denied both motions. (Trial Tr. 1630:2-1634:13.) On October 22, 2009, the jury reached a verdict that Aristocrat did not meet its burden of proving its affirmative defense that the Bondholders seeking consequential damages at trial unreasonably failed to mitigate their consequential damages following Aristocrat’s breach of the Indenture. (See Special Verdict Form, dkt. no. 324, question 1.)

Aristocrat now moves post-trial for an Order granting judgment as a matter of law pursuant to Rule 50(b) or, alternatively, for a new trial pursuant to Rule 59. Aristocrat contends that, pursuant to Rule 50(b), no reasonable jury could arrive at a verdict in favor of the Bondholders based on the evidence presented at trial. Alternatively, Aristocrat argues that the Court should order a new trial pursuant to Rule 59 because Bondholders improperly put at issue their counsel’s legal advice without the Court finding waiver of privilege and because the jury instructions and special verdict form were erroneous and prejudicial.

Bondholders move post-trial for an order directing the Clerk of Court to enter partial judgment pursuant to Rule 54(b) on Bondholders’ counterclaims for counter-declaratory relief with respect to the meaning of the Indenture and for breach of contract. Aristocrat opposes Bondholders’ motion for entry of partial judgment on the grounds that the Court should enter final, rather than partial, judgment and that Bondholders’ proposed judgments conflict with the law and overstate damages by approximately $60 million.

The Trustee moves post-trial asking the Court to declare Aristocrat in breach of its obligations under the Indenture to deliver shares to five non-party bondholders and to issue final judgments in favor of each non-party bondholder on the same terms as other similarly situated Bondholders.

The Court first addresses Aristocrat’s motion for judgment as a matter of law under Rule 50(b) and Aristocrat’s alternative motion for a new trial pursuant to Rule 59. Next, the Court addresses Bondholders’ motion to enter partial judgment under Rule 54(b). Finally, the Court addresses the Trustee’s motion for declaratory judgment and entry of final judgment with respect to five non-party bondholders.

DISCUSSION

I. Aristocrat’s Rule 50(b) Motion for Judgment as a Matter of Law and Alternative Rule 59 Motion for a New Trial

A. Motion for Judgment as a Matter of Law

Aristocrat moves for judgment as a matter of law pursuant to Rule 50(b) on the grounds that no reasonable jury could have arrived at a verdict in favor of Bondholders based on the evidence presented at trial. The Court first addresses the legal standard under Rule 50(b) and then analyzes the sufficiency of the evidence presented at trial.

1. Legal Standard Under Rule 50(b)

Rule 50(b) provides that “[i]f the court does not grant a motion for judgment as a matter of law” after a party has been heard fully at trial, that party “may file a renewed motion for judgment as a matter of law and may include an alternative or joint request for a new trial under Rule 59.” Fed.R.Civ.P. 50(b). The Court may properly grant a motion for judgment as a matter of law under Rule 50(b) “only if there is ‘such a complete absence of evidence supporting the verdict that the jury’s findings could only have been the result of sheer surmise and conjecture, or such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded [persons] could not arrive at a verdict against [the moving party].’ ” Stratton v. Dep’tfor the Aging for the City of N.Y., 132 F.3d 869, 878 (2d Cir.1997) (quoting LeBlanc-Sternberg v. Fletcher, 67 F.3d 412, 429 (2d Cir.1995) (Kearse, J.)); see also Weissman v. Dawn Joy Fashions, Inc., 214 F.3d 224, 233 (2d Cir.2000); Galdieri-Ambrosini v. Nat’l Realty & Dev. Corp., 136 F.3d 276, 289 (2d Cir.1998) (Kearse, J.). In deciding a Rule 50(b) motion, “a district court is required to ‘consider the evidence in the light most favorable to the party against whom the motion was made and to give that party the benefit of all reasonable inferences that the jury might have drawn in his favor from the evidence.’ ” LeBlanc-Sternberg, 67 F.3d at 429 (quoting Smith v. Lightning Bolt Prods., Inc., 861 F.2d 368, 367 (2d Cir.1988)). “Judgment as a matter of law may not properly be granted under Rule 50 unless the evidence, viewed in the light most favorable to the opposing party, is insufficient to permit a reasonable juror to find in her favor.” Galdieri-Ambrosini, 136 F.3d at 289. “[T]he court must give deference to all credibility determinations and reasonable inferences of the jury, and it may not itself weigh the credibility of witnesses or consider the weight of the evidence.” Id.

2. Sufficiency of the Evidence

Aristocrat argues that it is entitled to judgment as a matter of law because the jury’s verdict was not supported by the evidence. The Court’s review of the record indicates that there is substantial evidence in support of the verdict.

Aristocrat contends that it is inherently unreasonable for the Bondholders to have held their short positions open with the expectation of receiving shares of Aristocrat stock from this Court while at the same time expressly disclaiming reliance on advice of counsel. (See Aristocrat’s Mot. for J. as a Matter of Law or, Alternatively, for a New Trial (“Aristocrat’s Mem.”) 1.) Aristocrat further argues that the remaining reasons for holding open the Bondholders’ short positions “lack any objective basis in the record and do not, as a matter of law, justify the Bondholders’ failure to mitigate their consequential damages.” (Id.) The Court disagrees with Aristocrat and holds that the evidence, viewed in a “light most favorable” to Bondholders, is sufficient “to permit a reasonable juror to find in [Bondholders’] favor.” Galdieri, 136 F.3d at 289.

At trial, Bondholders offered extensive testimony about their respective actions following Aristocrat’s breach of the Indenture. Bondholders provided a number of reasons for keeping open their short positions, which may be grouped in the following categories: (1) they had been promised shares and it made no sense both to ask the Court for shares and buy them in the market; (2) they thought that Aristocrat might deliver the shares if the Court interpreted the Indenture in Bondholders’ favor; (3) closing the short positions without waiting for shares to be delivered would cost millions of dollars and incurring this expense would expose Bondholders to Aristocrat’s credit risk; and (4) closing short positions following Aristocrat’s breach would cause a “short squeeze” in the marketplace and increase the amount of money Bondholders needed to spend to purchase Aristocrat’s shares. (See Intervening Defs.’ & Countercl. Pis.’ Mem. of Law in Opp’n to Aristocrat’s Mot. for J. as a Matter of Law or, Alternatively, for a New Trial (“Bondholders’ Opp’n”) 19.) This evidence, viewed in a light most favorable to Bondholders, is sufficient to permit a reasonable jury to conclude that Bondholders’ actions in maintaining their short positions did not constitute an unreasonable failure to mitigate consequential damages.

First, Bondholders testified at trial that they did not close their short positions because they had been promised shares and it made no sense both to ask the Court for shares and buy them in the market. Aristocrat contends that Bondholders’ belief that the Court might award specific performance was unreasonable as a matter of law because Bondholders did not assert reliance on legal advice at trial. (See Aristocrat’s Mem. 4-6.) Prior to trial, this Court determined that seeking specific performance was not inherently unreasonable. See Aristocrat Leisure, 618 F.Supp.2d at 309 (“This Court is not persuaded that seeking specific performance is inherently unreasonable. Neither the parties nor this Court have found any case law that suggests that a chosen litigation strategy is unreasonable because that argument fails.”). In arguing that Bondholders’ belief that the Court might award specific performance is unreasonable where these Bondholders do not assert reliance on legal advice, Aristocrat cites Goldman v. Commissioner of Internal Revenue, 39 F.3d 402 (2d Cir.1994), and its progeny. (See Aristocrat’s Mem. 5-6 (discussing Addington v. Comm’r of Internal Revenue, 205 F.3d 54 (2d Cir.2000) (Sotomayor, J.); David v. Comm’r of Internal Revenue, 43 F.3d 788 (2d Cir.1995); Goldman v. Comm’r of Internal Revenue, 39 F.3d 402 (2d Cir.1994)).) The question in these cases (and two cases that Aristocrat cites from other jurisdictions) is whether a party can rely on an affirmative defense, to which it has the burden of proof, of reliance on professional advice where the advice was not rendered by qualified experts. See Addington, 205 F.3d at 57-59 (rejecting taxpayers’ appeal of negligence penalties because taxpayers’ tax advisor, upon whom taxpayers relied, was not familiar with the plastics industry, rendering taxpayers’ “reliance on [him] ... objectively unreasonable”); David, 43 F.3d at 789 (rejecting taxpayers’ appeal of negligence penalties because “[n]one of the ... accountants [upon whom taxpayers relied] was a knowledgeable participant in the oil and gas business”); Goldman, 39 F.3d at 408 (denying taxpayers’ appeal of a negligence penalty and holding that, “[w]hile reliance on professional advice can, in certain circumstances, provide a defense to a negligence penalty,” a taxpayer’s “[r]eliance on expert advice is not reasonable where the ‘expert’ relied on knows nothing about the business in which the taxpayer invested”); Freytag v. Comm’r of Internal Revenue, 904 F.2d 1011, 1017 (5th Cir.1990) (affirming tax court’s determination that taxpayers failed to discharge their burden to prove absence of negligence in taking certain deductions where taxpayers “relied upon the advice of their ‘finders,’ who apparently had no expertise whatsoever in the financial aspects of the portfolios involved”); Tallent v. Liberty Mut. Ins. Co., No. Civ. A.1997-1777H, 2005 WL 1239284, at *12-13, 19 (Mass.Super.Ct. Apr. 22, 2005) (holding that defendant unreasonably failed to settle a claim in violation of a Massachusetts statute governing unfair or deceptive business practices in the insurance industry where defendant’s reliance on advice of counsel defense “was unreasonable” because the advice came from attorneys who lacked experience and objectivity to advise defendant properly). Aristocrat insists that any distinction between these cases and the instant case “is meaningless” because “[t]he controlling principle in these cases is that, as a matter of law, a person cannot reasonably believe that it is prudent to undertake a course of action — the success of which turns on resolution of a legal issue about which he lacks legal expertise — without relying on legal advice.” (Aristocrat’s Reply Mem. of Law in Supp. of Its Mot. for J. As a Matter of Law Or, Alternatively, For a New Trial (“Aristocrat’s Reply”) 3.) The Court rejects Aristocrat’s interpretation of the “controlling principle” of these cases. These cases do not stand for the proposition that “a person cannot reasonably believe that it is prudent to undertake a course of action — the success of which turns on resolution of a legal issue about which he lacks legal expertise — without relying on legal advice.” (Id.) Rather, they stand for the proposition that it is unreasonable to rely on expert advice where the purported expert lacks knowledge about the subject matter underlying the advice. See Addington, 205 F.3d at 58 (“In general, it is unreasonable to rely on an advisor who lacks knowledge about the industry in which the taxpayer is investing.”); David, 43 F.3d at 789-90 (“In Goldman, we held that ... taxpayers’ reliance on expert advice is not reasonable where the ‘expert’ lacks knowledge of the business in which the taxpayers invested.” (citing Goldman, 39 F.3d at 407-08 (holding that tax expert lacked expertise in the oil and gas industry))). The Court holds that because this action does not involve the question of whether Bondholders’ counsel was qualified to render advice on specific performance, Goldman and its progeny has no bearing on this case. Therefore, Bondholders’ belief that the Court might award specific performance was not unreasonable as a matter of law merely because Bondholders did not assert reliance on legal advice at trial.

Second, Bondholders believed that Aristocrat might change its mind and deliver conversion shares if the Court interpreted the Indenture in Bondholders’ favor. (Trial Tr. 538:7-18, 645:6-20, 697:15-698:3). A number of Bondholders as well as Bondholders’ expert, Professor Charles Jones, testified that it was in Aristocrat’s best interest to change its mind and deliver shares to preserve Aristocrat’s reputation and ability to raise funds in the capital markets. (See Bondholders’ Opp’n 20; Trial Tr. 539:5-11, 854:13-17, 921:1-11, 1292:9-23, 1334:1-9.) Accordingly, a reasonable factfinder could find that Aristocrat genuinely was seeking a clarification of its rights under the Indenture and, if its understanding of the Indenture were incorrect, would deliver shares to Bondholders. (See Bondholders’ Opp’n 21.) Aristocrat relies heavily on Drummond v. Morgan Stanley & Co., Inc., No. 95 Civ. 2011, 1996 WL 631723 (S.D.N.Y. Oct. 31, 1996) (Chin, J.), in support of its argument that “no reasonable person could have thought [Aristocrat] would simply change its mind and deliver shares.” (Aristocrat’s Mem. 7 (citing Drummond, 1996 WL 631723, at *3 (“[W]hen Morgan Stanley did not respond promptly, plaintiff should have realized that Morgan Stanley was not going to change its mind.”)).) In Drummond, Morgan Stanley breached its obligation to purchase a $50 million collateralized mortgage obligation (“CMO”) from plaintiff. See Drummond v. Morgan Stabley & Co., Inc., No. 95 Civ.2011, 1997 WL 266982, at *1 (S.D.N.Y. May 20, 1997) (Chin, J.) (reciting the Court’s findings of fact 'and conclusions of law). On February 23, 1994, plaintiff sold a $50 million face value CMO to Morgan Stanley for an agreed-upon price of $50,375,000. Id. The next day, Morgan Stanley claimed that it made a mistake in calculating the value of the CMO in formulating its bid, but would be willing to purchase the CMO for $49,687,500. Id. Plaintiff rejected Morgan Stanley’s reduced bid, id., and declined offers from other bidders, eventually selling the CMO six months later for approximately $46.1 million. Drummond, 1996 WL 631723, at *2. Prior to a bench trial, the Court granted Morgan Stanley’s motion for summary judgment on the issue of mitigation of damages, holding that plaintiff failed to mitigate his general damages as a matter of law by waiting six months to sell his CMO after Morgan Stanley can-celled the contract. Id. at *1-2. The plaintiff in Drummond had argued that a factual dispute existed with respect to what period of time would have been reasonable for him to wait before selling his CMO because a factfinder could conclude that six months was reasonable based on plaintiffs belief that Morgan Stanley would honor its contract and rescind the cancellation, given the company’s reputation for excellence and integrity. Id. at *2. The Court rejected this argument, holding that, “[e]ven assuming that plaintiff did believe that Morgan Stanley would rescind the cancellation, this would not be sufficient to raise a material issue of fact for trial, for a reasonable factfinder could only conclude that six months was not a reasonable period of time for plaintiff to wait” because “plaintiff should have realized that Morgan Stanley was not going to change its mind.” Id. at *3.

Drummond is not dispositive of the question here — whether it was reasonable for Bondholders to think that Aristocrat would change its mind and deliver shares. The Court previously held that — under the facts of this case — mitigation of consequential damages cannot be decided as a matter of law. See Aristocrat Leisure, 618 F.Supp.2d at 308 (“The Court holds that [the parties’] competing interpretations of reasonable action must be left for the trier of fact, and therefore the Court denies summary judgment on the mitigation issue.”) The Court addressed Drummond in its April 27, 2009 decision, stating that, “[ujnlike in Drummond, where the plaintiff rejected several bids to purchase the bonds at issue after the defendant breached the contract, here the relevant investment decisions] to hedge the convertible bonds were made before Aristocrat’s breach.” Id. at 309 n. 31. Aristocrat acknowledges this distinction but insists that the Bondholders “made clear at trial [that] the relevant investment decisions were [Bondholders’] decisions not to cover — a choice they repeatedly made after [Aristocrat’s] breach.” (Aristocrat’s Reply 2 (citing Trial Tr. 1425:18-21 (Peter Rice), 1469:16-21 (Vadim Iosilevich)).) While certain Bondholders testified at trial that they “made a choice to continue [a] short,” Trial Tr. 1469:16-17, this “choice” is not analogous to the investment decisions faced by the plaintiff in Drummond, who received offers to purchase his CMO from several bidders, including the breaching party. See Drummond, 1997 WL 266982, at *1. Also unlike Drummond, in which the victim of the breach initiated the action seeking damages for breach of contract, id., the instant case was initiated by Aristocrat for a declaration from the Court regarding Aristocrat’s ability to call the bonds under the Indenture. (See Compl. ¶ 3.) It was reasonable, therefore, for a factfinder to conclude that, upon the Court’s adjudication, Aristocrat would conform its conduct to the Court’s ruling.

Third, a fair-minded person also may find that Bondholders were reasonable in wanting to keep open their short positions to avoid exposure to Aristocrat’s credit risk. (Bondholders’ Opp’n 21.) Aristocrat’s argument that it did not pose a credit risk is contradicted by the record. Aristocrat’s junk-level credit rating throughout the relevant time period could lead a reasonable factfinder to believe that awaiting payment from Aristocrat presented a credit risk to Bondholders. (Trial Tr. 1214:5-1216:21, 1289:17-1290:4, 1304:16-1306:11, 1367:9-21.) Aristocrat’s own expert, David J. Ross, acknowledged during the trial that the rating agency, Standard & Poor’s, defines a company with Aristocrat’s credit rating as being one that “faces major ongoing uncertainties for exposure to adverse business, financial or economic conditions, which could lead to the obligors’ inadequate capacity to meet its financial commitment in the obligation.” (Trial Tr. 1216:13-19.)

Fourth, the record provides evidence from Professor Jones that had Bondholders purchased shares in the market to close their short positions shortly after Aristocrat breached the Indenture, as Aristocrat suggests they should have done to mitigate consequential damages, share prices would have increased substantially, causing a short squeeze in the market. (Trial Tr. 1288:6-1289:3, 1292:24-1296:12, 1298:11-1301:14.) Although Aristocrat’s expert testified that Aristocrat share prices would not have risen dramatically-had Bondholders closed their short positions in a commercially reasonable manner after Aristocrat’s breach of the Indenture, (Trial Tr. 1059:3-1061:10, 1105:5-1108:2, 1218:17-1223:24, 1225:25-1229:19), the jury was entitled to not credit this testimony and, instead, credit the testimony of Bondholders’ expert, who testified that Aristocrat share prices would have risen “by 10 or 15 percent” had Bondholders closed their short positions consistent with Aristocrat’s suggestion (Trial Tr. 1295:12-12 96:12, 1298:16-19). See Cayuga Indian Nation of N.Y. v. Pataki, 83 F.Supp.2d 318, 328 (N.D.N.Y.2000) (stating that after a district court admits expert testimony under Daubert, “it is ‘for the jury to decide which, if either, expert witnesses’ testimony it [chooses] to accept.’ ”) (quoting Trumps v. Toastmaster, Inc., 969 F.Supp. 247, 253 n. 7 (S.D.N.Y.1997)); Trial Tr. 1817:19-21, 1818:11-14 (instructing the jury that, “[y]ou may give the expert opinion testimony whatever weight, if any, you find it deserves in light of all the evidence in this case,” and that “[y]ou may reject the testimony of any expert opinion witness in whole or in part if you conclude the reasons given in support of an opinion are unsound or if you for other reasons do not believe the witness”).

In light of the record, the Court finds that the jury’s verdict was supported by substantial evidence and Aristocrat’s motion for judgment as a matter of law must be denied.

B. Motion for a New Trial

In the alternative, Aristocrat moves for a new trial pursuant to Rule 59 on two grounds. First, Aristocrat contends that it is entitled to a new trial because Bondholders improperly placed their legal advice at issue, thereby waiving attorney-client privilege. Second, Aristocrat claims that it is entitled to a new trial because the jury instructions and the special verdict form were erroneous and prejudicial. The Court addresses each argument in turn, after providing the applicable legal standard.

1. Legal Standard Under Rule 59

“In contrast to a motion for judgment as a matter of law, a motion for a new trial pursuant to [Rule] 59 may be granted ... although there is evidence to support the jury’s verdict, so long as the district court determines that, in its independent judgment, ‘the jury has reached a seriously erroneous result or [its] verdict is a miscarriage of justice.’ ” Nimely v. City of N.Y., 414 F.3d 381, 392 (2d Cir.2005) (quoting Munafo v. Metro. Transp. Auth., 381 F.3d 99, 105 (2d Cir.2004)). In deciding a motion for a new trial, “the district court [is] free to examine the evidence through its own eyes.” Meloff v. N.Y. Life Ins. Co., 240 F.3d 138, 147 (2d Cir.2001). “While the Court need not necessarily weigh the evidence in the light most favorable to the non-moving party, disagreement with the verdict alone is insufficient to justify ordering a new trial.” Muller v. Costello, 997 F.Supp. 299, 302 (N.D.N.Y.1998).

2. Advice of Counsel

Aristocrat claims that Bondholders waived attorney-client privilege in two respects. First, Aristocrat claims that certain Bondholders’ testimony placed at issue their beliefs concerning a legal question on which they received legal advice. (See Aristocrat’s Mem. 12-16) Second, Aristocrat claims that statements made by Bondholders’ counsel placed the content of legal advice at issue. (Id. 17-19.) The Court provided the jury with a limiting instruction that addressed the issue of reliance on legal advice. (See Trial Tr. 876:14-877:6, 1798:17-1799:4, 1821:4-17.) Aristocrat claims that Bondholders’ waiver of attorney-client privilege was not cured by the Court’s limiting instruction, and that Aristocrat is entitled to a new trial to have a fair opportunity “to test the Bondholders’ claimed belief that the Court would award them shares.” (Id. 20.)

a. Applicable Law

An implied waiver of attorney-client privilege may occur “ ‘when a client testifies concerning portions of the attorney-client communication, ... when a client places the attorney-client relationship directly at issue, ... and when a client asserts reliance on an attorney’s advice as an element of a claim or defense.’ ” In re County of Erie, 546 F.3d 222, 229 (2d Cir.2008) (quoting Sedeo Int’l, S.A. v. Cory, 683 F.2d 1201, 1206 (8th Cir.1982)). Determining whether a party has waived attorney-client privilege involves questions of fairness, and must be addressed “ ‘on a case-by-case basis, and depends primarily on the specific context in which the privilege is asserted.’ ” Erie, 546 F.3d at 229 (quoting In re Grand Jury Proceedings, 219 F.3d 175, 183 (2d Cir.2000)); see also United States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir.1991) (“[Privilege may implicitly be waived when defendant asserts a claim that in fairness requires examination of protected communications.”).

As discussed in this Court’s September 28, 2009 decision, the Second Circuit’s decision in In re County of Erie is particularly relevant to the parties’ dispute. See Aristocrat, 2009 WL 3111766, at *15-16. In Eñe, the Second Circuit criticized the test for at issue waiver first articulated in Hearn v. Rhay, 68 F.R.D. 574 (E.D.Wash.1975), as cutting “too broadly” and held that, contrary to what may have been articulated by Hearn, “[a] mere indication of a claim or defense certainly is insufficient to place legal advice at issue.” Erie, 546 F.3d at 229. Rather, for an at issue waiver to occur, “a party must rely on privileged advice from his counsel to make his claim or defense.” Id. (emphasis in original); see also Green v. Beer, No. 06 Civ. 4156, 2010 WL 2653650, at *6 (S.D.N.Y. July 2, 2010) (finding no at issue waiver where the legal advice in dispute “is no doubt relevant” to the parties’ claims, but where the parties “are not relying on that advice to demonstrate the reasonableness of their decision”); United States v. Ghailani, — F.Supp.2d -, -, 2010 WL 1633012, at *2 (S.D.N.Y. Apr. 26, 2010) (Kaplan, J.) (referring to the requirement that a party rely on the privileged communication as a claim or defense as “the critical point” in deciding whether an at issue waiver has occurred); Nycomed U.S. Inc. v. Glenmark Generics Ltd., No. 08 Civ. 5023, 2009 WL 3334365, at *1 (E.D.N.Y. Oct. 14, 2009) (“As per Second Circuit jurisprudence, the key to a judicial finding of an implied waiver ‘is some showing by the party arguing for a waiver that the opposing party relies on the privileged communication as a claim or defense or as an element of a claim or defense.’ ” (quoting Erie, 546 F.3d at 228)). The Second Circuit declined, however, to specify in Eñe the degree to which a party must rely on privileged advice before waiver of attorney-client privilege is found. See Erie, 546 F.3d at 229.

b. Aristocrat’s Arguments

Aristocrat contends that Bondholders impliedly waived attorney-client privilege by introducing evidence concerning “their subjective beliefs on [the] innately legal question” of whether Bondholders would receive shares. (Aristocrat’s Reply 5.) Aristocrat therefore argues that “[t]he trial of this matter was fundamentally unfair,” and a new trial must be ordered, “because [Aristocrat] was denied any opportunity to test either the basis for the Bondholders’ claimed belief or whether they actually followed the advice they were given.” (Id.)

Aristocrat contends that Bondholders— both through statements made by fact witnesses and arguments made by counsel-waived attorney-client privilege at trial. Aristocrat points to the testimony of Bondholders’ first witness, Matthew Nunn, Deephaven’s corporate representative, as evidence that a waiver occurred, as Nunn’s testimony “plainly signaled to the jury that [Bondholders] had received legal advice supporting their litigation position.” (Aristocrat’s Mem. 15.) On examination by counsel for Aristocrat, Nunn was asked if “after [the] initial determination by you [that Aristocrat had a strong case], you changed your mind many times about how this [case] would come out in the courts, didn’t you?” (Trial Tr. 423:2-7.) Nunn answered in the affirmative and stated that “[t]here was a period of discovery for me, by which lots of, you know, quite a few days, where I, you know, got to understand an awful lot of things that, you know, legal type things that I didn’t previously understand. We took legal advice, I spoke to inhouse lawyers, and that process led me to change my mind, that’s correct.” (Trial Tr. 423:10-15.)

Immediately after this testimony, the Court held a sidebar conference where counsel for Bondholders acknowledged that Nunn “stepped over the line” in responding to Bondholders’ questioning. (Trial Tr. 424:19.) The Court suggested that a jury instruction may be appropriate to address Nunn’s testimony, but that to instruct the jury on this issue in the middle of Nunn’s testimony would “blow [the issue] out of proportion.” (Trial Tr. 424:24-425:2.) Nunn then was cautioned by counsel for Aristocrat and counsel for Bondholders out of the hearing of the jury, and the Court explained to the jury that the witness was being cautioned by counsel because “there are certain things that should not be said during the trial because they could be prejudicial to one side or the other.” (Trial Tr. 426:12-23.)

During subsequent examination by Bondholders, Nunn was asked to describe “the collective judgment [that was] ultimately reached” concerning whether Deephaven, Nunn’s employer, had a right to convert the bonds. (Trial Tr. 457:15.) Nunn testified that “[t]he collective judgment was that we had a very good case ... we felt that we still had a right to convert.” (Trial Tr. 457:16-19.) Nunn concluded that “we felt that we were entitled to shares, and we felt that we would get shares.” (Trial Tr. 458:17-18.) Aristocrat claims that this testimony, and the testimony of other Bondholders that “echoed Mr. Nunn’s testimony,” constituted a waiver of the attorney-client privilege by placing the basis for Nunn’s beliefs at issue. (Aristocrat’s Mem. 16 n. 34.)

Aristocrat also contends that Bondholders’ counsel made statements during the course of trial that waived attorney-client privilege. (See Aristocrat’s Mem. 17-19.) The disputed statements include references made by Bondholders’ counsel pertaining to counsel’s belief that Bondholders would receive shares as specific performance, (Trial Tr. 475:6-16 (“[O]nce we go through th[e] door [of the reasonableness of the legal positions of both sides], I would have a lot to say about why I thought we were right”)); statements made by Bondholders’ counsel that referred to Bondholders’ arguments in the first person, (Trial Tr. 302:10-15 (“[W]e said because of the unusual situation, ... because it would be unfair to make us go into the market and buy all these shares ... we felt that we should ... get specific performance. We should get the shares, because that’s what we were promised. That’s the argument we made.”)); and statements that either gave the impression that the Court confirmed that Bondholders had received sound legal advice or reinforced the implication that Bondholders’ belief that they would receive shares rested on legal advice, (Trial Tr. 317:12-15 (“And the evidence, I submit, will show you [Bondholders] all thought Aristocrat was wrong. They were entitled to shares. They hired a lawyer to present their case, and you can guess who that lawyer was.”), 1744:25-1745:18 (“I’m going to talk about what Judge Leisure said the law was.... He said, [specific performance is] a question that rests with the sound discretion of the Court.... He can’t point to a case to say how it’s going to come out”)).

Taken as a whole, Aristocrat asserts that Bondholders waived attorney-client privilege and that this waiver was neither curable nor harmless. (See Aristocrat’s Mem. 12-19.) Aristocrat argues that “the picture painted by the Bondholders at trial that they firmly believed they would get shares is likely a gross distortion of the legal advice they received,” and that it is entitled to a “fair opportunity to take discovery of the legal advice the Bondholders received” and use it during a new trial “to test the Bondholders’ claimed belief that the Court would award them shares.” (Id. 199-20.)

c. Bondholders’Arguments

In opposition to Aristocrat’s argument that Bondholders waived attorney-client privilege, Bondholders argue that “ ‘reliance on privileged advice in the assertion of the claim or defense’ is the ‘essential element of a claim of waiver’ ” and that “Bondholders never asserted that their pursuit of specific performance was reasonable because they relied on legal advice.” (Bondholders’ Opp’n 10-12 (quoting Erie, 546 F.3d at 229).) Bondholders also contend that Aristocrat’s argument of implied waiver is in conflict with an agreement reached between the parties whereby “the parties agreed that each party would be able to tell the jury that it consulted with lawyers, and that ‘it thought it would win the litigation,’ but would not be permitted to explain the ‘whys and wherefores’ for this belief.” (Id. at 11; see also Aristocrat, 2009 WL 3111766, at *15 (finding that the agreement at issue “was intended to preclude either party from delving into the reasonableness of the other side’s belief that they would win the underlying litigation, rather than to preclude either party from stating that they consulted with counsel in the course of forming their opinions about the likely outcome of this case”).)

In addressing the claim that statements made by individual Bondholders during trial caused a waiver of attorney-client privilege, Bondholders admit that Nunn’s testimony may have “stepped over the line.” (Bondholders’ Opp’n 13.) However, Bondholders claim that this error was addressed quickly and effectively by the Court, in a manner that was not objected to by Aristocrat. (See id.) Bondholders argue that none of the statements made by Bondholders’ counsel implicated a waiver of attorney-client privilege and even if Bondholders “put legal advice at issue inadvertently, any potential prejudice to Aristocrat was cured by the special instruction on this topic.” (Id. at 16.) The special curative instruction was written with input from Bondholders and Aristocrat, and was delivered by the Court to the jury on three separate occasions. (See Trial Tr. 491:3-12, 799:20-800:7, 800:23-802:16, 859:8-862:25, 873:15-20, 874:12-875:4, 876:14-877:6, 1798:17-1799:4, 1821:4-17.)

d. Analysis

The Court first addresses Aristocrat’s argument that Bondholders’ testimony at trial, and statements made by Bondholders’ counsel, caused a waiver of attorney-client privilege. The Court then addresses the effect of the special jury instruction on any potential prejudice.

Aristocrat has not shown that Bondholders, or Bondholders’ counsel, waived attorney-client privilege at trial. Testimony by Bondholders that they consulted with attorneys in the course of this case, does not, in and of itself, place the content of those communications at issue. Rather, as explained both supra and in this Court’s in limine ruling on this issue, the Bondholders must rely on privileged advice for waiver to be found. See Aristocrat, 2009 WL 3111766, at *16. The Court agrees with Aristocrat that whether a party has waived attorney-client privilege involves questions of fundamental fairness; but notions of equitable fairness cannot be used as a substitute for the lack of the essential element of reliance on privileged communications. (See Aristocrat’s Mem. 12; see also Ghailani, — F.Supp.2d at -, 2010 WL 1633012, at *2 (“[Privilege is waived where a party affirmatively puts its attorney’s advice (or other privileged communication) at issue. But the critical point is that a party claiming an implied or at issue waiver must make ‘some showing ... that the opposing party relies on the privileged communication as a claim or defense or as an element of a claim or defense.’ ” (quoting Erie, 546 F.3d at 228)).) The testimony of Bondholders, with the exception of a portion of Nunn’s testimony that is addressed below, does not implicate reliance on advice of counsel.

Similarly, Aristocrat has not demonstrated that any statements made by counsel for Bondholders caused a waiver of the attorney-client privilege. Much of Aristocrat’s argument on this issue is focused on statements by Bondholders’ counsel that Bondholders believed they were justified in seeking shares of Aristocrat stock. (See Trial Tr. 317:12-15, 457:15-20, 1728:3-5; Aristocrat’s Mem. 17-18.) Statements such as these are well within the scope of the December 11, 2006, agreement between the parties. See Aristocrat, 2009 WL 3111766, at *14-15 (stating that the agreement between the parties provides that Bondholders would be able to state at trial that “some of the bondholders hedged their position based on their estimate of the outcome of the litigation”). Even if these statements were not within the scope of the December 11, 2006, agreement between the parties, the described belief that Bondholders were entitled to shares was not linked directly to legal advice. Rather, as discussed in section I.A.2. supra, Bondholders testified to numerous reasons — free from any claim of reliance on legal advice — why they believed Aristocrat was likely to offer shares. (See Bondholders’ Opp’n 19 (summarizing that (1) Bondholders thought Aristocrat might deliver shares if the Court interpreted the Indenture in Bondholders’ favor, (2) closing the short positions without waiting for shares to be delivered would cost millions of dollars, (3) incurring this expense would expose Bondholders to Aristocrat’s credit risk, (4) receiving shares was important to the realization of return under Bondholders’ convertible arbitrage strategy, and (5) closing short positions following Aristocrat’s breach would cause a “short squeeze” in the marketplace and increase the amount of money Bondholders needed to spend to purchase Aristocrat’s shares).)

Aristocrat’s remaining arguments concerning statements made by Bondholders’ counsel are unavailing. First, both Aristocrat and Bondholders read from portions of this Court’s prior opinions in this case to support their respective positions concerning the reasonableness of Bondholders’ actions. (See Trial Tr. 474:12-18, 1744:19-1745:18.) In reading portions of this Court’s opinions, Bondholders’ counsel did not reference privileged legal advice. Second, Aristocrat is correct that in certain circumstances it can be problematic for an attorney to refer to his or her client’s arguments in the first person. See, e.g., Autowest, Inc. v. Peugeot, Inc., 434 F.2d 556, 568 (2d Cir.1970). Aristocrat, however, provides no support for the argument that the use of the first person tense creates the type of broad waiver of privilege sought here. Finally, Bondholders’ counsel’s statement that, were “the issue of the reasonableness of the legal positions of both sides” to be addressed, he “would have a lot to say about why [he] thought [Bondholders] were right,” was directed at arguments made by counsel in legal briefs, and was not, when read in context, a clear statement of counsel’s own personal beliefs. (See Trial Tr. 475:2-18.) Furthermore, at trial, Aristocrat agreed that Bondholders’ counsel’s statements were inadvertent, (Trial Tr. 488:10-18), and, after both sides were heard on the issue, the Court concluded that a curative jury instruction should be given to address the issue. (Trial Tr. 491:1-13.) Given the nature and limited scope of Bondholders’ counsel’s inadvertent comments, and the curative instruction that followed, the Court declines to find that a waiver of attorney-client privilege occurred.

Aristocrat’s most persuasive argument is that Nunn waived the attorney-client privilege when, in response to questions concerning the strength of Aristocrat’s legal arguments, he agreed that he “changed [his] mind many times about how this [case] would come out in the courts” and that he “took legal advice, ... spoke to in-house lawyers, and that process led [him] to change [his] mind.” (Trial Tr. 423:5-15.) While the Court agrees that Nunn’s testimony may have “stepped over the line” (see Bondholders’ Mem. 13), the Court also agrees with Bondholders that the special jury instruction provided to the jury on three separate occasions cured any potential prejudice to Aristocrat.

On three occasions during the trial, the Court read to the jury a limiting instruction that Bondholders were not asserting that they relied on legal advice that they would receive Aristocrat shares, and that legal advice was not an issue in this case. There was no indication that the jurors either failed to comprehend the special instruction or were swayed by the stricken testimony. Therefore, consistent with sound precedent, the Court- holds that the limiting instruction cured any prejudice Aristocrat suffered either by Nunn’s testimony or by Bondholders’ counsel’s inadvertent remarks. See Tesser v. Bd. Of Educ. Of City Sch. Dist. Of City of New York, 370 F.3d 314, 319 (2d Cir.2004) (declining to grant new trial where alleged error was addressed by a clear jury instruction and where there was “no basis on which to conclude that ‘it is likely that in some material respect the fact finder’s judgment was swayed by the [alleged] error’ ”) (quoting Costantino v. David M. Herzog, M.D., P.C., 203 F.3d 164, 174 (2d Cir.2000)); Trademark Research Corp. v. Maxwell Online, Inc., 995 F.2d 326, 340 (2d Cir.1993); (stating, in the context of a curative jury instruction, that “it must be assumed that the jury followed instructions”); Okraynets v. Metro. Transp. Auth., 555 F.Supp.2d 420, 426-27 (S.D.N.Y.2008) (stating, in the context of a curative jury instruction, that “it must be presumed that juries are able to understand the court’s instructions, and that juries follow these instructions”).

For the foregoing reasons, the Court holds that Aristocrat’s motion for a new trial based on the claim that Bondholders waived the attorney-client privilege is denied.

3. Jury Instructions

Jury instructions are intended “to give the jury a clear and concise statement of the law applicable to the facts of the ease.” Girden v. Sandals Int’l, 262 F.3d 195, 203 (2d Cir.2001). “An erroneous [jury] instruction requires a new trial unless the error is harmless.” LNC Invs., Inc. v. First Fidelity Bank, N.A. N.J., 173 F.3d 454, 460 (2d Cir.1999) (Sotomayor, J.) (citation and internal quotation marks omitted). “ ‘A jury instruction is erroneous if it misleads the jury as to the correct legal standard, or does not adequately inform the jury on the law.’ ” Cameron v. City of N.Y., 598 F.3d 50, 68 (2d Cir.2010) (quoting LNC Invs., 173 F.3d at 460); see also Holzapfel v. Town of Newburgh, 145 F.3d 516, 521 (2d Cir.1998) (“An error exists if the jury was misled about the correct legal standard or was otherwise inadequately informed regarding the controlling law, and where such error is other than harmless, a new trial is required.”). “An error is harmless only if the court is convinced that the error did not influence the jury’s verdict.” Patalano v. Am. President Lines, 250 Fed.Appx. 425, 427 (2d Cir.2007) (citing LNC Invs., 173 F.3d at 462). Because “a trial court has considerable discretion in the formulation and style of jury instructions, ... a new trial is only warranted if, taken as a whole, the jury instructions gave a misleading impression or inadequate understanding of the law.” Patalano, 250 Fed.Appx. at 427-28 (2d Cir.2007); see also Parker v. Sony Pictures Entm’t, Inc., 260 F.3d 100, 106-07 (2d Cir.2001); Owen v. Thermatool Corp., 155 F.3d 137, 139 (2d Cir.1998); Plagianos v. Am. Airlines, Inc., 912 F.2d 57, 59 (2d Cir.1990).

a. Aristocrat’s Argument

First, Aristocrat contends that the Court’s jury charge, “taken as a whole, provided the jury with an inadequate understanding of the applicable law” because “[t]he Court repeatedly mischaracterized the applicable legal standard, ... incorrectly advising the jurors that the relevant question was not whether the Bondholders affirmatively took reasonable steps to mitigate, but ‘whether the bondholders unreasonably failed to mitigate their consequential damages after Aristocrat’s breach.’ ” (Aristocrat’s Mem. 20 (emphasis in original) (quoting Trial Tr. 1819:7-9).) Aristocrat claims that

by repeatedly describing the issue for decision as whether the Bondholders “unreasonably failed to mitigate their consequential damages” — rather than whether the Bondholders made reasonable efforts to mitigate their damages — the Court failed properly to convey the long-established mandate of New York law that imposes on an injured party an affirmative duty to take reasonable steps to mitigate its damages.

(Id. 22-23.)

Second, Aristocrat argues that “the Court failed to instruct the jury on several central tenets of the New York law of mitigation,” including that:

(1) the Bondholders were required to make substitute arrangements to obtain shares to cover their short positions within a reasonable amount of time and, to the extent they failed to make such arrangements, any consequential damages award should be reduced accordingly;

(2) in assessing the Bondholders’ conduct, the jury should bear in mind that reasonable conduct for a hedge fund in the absence of litigation is not necessarily the same as what is reasonable for a hedge fund seeking to recover consequential damages in litigation;

(3) if the Bondholders had a reasonable opportunity to eliminate the exposure to the risk that the cost of covering their short positions would increase, then [Aristocrat] cannot be held liable for any increased cost the Bondholders could have avoided by covering; and

(4) the Bondholders were not allowed to decline a reasonable opportunity to cover their short positions or speculate on the stock market price of [Aristocrat] shares at [Aristocrat’s] expense.

(Id. 21 (citing Aristocrat’s Revised Proposed Jury Instructions, dkt. no. 311, at 33-34).)

Third, Aristocrat contends that “the Court improperly and disproportionately emphasized to the jury that the Bondholders’ conduct should not be assessed ‘based on a backward-looking analysis,’ and that the Bondholders did not have an obligation to undertake ‘extraordinary and costly measures to mitigate consequential damages.’ ” (Aristocrat’s Mem. 22 (quoting Trial Tr. 1824:19-20, 1825:11-12).) Aristocrat states that “[w]hile instructions relating to hindsight and extraordinary measures would not have been per se erroneous,” they were erroneous here where the Court allegedly “disproportionately emphasized their importance to the jury and failed to provide other instructions on critical elements of New York law.” (Id. 24.)

Fourth, Aristocrat argues that, notwithstanding Aristocrat’s request, the Court “failed to provide the jury with a proper understanding of its prior rulings, ... including that the Bondholders would be fully compensated, through an award of general damages, for the value of the performance promised by [Aristocrat] under the Indenture.” (Id. 22.) Aristocrat also takes issue with the Court declining “to provide the jury with any guidance whatsoever regarding ... whether the Bondholders could reasonably have believed that this Court would order specific performance and direct [Aristocrat] to deliver shares.” (Id.) Aristocrat describes the Court’s “refusal to provide any instruction concerning the law of specific performance” as “clearly erroneous” because without this instruction, the jury purportedly “had no basis whatsoever for assessing the critical issue in this case — whether the Bondholders’ asserted basis for holding open their short positions was objectively reasonable.” (Id. 24.)

b. Analysis

The Court holds that its instructions to the jury “adequately inform[ed] the jury of the law,” and, “taken as a whole,” did not give “a misleading impression or inadequate understanding of the law.” Owen, 155 F.3d at 139 (citation and internal quotation marks omitted).

First, the Court rejects Aristocrat’s argument that the Court mischaracterized the applicable legal standard. The complete instruction that the Court provided included the very instruction that Aristocrat sought:

The only issue left for you to decide is whether the bondholders unreasonably failed to mitigate their consequential damages after Aristocrat’s breach, which means whether the bondholders failed to act reasonably to reduce, lessen or minimize the consequential damages following Aristocrat’s breach of contract.

The bondholders have a duty under the law to mitigate their consequential damages. Aristocrat has the burden to prove that the bondholders unreasonably failed to mitigate their consequential damages.

Any party who claims consequential damages as a result of another’s breach of contract has a duty under the law to use reasonable diligence under the circumstances to mitigate or reduce, lessen or minimize those damages. The law imposes on injured parties a duty to take advantage of reasonable opportunities that a party may have to prevent the aggravation of its consequential damages so as to reduce, lessen or minimize those losses or damages.

(Trial Tr. 1819:7-16, 1822:22-1823:4 (emphasis added).) This instruction is consistent with the Model Federal Jury Instructions, Second Circuit precedent, Southern District of New York courts, and New York caselaw, including cases that Aristocrat itself cites, and properly conveys to the jury Bondholders’ duty under New York law to mitigate damages as well as Aristocrat’s duty to establish that Bondholders did not uphold that duty. See 4 Leonard B. Sand, et al., Modern Federal Jury Instructions-Civil Instr. 77-7 (2009) (“[A]ny person who claims damages as a result of an alleged wrongful act of another has a duty under the law to use reasonable diligence under the circumstances to ‘mitigate,’ or minimize, those damages.... If the plaintiff unreasonably failed to take advantage of an opportunity to lessen his damages, you should deny recovery for those damages which he would have avoided had he taken advantage of the opportunity.” (emphasis added)); see also Fed. Ins. Co. v. Sabine Towing & Transp. Co., Inc., 783 F.2d 347, 350 (2d Cir.1986) (“The burden of showing that a plaintiff unreasonably failed to minimize damages rests with the wrongdoer.”); Air et Chaleur, S.A. v. Janeway,