Full opinion text
OPINION AND ORDER JED S. RAKOFF, District Judge. In this action, plaintiff CFIP Master Fund, Ltd. (the “Fund”) asserts various claims against defendants Citibank, N.A., Citigroup Global Markets Inc., and Citigroup Global Markets Limited (collectively, the “Citi Defendants”), as well as against defendant U.S. Bank National Association (“U.S. Bank”), arising from a credit default swap transaction entered into by these parties that was administered through a proprietary trust structure. The Fund filed a second amended complaint on January 29, 2010, and in response, the Citi Defendants asserted three counterclaims against the Fund. On March 12, 2010, all parties moved for summary judgment. The Court received extensive written submissions in connection with these motions and held oral argument on May 3, 2010. After careful consideration, and as specified more fully below, the Court grants U.S. Bank’s motion in full, and grants in part and denies in part the motions of the Fund and the Citi Defendants. Before turning to the parties’ arguments, the Court recounts the following undisputed background facts regarding the complex credit default swap transaction from which this litigation arises. The Fund, the plaintiff in this lawsuit, is a private investment fund organized under the law of the Cayman Islands and managed by Chicago Fundamental Investment Partners, LLC. See Pi’s Statement of Undisputed Facts Pursuant to Local Civil Rule 56.1 in Support of its Motion for Summary Judgment Against Citi Defendants (“Pi’s 56.1 Re: Citi”) ¶ l. Citibank, N.A. (“Citi”) is a United States depository banking institution. See Citi Defendants’ Rule 56.1 Statement (“Citi 56.1”) ¶ 4. Citigroup Global Markets Inc. (“CGMI”) is a New York corporation that operates as a securities brokerage firm. Id. ¶ 5. Citigroup Global Markets Limited (“CGML”) is a United Kingdom-based investment bank. Id. ¶ 6. U.S. Bank is Minneapolis-based national banking association. See U.S. Bank’s Rule 56.1 Statement (“U.S. Bank 56.1”) ¶ 5. In February 2007, CGMI approached the Fund about entering into a credit default swap transaction. Pi’s 56.1 Re: Citi ¶ 5. Over the next several months, the parties, represented by counsel, negotiated the form of this transaction. Id. ¶¶ 6-17. By May 2007, the Fund and CGMI had agreed that the Fund would provide credit protection on a “floating” rather than a “fixed” basis. Id. ¶ 18. In contrast to a “fixed” recovery transaction, where the credit protection seller pays a fixed percentage of a “notional” amount assigned to a particular company if that company experiences a credit event, in a “floating” recovery transaction the amount of the settlement payment due following a particular company’s credit event is based on the post-credit event market valuation of that company’s loans. Id. ¶¶ 7,10. On May 29, 2007, CGMI and the Fund executed a trade on the basis of a term sheet attaching a “Reference Portfolio” composed of 71 “Reference Entities” and identifying a “Reference Obligation” with respect to each Reference Entity. Id. ¶¶ 19, 22. The defined term “Reference Portfolio” refers to the list of companies for which the Fund provides credit protection; “Reference Entity” refers to each particular company in the overall Reference Portfolio; and “Reference Obligation” refers to the particular loan used as a basis for calculating the floating loss protection payment due following a credit event with respect to a given Reference Entity. In June 2007, the parties negotiated the definitive documentation of this transaction. See Pi’s Statement of Undisputed Facts Pursuant to Local Civil Rule 56.1 in Support of its Motion for Summary Judgment Against U.S. Bank (“Pi’s 56.1 Re: U.S. Bank”) ¶ 16. Consistent with the manner in which CGMI had arranged previous credit default swap transactions, the instant credit default swap was structured such that the Fund purchased the beneficial interest in credit-linked notes issued by a trust referred to as the TIERS® Beach Street 6 Synthetic CLO Floating Rate Credit Linked Trust, Series 2007-33F, (the “Trust”); as a result, the Trust, rather than the Fund directly, was the credit protection seller. CGMI used this particular structure for the reason, among others, that doing so permitted CGMI to obtain relief from Citi’s regulatory capital requirements. Pi’s 56.1 Re: Citi ¶ 24. Accordingly, as discussed in more detail below, the closing of this transaction involved the creation of the Trust and the designation of U.S. Bank as Trustee. Pi’s 56.1 Re: U.S. Bank ¶ 25. This transaction closed on June 29, 2007 and is memorialized in the form of various interrelated agreements. The Trust was created pursuant to a Series Trust Instrument (“STI”), annexed to which is a Master Trust Agreement Supplement (“MTAS”), that in turn incorporated an April 6, 2006 Base Trust Agreement (“BTA”), to which CGMI and U.S. Bank, as Trustee, are parties. Deck of Rachel M. Cherington, 3/12/10 (“Cherington Deck”), Exs. 6 (STI & MTAS) & 7(BTA). The credit default swap component of the transaction is memorialized in the form of a Default Swap Confirmation (“Confirmation”) between CGML, as “Protection Buyer” or “Party A,” and U.S. Bank, as Trustee for the Trust, which is the “Protection Seller” or “Party B.” The Confirmation incorporates “Standard Swap Terms,” a June 29, 2007 International Swaps and Derivatives Association (“ISDA”) Master Agreement between CGML and the Trust, and the 2003 ISDA Credit Derivatives Definitions (the “ISDA Definitions”). Id. Exs. 8 (Confirmation/Standard Swap Terms/ISDA Master Agreement) & 9 (ISDA Definitions). These agreements, taken together, require the Trust to cover the first $44,988,000 in amounts due under the credit default swap based on the Reference Portfolio. By its terms, the Confirmation is set to terminate on December 20, 2011. At the time of the closing, the Fund purchased all beneficial interest in $44,988,000 of Class F credit-linked certificates (the “Class F Certificates”) issued by the Trust. Pi’s 56.1 Re: Citi ¶ 41. With the $44,988,000 paid by the Fund, the Trust purchased a certificate of deposit from Citi, referred to as the “Term Asset.” Id. ¶ 45. Under the swap, CGML pays the Trust (for the benefit of the Fund) a quarterly fee based on the outstanding notional amount of the Reference Portfolio, which was initially established by the Confirmation to be $552 million. Citi 56.1 ¶¶ 24-25. As of April 5, 2010, CGML’s fixed payments to the Trust totaled over $11.5 million. Id. ¶ 28. In addition, the agreements entitle the Fund to receive the interest earned by the Trust on the Term Asset. Id. ¶ 14. The Fund, as sole beneficial owner of the Class F notes, is to receive the amounts remaining in the Term Asset upon the scheduled termination of the Trust. Id. ¶ 58. When loss protection payments become due to CGML under the swap because a credit event occurs with respect to a given Reference Entity, the Trustee funds that payment by liquidating a portion of the Term Asset, id., thus reducing both the amount of principal returned to the Fund on termination and the amount of the periodic coupon payments to the Fund over the term of the swap. Consistent with the “floating” nature of this transaction, the precise amount required to be paid with respect to a credit event is based on a market valuation of the corresponding Reference Obligation. This valuation must take place on a particular business day selected by CGML “in its discretion (acting in a commercially reasonable manner)” that falls between 45 and 60 “Business Days” after the date that an effective credit event notice is issued, with “Business Days” defined to exclude New York and London bank holidays. Confirmation, Annex A, at 10, ISDA Defs. § 1.16. The swap’s valuation procedures provide for CGML to obtain bids on that day from unaffiliated dealers that it selects, and these bids may be made at any time selected by CGML “in its sole discretion (acting in a commercially reasonable manner)” during business hours. Confirmation, Annex A, at 9-11. The Fund filed this lawsuit on July 10, 2009. Its complaint, as twice amended, brings various claims against the Citi Defendants and U.S. Bank arising from the following events that occurred under the swap: (1) a credit event that occurred when Lyondell Chemical Company (“Lyon-dell”), one of the Reference Entities, filed for bankruptcy in January 2009; (2) credit events that occurred in late March 2009 in connection with the bankruptcies of two other Reference Entities: Charter Communications Operating, LLC (“Charter”) and Ideare Inc. (“Ideare”); and (3) CGML’s substitutions into the Reference Portfolio of various Reference Obligations in May and August 2009. On February 22, 2010, the Citi Defendants asserted three counterclaims against the Fund seeking, among other things, declarations that the Fund has defaulted under, and otherwise violated, the swap agreements. The various issues presented by the parties’ summary judgment motion may be grouped into three broad categories. First, the parties dispute the propriety of the Citi Defendants’ actions with respect to the events occurring under the swap that give rise to this litigation. Second, the parties dispute the extent to which U.S. Bank can be held liable in its role as Trustee under the swap. Third, the parties dispute the Fund’s standing to bring claims against the Citi Defendants and/or U.S. Bank. The Court turns first to the cross-motions for summary judgment filed by the Fund and the Citi Defendants. (For purposes of this discussion, the Court assumes arguendo that the Fund has standing to bring claims against the Citi Defendants.) The first aspect of the Fund’s claims in this respect has to do with the credit event experienced by Lyondell in January 2009, and the basic facts relevant thereto are as follows. The Reference Obligation identified for Lyondell in the Confirmation is a loan with the “Bloomberg Loan Identifier” LN193943. Citi 56.1 ¶¶ 87-88. The identification of this particular loan as the Lyondell Reference Obligation was a mistake, because the loan terminated in 2006, before the credit default swap transaction closed. Id. ¶ 90. It is undisputed that CGMI and the Fund in fact intended to designate a secured revolving Lyondell loan (the “Approved Lyondell Loan”) bearing the Bloomberg number 287481, that, together with a related term loan, comprises a loan facility bearing the Bloomberg number LN287477, as the Lyondell Reference Obligation. Id. ¶¶ 91, 98. Lyondell filed for bankruptcy on January 6, 2009. Id. ¶ 92. On January 13, 2009, the Trustee was sent a Credit Event Notice stating that Lyondell’s bankruptcy filing constituted a Credit Event under the Confirmation. This notice was sent on “Citi” letterhead, was signed by Frank A. Liceiardello on behalf of “Citibank, N.A.,” referred to the Beach Street 6 Trust, and identified Bloomberg number LN287477 as a “Reference Obligation.” Cherington Deck, Ex. 14. Liceiardello is an authorized signatory for CGML as well as for Citi. Citi 56.1 ¶ 95. The Trust received this notice and forwarded it to Depository Trust Corporation (“DTC”), which is the record owner of the Class F Certificates. Id. ¶ 101. However, in connection with an earlier (December 2007) merger between Lyon-dell and Basell AF S.C.A. (“Basell”), the Approved Lyondell Loan had been paid off in full and was no longer outstanding at the time of the January 13 Credit Event Notice. Id. ¶ 99. On January 28, 2009, CGML sent a Notice of Substitute Reference Obligation purporting to substitute LN385221 (the “Substituted Lyondell Loan”) — a Lyondell term loan that was subordinated to debtor-in-possession (“DIP”) financing that was approved following Lyondell’s bankruptcy filing — as the Lyondell Reference Obligation pursuant to the swap agreements’ Reference Obligation substitution provisions, which are discussed in more detail below. Id. ¶ 107, see also Deck of Kanchana Wangkeo Leung Re: Citi, 3/12/10 (“Leung Citi Deck”), Ex. 15 (Notice of Substitute Reference Obligation). On January 29, 2009, the Fund objected to this substitution. Citi 56.1 ¶ 109. On March 20, 2009, CGML advised the Trustee that it had conducted a valuation of the Substituted Lyondell Loan and determined that the “final price” based on this Reference Obligation for the purpose of calculating the amount of the loss protection payment due was 16.75%. Id. ¶ 110. Thereafter, the Trustee, applying that percentage to the $11.04 million Notional Amount allocated to Lyondell under the Confirmation, liquidated over $9 million of the Term Asset, and made a payment to CGML over the Fund’s objection. Id. ¶ 111. The Fund attacks several aspects of the Citi Defendants’ actions with respect to the Lyondell Credit Event. First, the Fund raises procedural objections to the form of the January 13 Credit Event Notice. Under the ISDA Definitions, which are incorporated by reference into the Confirmation, a Credit Event Notice is “an irrevocable notice from a Notifying Party ... to the other party that describes a Credit Event that occurred....” ISDA Defs., § 3.3. It is undisputed here that CGML is the Notifying Party under the Confirmation and that the January 13 notice did not indicate that the notice was sent on behalf of CGML. Pi’s 56.1 Re: Citi ¶ 68. The Fund, however, made no objection to this misidentification until after this lawsuit was filed, see Second Am. Compl. ¶ 88, and the Fund nowhere identifies any harm or prejudice that resulted from the error. Indeed, as the Citi Defendants point out, the ISDA Definitions permit a Credit Event Notice to be given telephonically, and even though these definitions provide that telephonic notices should be followed by a written confirmation, they also state that a failure to supply this written confirmation “will not affect the effectiveness of that telephonic notice.” ISDA Defs. §§ 1.10, 3.3. Thus, if Licciardello had conveyed the Credit Event Notice telephonieally rather than in writing, that notice would unquestionably have been effective. The Fund’s only response to these indications that the corporate identification error was immaterial is to assert that the precise timing of an effective Credit Event Notice is of the utmost importance because, as discussed below, the date of the notice triggers a contractually defined “window” of 45 to 60 business days from the date of the notice during which the market valuation of the Reference Obligation must take place. Thus, the Fund hypothesizes, the Citi Defendants could have knowingly issued a technically defective notice so as to give themselves the option of later substituting a conforming notice so as to manipulate the timing of the valuation window. There is, however, no evidentiary support that the Citi Defendants acted with any such nefarious intentions. In these circumstances, and especially absent any contemporaneous objection to the corporate misidentification or showing of any resulting prejudice, this Court “will not permit the plaintiff to capitalize on [a] technical naming error in contravention of the parties’ evident intentions.” Spanierman Gallery, P.S.P. v. Love, 320 F.Supp.2d 108, 112 (S.D.N.Y.2004). Accordingly, the Court hereby denies the Fund’s motion insofar as it seeks relief based on the corporate misidentification in the January 13 Credit Event notice. Next, the Fund asserts that the January 13 notice was invalid because of several defects going beyond the corporate misidentification, including that (1) the notice specified as an Reference Obligation a loan facility rather than a particular individual loan; (2) the Reference Obligation identified in the notice was not previously identified by the parties in the applicable agreements and schedules; and (3) the Reference Obligation had expired before the date of the notice. Indeed, it is undisputed by the Citi Defendants that this notice was defective at least insofar as that the Reference Obligation identified in this notice (the Approved Lyondell Loan) had expired. See Citi Mem. Opp., 4/5/10, at 26. But notwithstanding this defect, Citi contends that its January 28 substitution notice cured all defects in the January 13 Credit Event Notice. The Fund disputes this. According to the Confirmation, “if in the opinion of [CGML] a Credit Event Notice is deficient in that it fails to designate ... [qualifying] Obligation, [CGML] may deliver a revised Credit Event Notice.” Confirmation, Annex A, at 8. Thus, the Citi Defendants argue, the Confirmation expressly contemplates that Credit Event Notices that contain some defect in identifying the relevant Obligation can be cured, and consistently with its provision, CGML identified a Substitute Reference Obligation in its January 28 notice. The Fund responds that the Citi Defendants’ “cure” argument falters because of the significance of the date of the Credit Event Notice in setting the valuation window. According to the Fund, if the Citi Defendants are correct that the January 28 substitution notice constituted a “revised” Credit Event Notice, it would follow that CGML’s March 20 valuation with respect to the Lyondell Credit Event was premature, because it took place well before the 45-to-60 business-day window as calculated from the January 28 revised notice. The Citi Defendants reply that there is no reason to conclude, under these facts, that the revision of the Credit Event Notice restarts the valuation clock instead of revising the original notice effective as of the date of that notice. The Court agrees that the Fund is not entitled to summary judgment on this basis. While the Confirmation expressly provides for the issuance of a “revised Credit Event Notice” when a Credit Event Notice is deficient in failing to designate a proper Obligation, the terms of the agreements do not specify whether the issuance of a revised notice renders the initial notice effective as of the date that the initial notice was issued. If, given this ambiguity, extrinsic evidence of the parties’ intentions is to be considered, it appears that the Fund’s theory that a revised notice must restart the valuation period lacks any grounding in the purposes served by the valuation window: According to the Fund, CGMI requested this valuation window to avoid “noise” generated by the Loan Credit Default Swaps auction that takes place 20-30 calendar days after a default. Aff. of Levoyd Robinson Re: Citi, 3/26/10, ¶ 28. According to the Citi Defendants, this valuation period was chosen in order to satisfy the requirements of credit rating agencies, which have defined various periods from the dates of a credit event that they consider to be sufficient for the market to process information resulting from the event. See Reply Aff. of Rachel E. Cherington, 4/16/10, Exs. 41-43. Under either of these understandings, the function of the valuation window is tied to the date that the credit event actually takes place, rather than the date that the credit protection buyer sends notice of the credit event. Thus, the interpretation advanced by Citi has the advantage of being consistent with the purpose behind the valuation window provisions. Independently, because the Fund failed to object to the Trustee’s payment of the settlement amount with respect to the Lyondell Credit Event on the ground that the valuation was untimely — or on any other ground having to do with the validity of the January 13 Credit Event notice — until the filing of the Second Amended Complaint, there is at least a question of fact as to whether the Fund has forfeited its right to assert its technical objection by failing to promptly raise it. Cf. Rode & Brand v. Kamm Games, Inc., 181 F.2d 584, 587 (2d Cir.1950) (“a party to a contract may not repudiate the contract on one ground and later assert entirely different grounds as a defense for such refusal to perform”). However, given the lack of clarity in the language of the agreements as to the effect of the issuance of a revised Credit Event Notice on the valuation window, the Court concludes that the narrow issue of whether the Lyondell valuation was timely given the issuance of a revised Credit Event Notice cannot be resolved in the Citi Defendants’ favor without the consideration of extrinsic evidence of the parties’ intentions, and accordingly denies their cross-motion on this point. See, e.g., Pal mieri v. Allstate Ins. Co., 445 F.3d 179, 188 (2d Cir.2006) (“Where contractual language is ambiguous and subject to varying reasonable interpretations, intent becomes an issue of fact and summary judgment is inappropriate.” (internal quotation marks omitted)). Apart from these more technical objections, the Fund challenges the substance of CGML’s designation of the Substituted Lyondell Loan as the Reference Obligation with respect to which the loss protection payment was calculated following the Lyondell Credit Event. This contention requires consideration of the rather complex procedures for substituting a Reference Obligation under the swap. As noted, the original Reference Portfolio under the swap consisted of 71 Reference Entities and their corresponding Reference Obligations. Citi 56.1 ¶ 59. The Confirmation provides that if a particular Reference Obligation identified in the Confirmation had been paid off or refinanced, then CGML, as “Calculation Agent” under the swap, may in certain circumstances substitute into the Reference Portfolio a new Reference Obligation provided that that loan meets certain criteria. Id. ¶ 44. The four relevant criteria are underscored below: [A]ny Substitute Reference Obligation shall be a Loan that (i) in the reasonable opinion of the Calculation Agent, satisfies the Senior Secured characteristic as of the day on which it is identified as a Substitute Reference Obligation, (ii) ranks pari passu ... in priority of payment with the then-current Reference Obligation ... (with the ranking in priority of payment of the then-current Reference Obligation being determined as of the later of (A) the Trade Date specified in the related Confirmation and (B) the date on which the then-current Reference Obligation was issued or incurred and not reflecting any change to such ranking in priority of payment after such later date) ..., (iii) preserves the economic equivalent, as closely as practicable as determined by the Calculation Agent in consultation with the parties, of the delivery and payment obligations of the parties to the Credit Derivative Transaction and (iv) is a Loan of the Reference Entity ---- Promptly upon identifying a Loan as a Substitute Reference Obligation (the “Proposed Substitute Reference Obligation”), the Calculation Agent shall provide notice to each party and such identification shall be binding upon the parties as to the Senior Secured Obligation Characteristic absent manifest error. Confirmation, Annex A, at 9 (emphasis added). The Confirmation defines “Senior Secured” to mean: as of any date of determination, that the Obligation is secured by a First Lien. “First Lien” means a security interest, or the application of proceeds realized following the enforcement of a security interest, in collateral, (i) which by its terms is not subordinated to the security interest of any other person, and (ii) with respect to which the secured party has not entered into an agreement to subordinate such security interest to the security interest of any other person. Id. at 8-9. The ISDA Definitions further provide: For purposes of determining whether Subordination exists or whether an obligation is Subordinated with respect to another obligation to which it is being compared, the existence of preferred creditors arising by operation of law or of collateral, credit support or other credit enhancement arrangements shall not be taken into account.... ISDA Defs. § 2.19(b)(1)(B). In addition to those noted above, the facts relevant to the substitution of the Lyondell Reference Obligation are the following. Loan LN287481, which both the Fund and the Citi Defendants intended to designate as the Lyondell Reference Obligation, was secured by, among other things, a first lien on certain of Lyondell’s cash, accounts receivable, and inventory, and was also secured by Lyondell’s plants, property, and equipment (“PP & E”). Pi’s 56.1 Re: Citi ¶¶ 94-95. According to the Fund, it selected this loan in part because it was secured by a first lien on high-quality collateral and because the Fund discounted the value of Lyondell’s PP & E, which were subject to environmental remediation liabilities. Id ¶¶ 96-98. As part of Lyondell’s December 2007 merger with Basell, all of Lyondell’s loans were paid off and replaced with $12.7 billion in new debt. Id ¶ 103. CGMI was one of the joint lead arrangers for this merger. Id ¶ 116. The new debt issued in connection with the merger included, among other things, a five-year $1 billion asset-backed revolving credit facility, later increased to $1.6 billion, which is secured by a first lien on cash, accounts receivable, and inventory, and which the Fund has denominated in its papers as the “Equivalent LCC [ie., Lyon-dell] Loan.” Id ¶¶ 104-06. This new debt also included a facility comprising six loans secured in part by a first lien on PP & E, which the Fund has tendentiously dubbed “Toxic LLC Loans.” Id ¶¶ 107-08. Whereas the Equivalent LCC Loan was syndicated at the time of the Lyondell-Basell merger, the Toxic LLC loans were not, but rather were restructured into several tranches to aid in syndication. Id ¶¶ 110-12. A loan from one of these tranches (Bloomberg Number LN385221) is the Substituted Lyondell Loan. Id ¶ 113. Lyondell and its domestic subsidiaries and affiliates filed for Chapter 11 bankruptcy protection on January 6, 2009, and that same day, the debtors sought an order to approve more than $8 million in DIP financing. Id ¶¶ 118-19. The DIP financing consisted of a $1.5 billion asset-backed revolver, a $3.25 billion new money term loan, and a $3.25 billion “roll-up” term loan. Id ¶ 120. Citi was one of the arrangers and lenders with respect to Lyondell’s DIP financing package, which was set forth in a term sheet executed by Citi and several other arrangers of this financing. Id ¶¶ 127-28. On January 8, 2009, the Bankruptcy Court entered an interim order authorizing the DIP financing. Id ¶ 122. Pursuant to 11 U.S.C. § 364(c)(1), this order had the effect of, among other things, granting these DIP loans “superpriority” status relative to prepetition loans. Additionally, the interim order supplemented the liens of prepetition lenders with so-called “adequate protection” liens in order to protect against diminution in the value of these lenders’ collateral as a result of the “priming” of their liens. Thus, following the entry of this interim order, the Substituted Lyon-dell Loan had become subordinated to the $8 billion of DIP financing. Id. ¶ 123. The Bankruptcy Court provided final approval of the DIP financing on March 1, 2009. Id. ¶ 125. As noted, on January 28, 2009, CGML sent the substitution notice designating the Substituted LLC Loan as the Substitute Reference Obligation. The Fund objected to this notice on the same day, and throughout the next two months until the settlement payment was eventually made, the Fund, the Citi Defendants, and the Trustee disputed the propriety of this substitution. See, e.g., SAC ¶¶ 99-108, Citi Ans. ¶¶ 99-108; Cherington Deck, Ex. 23. In its summary judgment motion against the Citi Defendants, the Fund contends that the substitution of the Substituted Lyondell Loan was invalid because it failed to comply with three of the Substitute Reference Obligation criteria, which are that the substituted loan (1) in the reasonable opinion of CGML, satisfies the “Senior Secured” characteristic; (2) ranks pan passu in priority of payment with the Approved Lyondell Loan; and (3) preserves the economic equivalent, as closely as practicable as determined by CGML “in consultation with the parties,” of the parties’ obligations under the transaction. The parties’ arguments as to the first two of these criteria essentially reduce to the question of whether the subordination of a loan that occurs by way of a Bankruptcy Court’s approval of DIP financing precludes that loan from satisfying the “Senior Secured” characteristic. It is undisputed here that the Substituted Lyondell Loan was, as a factual matter, subordinated to several levels of the DIP financing and that Citi had agreed to a term sheet proposing financing that, when approved by the Bankruptcy Court, effected this subordination. Thus, to the extent the effects of the DIP financing are considered to result in “subordination” within the meaning of the Confirmation, by the terms of the loan or by agreement of the secured party to subordinate, the pan passu characteristic would not be satisfied: the Substituted Lyondell Loan, if considered to be subordinated, would not rank pan passu in priority of payment vis-a-vis the Approved Lyondell Loan as of the May 29, 2007 trade date. The Citi Defendants respond, however, that the subordination that occurs by a Bankruptcy Court’s approval of DIP financing is disregarded under the swap pursuant to the ISDA Definitions, which are expressly incorporated into the Confirmation. As noted, these definitions provide that the determination of whether an obligation is “Subordinated” does not take into account “the existence of preferred creditors arising by operation of law.” Thus, the Citi Defendants argue, any subordination that took place through the DIP financing was not by the terms of the Substituted LLC Loan, but rather occurred by operation of the Bankruptcy Code, and, for similar reasons, there was no “agreement to subordinate” by way of Citi’s execution of the DIP financing term sheet. Moreover, the Citi Defendants aver that allowing subordination by way of the Bankruptcy Code to disqualify a loan from “Senior Secured” status would vitiate the purpose of the swap. This is because DIP financing, which, according to extrinsic evidence submitted by the Citi Defendants, is common in corporate bankruptcies and typically involves prepetition lenders, automatically primes all pre-petition debt as a matter of law. Hence, under the Fund’s interpretation, it would be difficult, if not impossible, to identify a permissible Reference Obligation with respect to a Reference Entity that filed for bankruptcy (other than the DIP facility itself), which would be at odds with the Confirmation’s purpose of providing credit protection in the event a Reference Entity files for bankruptcy or otherwise experiences a Credit Event. The Fund responds by arguing that the ISDA definition of “Subordination” is not incorporated into the Confirmation’s definition of the “Senior Secured/First Lien” Obligation Characteristic because the term “subordinate” in the latter definition is not capitalized and, therefore, does not incorporate a defined term. Moreover, the ISDA definition of “Subordination” appears as part of the standard definition of the “Not Subordinated” Obligation Characteristic, 2003 ISDA Defs. § 2.19(b)(1)(A), which, the Fund argues, was rejected in favor of the customized Senior Secured Obligation Characteristic negotiated by the parties. The Fund also contends that the subordination that occurred here did not occur “by operation of law” (ie., the Bankruptcy Code), but rather took place because of an agreement reached by the DIP lenders. And the Fund asserts that its interpretation is consistent with one of the purposes of the Senior Secured/First Lien characteristic, which is to remove any incentive of a secured creditor/credit protection buyer to devalue a loan on which it can claim credit protection. Having carefully considered these arguments, the Court is of the conclusion that this issue cannot be resolved on summary judgment. While the ISDA Definitions clearly exclude subordination by operation of law from the “Not Subordinated” characteristic, it is at best ambiguous — even after taking the evidence of industry custom and usage into account — whether this definition of subordination is incorporated into the Senior Secured/First Lien characteristic that was negotiated by the parties. Even assuming that this definition is incorporated, it is unclear whether the subordination that occurs pursuant to a Bankruptcy Court’s approval of DIP financing proposed by DIP lenders is tantamount to subordination “by operation of law.” To be sure, the Citi Defendants appear to be correct that the interpretation of “subordination” urged by the Fund would severely restrict the substitution of Reference Obligations following a bankruptcy, but the Court cannot conclude on summary judgment that this practical consequence would render meaningless the swap’s provisions regarding the designation of Reference Obligations and the means of calculating the amount of a loss protection payment following the occurrence of a Credit Event. For the foregoing reasons, the Court hereby denies the parties’ summary judgment motions with respect to whether CGML properly determined that the Substituted Lyondell Loan satisfied the pan passu characteristic. For similar reasons, summary judgment cannot be granted with respect to the Senior Secured characteristic, which under the Confirmation’s provisions regarding substitutions of Reference Obligations, needs to be satisfied only in the “reasonable opinion” of the Calculation Agent and is binding absent manifest error. Insofar as the Citi Defendants have created an issue for trial with respect to whether subordination due to DIP financing should be disregarded under the swap, it follows that CGML could in its reasonable opinion con-elude accordingly and that doing so would not be manifest error. The Fund also raises a procedural challenge to CGML’s determination that the Substituted Lyondell Loan satisfied the economic equivalence criterion. It contends that the Citi Defendants failed to comply with the Confirmation’s requirement that it determine economic equivalence “in consultation with the parties” in that there was no consultation at all prior to sending the January notices. The Citi Defendants respond as an initial matter that their obligation to consult with the “parties” extends only to consultation with the Trustee, who they contend is the sole counterparty under the Confirmation. This argument, however, is of limited force, given that there is no evidence of pre-substitution consultation with the Trustee. But even assuming that the consultation obligation extends to the Fund as well as (or in lieu of) the Trustee, the Citi Defendants urge that the terms of the Confirmation contemplate that “consultation” takes place following an initial identification of a Substitute Reference Obligation. This is because the Confirmation requires that “[pjromptly upon identifying a Loan as a Substitute Reference Obligation (the ‘Proposed Substitute Reference Obligation’), the Calculation Agent shall provide notice to each party.” Confirmation, Annex A, at 9. This notion of a Proposed Substitute Reference Obligation, the Citi Defendants maintain, suggests that the consultation is not required to occur until the notice of a proposed substitute is sent and may take place up until the Calculation Agent makes its determination of economic equivalence. The Fund responds that the ISDA Definitions, unlike the terms of the Confirmation itself, provide that “the Calculation Agent shall (after consultation with the parties) identify one or more Obligations to replace such Reference Obligations.” ISDA Defs. § 2.30(a). However, Annex A to the Confirmation, which contains the language requiring only that the economic equivalence determination be made “in consultation with the parties,” controls to the extent it is inconsistent with the 2003 Definitions, see Confirmation, Annex A, at 1. Thus, the interpretation offered by the Fund would render superfluous the Confirmation’s introduction of the concept of a Proposed Substitute Reference Obligation and the requirement that CGML send notice upon identification thereof. While the Court is of the tentative view that consultation may indeed take place following the identification of the Proposed Substitute Reference Obligation, it ultimately need not reach this issue, because the evidence here shows that CGML discharged whatever obligation it had to consult with the Fund even accepting the Fund’s position that consultation must take place prior to sending the substitution notice. This is because Levoyd Robinson, the Fund’s Managing Principal, testified at his deposition that he had spoken with Adam Bentch (a CGMI employee) the week before he received the January 28 notice regarding the Lyondell Credit Event. Robinson testified: I asked them what are they going to do about Lyondell because it’s expired, and the only thing that’s out there that’s eligible is the asset base [i.e., the asset-backed revolver referred to by the Fund as the Equivalent LCC Loan]. He responded, if that’s the case, that’s fine. And then I get this — this substitute. Cherington Decl., Ex. 12 (Dep. of Levoyd Robinson, 12/8/09 (“Robinson Dep.”)), at 163-64. This testimony indicates that the Fund was aware that the Approved Lyon-dell Loan had expired and conveyed its view as to the only loan that, in its opinion, was an appropriate Substitute Reference Obligation. Although the Fund contends that this exchange did not amount to a consultation because there was no specific discussion of the Substituted Lyondell Loan, the Court finds this distinction to be immaterial. Any conceivable purpose behind the consultation requirement was fully satisfied once the Fund had the opportunity, prior to the identification of a Proposed Substitute Reference Obligation, to make known its views on economic equivalence. Indeed, the issue of economic equivalence with respect to the Lyondell substitution was vigorously debated among the parties in the months between the January 28 notice and the March 20 settlement. For these reasons, the Court can identify no genuine issue of material fact as to whether the duty of CGML to consult with respect to economic equivalence was satisfied, and accordingly grants the Citi Defendants’ motion in this respect. This leaves the issue of whether the Substituted Lyondell Loan “preserves the economic equivalent, as closely as practicable” (as determined by the Calculation Agent), of the parties’ delivery and payment obligations under the swap. This issue, on its face, requires the resolution of material factual disputes, especially in the context of the changes in Lyondell’s capital structure as a result of the Basell merger and Lyondell’s bankruptcy. Indeed, none of the parties contends that this issue can be resolved as a matter of law on the undisputed facts. For that reason, the issue of economic equivalence with respect to the Lyondell substitution cannot be resolved on summary judgment. Turning next to those aspects of the Fund’s claims against the Citi Defendants that relate to the Charter and Ideare credit events, the relevant facts are as follows. Charter and Ideare filed for bankruptcy in March 2009. Pi’s 56.1 Re: Citi ¶ 172. On April 1, 2009, CGML issued Credit Event Notices for each of these entities. Id. ¶ 173; see also Cherington Deck, Exs. 15 (Charter notice) & 16 (Ideare notice). On June 4, 2009, CGML sent the Trust separate notices stating a final settlement price for the Charter and Ideare Reference Obligations using a valuation date of June 3. Pi’s 56.1 Re: Citi ¶ 175. The parties agree, however, that the 45-to-60 “Business Day” window following the April 1 Event Determination date did not begin until June 9, 2009; CGML selected June 3 as a valuation date because it failed to account for several New York and London bank holidays in its day count. Id. ¶¶ 174-75,181. It is undisputed that the Fund knew of the day count error by June 23, 2009. Citi 56.1 ¶ 118. The Citi Defendants contend that they were not informed of the day count error until July 16. Id. The Fund’s general counsel, S. Jay Novatney, testified that he called U.S. Bank regarding the day count immediately after the Fund received copies of the valuation notices on June 23, 2009, but that, at that point, U.S. Bank had already paid the settlement amounts for Charter and Ideare based upon the valuation notices. Id. ¶¶ 178, 179. Following the Fund’s written objections to the validity of these valuations, CGML submitted “amended valuation notices,” which contained valuations using historical pricing data provided by a third-party pricing service. Id. ¶ 182; see also Cherington Deck, Ex. 20. U.S. Bank accepted the amended valuation notices over the Fund’s objection, Citi 56.1 ¶¶ 185-86, and Citi returned $458,160 to adjust for the final price based on the corrected valuation date, Cherington Deck, Ex. 11, ¶ 19. The Fund moves for summary judgment declaring that CGML’s valuations of Charter and Ideare are entirely invalid and awarding the recovery of the over $6 million paid by the Trust in connection with the Charter and Ideare credit events. It is undisputed, as noted, that the initial valuations came before the 45-to-60 business day window as defined by the swap agreements. The Citi Defendants argue that returning to the Funds the entire $6 million amount of the loss protection payments paid with respect to these credit events merely because of this technical breach would be completely contrary to the economic purpose of the Confirmation, which was to provide credit protection when a Reference Entity undergoes a Credit Event. They contend that the Fund delayed in notifying them of the day count error until after the proper valuation window had already closed. Moreover, they assert that the pricing methodology that CGML used to correct the valuation error generates pricing more favorable to the Fund than would have resulted had actual dealer bids been solicited, and posit that the Fund has come forward with no evidence to the contrary. The Court can identify no reason to permit the Fund to be relieved entirely of its obligation to provide credit protection following the Charter and Ideare bankruptcies merely because the Citi Defendants failed to account for certain banking holidays in setting the valuation window. Even assuming that the Fund has created a genuine factual dispute as to whether the call from Novatney put the defendants on notice of the day count discrepancy as of June 23, 2009, there is no basis for completely invalidating the settlement pay-merits because of this error. The Fund’s position with respect to these valuations is incompatible with the well-established doctrine of forfeiture, whereby “[t]o the extent that the non-occurrence of a condition would cause disproportionate forfeiture, a court may excuse the non-occurrence of that condition unless its occurrence was a material part of the agreed exchange.” Restatement (Second) of Contracts § 229; see also Wuhan Airlines v. Air Alaska, Inc., 1998 WL 689957, at *3 (S.D.N.Y. Oct. 2, 1998) (“In Cardozo’s famous formulation of the role of common sense in contract construction, ‘The law has outgrown its primitive stage of formalism when the precise word was the sovereign talisman, and every slip was fatal.’ ” (quoting Wood v. Duff-Gordon, 222 N.Y. 88, 91, 118 N.E. 214 (1917))). There is absolutely no indication from the terms of the swap agreements that an error of a few days based on a failure to account for bank holidays was the sort of material breach that should result in a complete forfeiture by the protection buyer with respect to the credit event at issue. For these reasons, the Court holds as a matter of law that the Fund is not entitled to the wholesale invalidation of the settlement payments made with respect to the Charter and Ideare credit events. That said, there is no dispute that the Charter and Ideare Violations were several days premature and that CGML’s amended valuation notices rely on a pricing methodology that is not authorized under the swap agreements. While the Fund’s summary judgment papers provide no basis for the Court to conclude that it suffered actual damages from the valuation error when the $458,160 cure payment is taken into account, the Court will permit the Fund to attempt to make this showing at trial, and accordingly denies the Citi Defendants’ summary judgment motion to that limited extent. The Fund’s final set of claims against the Citi Defendants have to do with a number of substitutions of Reference Obligations that CGML effectuated in May and August 2009. On May 15, 2009, CGML delivered a notice indicating that it substituted 26 Reference Obligations with respect to the Reference Entities in the Reference Portfolio. Pi’s 56.1 Re: Citi ¶ 187; see also Leung Citi Deck, Ex. 23. In August 2009, CGML substituted another five loans. Pi’s 56.1 Re: Citi ¶ 188; see also Leung Citi Deck, Ex. 30. The Fund objected to CGML’s August substitution by letter dated August 26, 2009. Pi’s 56.1 Re: Citi ¶ 189; see also Leung Citi Deck, Ex. 32. CGML did not consult with the Fund or U.S. Bank prior to sending these notices. Pi’s 56.1 Re: Citi ¶ 190. CGML asserts that it made these substitutions because it determined, given the Fund’s actions with respect to the Lyondell substitution, that it would be wise to review Reference Obligations and identify substitutes for those that had expired. See Cherington Deck, Ex. 21 (Dep. of Michael W. Cooney, 12/1/09), at 104. Based on its view that consultation with respect to a Substituted Reference Obligation’s economic equivalence must take place prior to the issuance of the notice of substitution, the Fund moves for summary judgment granting declaratory relief holding that these substitutions are invalid due to the lack of timely consultation. As the Fund recognizes, however, the Court’s decision to grant declaratory relief is a discretionary one, and is based on considerations such as whether “the judgment will serve a useful purpose in clarifying and settling the legal relations in issue.” Dow Jones & Co., Inc. v. Harrods, Ltd., 237 F.Supp.2d 394, 432 (S.D.N.Y. 2002) (internal quotation marks omitted). The Court concludes that the alleged failure to consult with respect to the May and August substitutions is not the sort of dispute that merits the exercise of such discretion. Whatever the contours of the Fund’s consultation right are, this obligation itself is relatively insignificant in the overall context of the swap agreement, as it pertains only to the economic equivalence criterion for substitution but not to the other three criteria or any other aspect of the transaction. Moreover, unlike its more particularized objections to the Substituted Lyondell Loan, the Fund makes no claim that any of the substituted loans included in the May and August substitutions do not satisfy the economic equivalence criterion, far less that it has identified alternative eligible substitute loans that are more economically equivalent that would be the subject of a “consultation.” Absent any indication that the Fund, if consulted, would have objected to any of the substitutions noticed by CGML, the Court concludes that the parties’ competing interpretations regarding the consultation right do not present the type of issue for which a declaratory judgment would serve a useful purpose. Accordingly, the Citi Defendants’ motion for summary judgment dismissing such claims is hereby granted. As noted, the Citi Defendants have interposed three counterclaims against the Fund, and the parties cross-move for summary judgment with respect to these counterclaims. The counterclaims all arise from allegations that by bringing this litigation, the Fund has in effect petitioned for the liquidation of the Trust, thus entitling CGML to various forms of relief under the swap agreements. The counterclaims arise from the following facts. The Fund’s Second Amended Complaint, like the Fund’s previous two complaints, seeks a judgment declaring that the swap agreement terminated as of January 28, 2009, because the Citi Defendants failed to pay the full premium due on account of the challenged settlement payments, and directing U.S. Bank to return the amount maintained in its cash reserve as of that date. Second Am. Compl., p. 77. In the Fund’s Rule 30(b)(6) deposition, Levoyd Robinson, the Fund’s managing principal, answered “Yes” to the question, “Am I correct that you essentially want to liquidate the assets of the trust at this point in the litigation?”. Robinson Dep. at 371-72. Against this factual background, the Citi Defendants bring their counterclaims based on the following provisions of the swap and related agreements. The ISDA Master Agreement defines an Event of Default as follows: The occurrence at any time with respect to a party ... of any of the following events constitutes an event of default (an “Event of Default”) with respect to such party: ... (vii) Bankruptcy. The party ... (1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case ivithin 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver or other similar official for it or for substantially all its assets; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (6) (inclusive). Confirmation, Annex B (ISDA Master Agreement) § 5(a)(vii) (emphasis added); see also Leung Deck, Ex. 1C (Confirmation, Annex C). The Master Agreement also provides that “[i]f at any time an Event of Default with respect to a party (the ‘Defaulting Party’) has occurred and is then continuing, the other party (the ‘Non-defaulting Party’) may ... designate ... an Early Termination Date.” Confirmation, Annex B, § 6(a). In a representation letter executed in connection with the Fund’s purchase of Class F Certificates, the Fund represented as follows: The Purchaser, by its acceptance of a Certificate, covenants and agrees that [the Purchaser] shall not, prior to the date which is one year and one day after the termination of the Trust Agreement, acquiesce, petition or otherwise invoke or cause the Depositor to invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against the Depositor [CGMI], the Trustee or the Trust under any federal or state bankruptcy, insolvency, reorganization or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Depositor, the Trustee or the Trust or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Depositor, the Trustee or the Trust. Cherington Deck, Ex. 13 (Purchaser Representation Letter), ¶ 21 (emphasis added). Similarly, under Section 24(u) of the Master Trust Agreement, each purchaser of a Class F certificate or a beneficial interest therein is deemed to represent that it covenants and agrees that the Purchaser shall not, prior to the date which is one year and one day after the termination of the Trust Agreement, acquiesce, petition or otherwise invoke or cause the Depositor to invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against the Depositor [CGMI], the Trustee or the Trust under any federal or state bankruptcy, insolvency, reorganization or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Depositor, the Trustee or the Trust or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Depositor, the Trustee or the Trust. Id. Ex. 6, MTAS, § 24(u) (emphasis added). Based on the underscored portions of these provisions, the Citi Defendants contend that the Fund has petitioned for the Trust’s liquidation or otherwise invoked judicial process for the purpose of liquidating or winding up the Trust, that such a petition has been pending for over thirty days, and that as a result, an Event of Default has occurred and the representation letter and Master Trust Agreement have been breached, thus entitling the Citi Defendants to various forms of relief. The Citi Defendants are correct, as a superficial matter, that some of the relief sought by the Fund through this lawsuit resembles liquidation. The Term Asset is the Trust’s primary asset, see PPM at 20, and if the Fund prevails in its position that the Citi Defendants committed an Event of Default by failing to make the required settlement payments, the Fund, as the “Non-defaulting Party,” would have the right to designate an “Early Termination Date,” Confirmation, Annex B, § 6(a), thus terminating the Trust on that date. It is apparent, however, that the portions of the swap agreements relied upon by the Citi Defendants with respect to their counterclaims are addressed to bankruptcy petitions or other similar insolvency proceedings, rather than the claims for breach of contract asserted by the Fund in this lawsuit. The fact that the Fund’s 30(b)(6) witness agreed to the Citi Defendants’ counsel’s characterization of this lawsuit as seeking “liquidation” cannot change the fact that the provisions of the ISDA Master Agreement, representation letter, and Master Trust Agreement relied upon by the Citi Defendants clearly contemplate petitions filed under the bankruptcy laws, far different from what is presented here. The interpretation urged by Citi would have the effect of turning any action by the Fund to address an alleged breach of the swap terms into an Event of Default by the protection seller, thus chilling the ability of the Fund to vindicate its rights under the swap where, as here, the Trustee has allegedly failed to protect the Fund’s interests. Because the Court concludes that the Citi Defendants’ counterclaims rest on the legally untenable proposition that the instant lawsuit is the functional equivalent of a “petition” for “liquidation” or “winding up,” the Court hereby grants the Fund summary judgment in this respect and hereby dismisses the three counterclaims. Next, the Court addresses the cross-motions for summary judgment filed with respect to the actions taken by U.S. Bank as Trustee. The facts relevant to these motions are as follows. As noted, CGMI requested that this credit default swap transaction be structured as a credit-linked note issued by a trust pursuant to Citi’s proprietary “Beach Street” trust structure. Pi’s 56.1 Re: U.S. Bank ¶¶ 11-14. The substantive terms of this transaction were negotiated between the Citi Defendants and the Fund. U.S. Bank 56.1 ¶ 8. CGMI and the Fund agreed that U.S. Bank would serve as Trustee for the Trust, but the Fund did not communicate with U.S. Bank concerning the transaction prior to its closing. Id. ¶¶ 10, 12. The Fund did not review the Base Trust Agreement or the Series Trust Instrument prior to the day of the closing. Id. ¶ 14. The Fund did not negotiate any provisions of the trust agreements directly with U.S. Bank. Id. ¶ 15. The following facts relate to U.S. Bank’s actions taken with respect to the aforementioned credit events and valuations that gave rise to this litigation. After receiving the January 13, 2009 Lyondell Credit Event Notice, U.S. Bank forwarded this notice to DTC on January 14. Id. ¶ 36. Similarly, U.S. Bank promptly forwarded the DTC the January 28, 2009 notice of substitution with respect to the Lyondell Reference Obligation. Id. ¶ 37. On January 30, the Fund sent U.S. Bank a letter disputing the validity of that substitution, and thereafter, U.S. Bank requested that CGML explain why it believed that substitution was permissible. Id. ¶ 38; see also Deck of Michael S. Kraut, 3/12/[10] (“Kraut Deck”), Ex. 55 (Dep. of Marlene J. Fahey, 1/5/10 (“Fahey Dep.”)), at 267. CGML sent a letter explaining its substitution on February 11. U.S. Bank 56.1 ¶ 38; see also Kraut Deck, Ex. 14. After consulting with outside counsel, U.S. Bank ultimately concluded that the substitution was proper. See Kraut Deck, Ex. 20. U.S. Bank then sought and obtained an indemnification agreement from CGML, which recited that U.S. Bank requested the indemnification to hold U.S. Bank harmless so that U.S. Bank could act consistently with CGML’s position with respect to the substitution. Id. Ex. 44. The indemnification agreement was executed on March 20, and, that same day, U.S. Bank liquidated a portion of the Term Asset and made a settlement payment following the receipt of a valuation notice from CGML. U.S. Bank 56.1 ¶41. On April 3, the Fund’s counsel wrote to U.S. Bank to give notice of CGML’s alleged breach of the swap agreements, requested that U.S. Bank initiate an action against CGML, and offered U.S. Bank an indemnification to do so. Pi’s 56.1 Re: U.S. Bank ¶ 156; see also Kraut Deck, Ex. 46. U.S. Bank rejected this proposal by letter dated April 14, which noted that the Trustee concluded that CGML acted appropriately in substituting the Lyondell Substituted Reference Obligation. Pi’s 56.1 Re: U.S. Bank ¶ 157; see also Deck of Kanchana Wangkeo Leung re: U.S. Bank, 3/12/10, Ex. 94. Next, as to the Charter and Ideare bankruptcies, U.S. Bank promptly forwarded the credit event notices to DTC. U.S. Bank 56.1 ¶¶44-46. On June 4, 2009, CGML sent valuation notices for these credit events to U.S. Bank, which forwarded them to DTC. Id. ¶¶ 46-47. U.S. Bank accepted the notices and paid CGML over $6 million to settle the trade. Pi’s 56.1 Re: U.S. Bank ¶ 168. After the Fund objected to the timing of the valuations, CGML responded by submitting amended valuation notices dated July 27, 2009, and the Fund sent U.S. Bank a letter on July 28 objecting to the nature of CGML’s proposed revaluation. Id. ¶ 177. After conferring with counsel, U.S. Bank sent CGML a letter on July 28 acknowledging receipt of the amended notices, applying the coxrected amounts, and reselling its rights as to any errors CGML may have made. Kraut Deck, Ex. 34. In its summary judgment motion against U.S. Bank, the Fund contends that U.S. Bank violated its contractual obligations and fiduciary duties as Trustee. The gist of the Fund’s position is that it believed and reasonably understood that U.S. Bank, by “stepping into the Fund’s shoes” as protection seller under the swap agreement, would assume substantive responsibilities to enforce the Fund’s rights. This argument relies primarily on the terms of the trust agreements, which, the Fund contends, make clear that U.S. Bank’s responsibilities are substantive in nature. For example, there are numerous provisions of the trust agreements indicating that U.S. Bank was to discharge its responsibilities “for the benefit of the holde