JMD Holding Corp., Respondent v. Congress Financial Corporation, Appellant, Defendant

Summary

The New York Court of Appeals affirmed the Appellate Division’s judgment, holding that the $600,000 early‑termination fee in the revolving loan agreement is an enforceable liquidated‑damages provision, not an unenforceable penalty, and that Congress was not authorized to retain the cash‑collateral reserve after JMD satisfied its loan obligations. The court remanded the matter to the Supreme Court for further proceedings on the cash‑collateral issue.