On February 7, 2022, Justice Reed of the New York County Commercial Division issued a decision in Bersin Props., LLC v. Nomura Credit & Capital, Inc., 2022 NY Slip Op. 50084(U), holding that the affirmative defense of impossibility cannot be based on mere financial hardship, explaining:
Bersin urges that buying an IRCA at the strike price Nomura provided would have required it to pay an unreasonably high price of almost $500,000, thereby rendering its performance impossible. When a party to a contract makes a promise, that party must perform or respond in damages for its failure, even when unforeseen circumstances make performance burdensome. Impossibility will only excuse a party’s performance when the subject matter of the contract is destroyed or the means of performance makes performance objectively impossible. Economic hardship or financial difficulty, even to the extent of bankruptcy or insolvency, does not excuse performance of a contract. The higher price of the IRCA did not excuse Bersin from satisfying that obligation. Thus, the issue of whether Bersin could afford an IRCA at LIBOR is not a basis to excuse the condition precedent.
(Internal quotations and citations omitted).