UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2022 (Argued: March 27, 2023 Decided: September 6, 2023) Docket Nos. 22-274(L), 22-402(CON)

EMA FINANCIAL, LLC, Plaintiff-Counter-Defendant-Counter-Claimant-Appellee-Cross-Appellant, v. JOEY CHANCIS, RICHARD ROER, Defendants-Counter-Claimants-Counter-Defendants-Appellants-Cross-Appellees,

RAR BEAUTY, LLC, LABB, INC., REFLEX PRODUCTIONS, INC., RICHARD CHANCIS, JOEY NEW YORK, INC., Defendants-Counter-Claimants-Counter-Defendants. *

Before: SACK, LOHIER, AND CARNEY, Circuit Judges.

This action concerns loans issued by the plaintiff, EMA Financial, LLC, to a group of companies that were controlled by Joey Chancis, Richard Chancis, and Richard Roer. The loan agreements contained so-called “floating-price conversion option” provisions, which gave EMA the right to exercise an option to receive company stock in lieu of cash repayment on the loans. When EMA initially sought partial repayment of the loans through the stock repayment option in 2017, the companies delivered the shares to EMA at the agreed-upon discount rate. Later that year, EMA sought to exercise the conversion option again. This time, the companies failed to deliver the stock. EMA then brought suit, claiming, inter alia, breach of contract and breach of guaranty as to the loan agreements, and fraudulent conveyance and fraudulent inducement. The defendants asserted as an affirmative defense that * The Clerk of Court is respectfully directed to amend the official caption as set forth above. 22-274(L) EMA Financial, LLC v. Chancis the loan agreements were void because the conversion option provisions rendered the agreements criminally usurious under New York law. The district court (Vernon S. Broderick, J.) dismissed this defense and granted several of EMA’s claims on summary judgment. After a bench trial on the remaining issues in the case, the district court entered judgment in favor of EMA for some of its claims and in favor of the defendants for others. Joey Chancis and Richard Roer now appeal, arguing in relevant part that the district court’s dismissal of the usury defense at summary judgment should be vacated in light of an intervening change in New York law. EMA cross-appeals, challenging, among other things, several findings in the district court’s post-trial order. We agree with the defendants that the district court erred in deciding that, as a matter of law, the loan agreements were not usurious under New York law. We therefore decline to address EMA’s challenges to the district court’s judgment at this time. Accordingly, we VACATE AND REMAND in part for the district court’s further consideration of this issue.

JEFFREY FLEISCHMANN, Law Office of Jeffrey Fleischmann, P.C., New York, NY, for EMA Financial, LLC;

MARJORIE SANTELLI (Mark R. Basile and Eric Benzenberg, on the brief), The Basile Law Firm P.C., Jericho, NY, for Joey Chancis and Richard Roer. 22-274(L) EMA Financial, LLC v. Chancis SACK, Circuit Judge:

This action concerns loans issued by the plaintiff, EMA Financial, LLC (hereinafter, “EMA”), 1 to a group of companies (hereinafter, the “Corporate Defendants”) 2 that were controlled by Joey Chancis, Richard Chancis, and Richard Roer (hereinafter, the “Individual Defendants”). The loan agreements contained so-called “floating-price conversi