McEvoy v. Apollo Global Management, LLC et al
Filing
122
ORDER denying 95 Defendants' Joint Motion for Summary Judgment. Plaintiff shall file a Second Amended Class Action Complaint no later than 7/23/2021. Defendants shall respond no later than 8/20/2021. See Order for details. Signed by Judge Timothy J. Corrigan on 6/29/2021. (AGB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
MICHAEL MCEVOY, on behalf of
himself and others similarly
situated,
Plaintiff,
v.
Case No. 3:17-cv-891-TJC-MCR
APOLLO GLOBAL
MANAGEMENT, LLC, a Delaware
limited liability company, APOLLO
MANAGEMENT VI, L.P., a
Delaware limited partnership, and
CEVA GROUP, PLC,
Defendants.
ORDER
This putative class action is before the Court on Defendants Apollo Global
Management, Inc. (f/k/a Apollo Global Management, LLC), Apollo Management
VI, L.P. (collectively, “Apollo”), and CEVA Group PLC’s (“CEVA Group”) Motion
for Summary Judgment. Doc. 95. Plaintiff Michael McEvoy filed a response.
Docs. 112, 116. The Court previously converted Defendants’ motions to dismiss
to a motion for summary judgment and ordered limited discovery on the issue
of the statute of limitations only. Doc 80.
I.
BACKGROUND
A. The Formation of CEVA Logistics and CEVA Investments
Limited
Plaintiff Michael McEvoy began working Ryder Truck Lines in 1972. Doc.
96-1 at 17:15–18:9. He soon transitioned to a company called Customized
Transportation, which was acquired by CSX, which in turn was sold to TNT
Logistics, which Apollo purchased and merged with EGL, Inc. to form CEVA
Logistics in 2006. Id. at 18:7–19:4. CEVA Logistics is a subsidiary of CEVA
Group, a global freight management and supply chain logistics company. 97 at
1–2. CEVA Group itself was 99.9 percent owned by CEVA Investments Limited
(“CIL”), a Cayman Islands corporation, until 2013. Doc. 97 at 2. Apollo “held the
vast majority of CIL’s preferred and common shares.” Id. at 3.
Upon CEVA Logistics’ formation, management-level employees from TNT
and EGL, including McEvoy (“Management Investors”), were asked to purchase
equity in the Cayman Islands company that became CIL. Doc. 96-1 at 30:18–
20. They did so through a fund called the 2006 Long-Term Incentive Plan (“2006
LTIP”). Id. at 23:2–6. The investment was to “increase [directors and
employees’] personal interest in [CIL’s] growth and success . . . .” Doc. 96-2 at
3. McEvoy invested approximately €10,000 in the 2006 LTIP. Doc. 96-1 at 23:6.
He received and reviewed the 2006 LTIP Agreement when he invested. Id. at
28:22–29:6.
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B.
CIL’s 2013 Restructuring
According to Marvin Schlanger, the Chief Executive Officer of CEVA
Group from 2012 to 2014, due to financial problems in “mid-2012 into 2013,”
“CEVA Group’s management determined that CEVA’s only choice for survival
was a financial restructuring.” Doc. 97 at 2. In April 2013, CEVA Group
performed a “major debt-for-equity exchange” (“2013 Transaction”). Id. CEVA
Group converted much of CIL’s debt into equity ownership of a new entity called
CEVA Holdings, LLC (“CEVA Holdings”), diluting CIL’s ownership of CEVA
Group. Id. The transaction led to the de-valuation of CIL’s ownership of CEVA
Group from 99.9 percent to .01 percent, effectively wiping out all previous
investment in CIL, including the 2006 LTIP shares’ value. Id. On April 2, 2013,
CIL entered provisional liquidation proceedings in the Cayman Islands. Doc. 98
at 1. According to Schlanger’s declaration, “[n]o CIL shareholder, including
[Apollo]. . . recovered anything on account of their investment in CIL in the 2013
Restructuring or thereafter,” and a “collateral but inevitable consequence of the
2013 Transaction was the dissolution” of the 2006 LTIP. Doc. 97 at 2–3.
Three holders of CIL’s unsecured debt filed an uncontested involuntary
Chapter 7 petition against CIL in the United States Bankruptcy Court for the
Southern District of New York on April 22, 2013, which the Bankruptcy Court
granted, appointing a Chapter 7 Trustee (“Trustee”). In re CIL Ltd., 582 B.R.
46 (Bankr. S.D.N.Y. 2018), amended on reconsideration, No. 13-11272-JLG,
3
2018 WL 3031094 (Bankr. S.D.N.Y. June 15, 2018) (“Bankruptcy Proceeding”).
On December 8, 2014, the Trustee filed a complaint in the Bankruptcy
Proceeding against CIL directors Gareth Turner and Mark Beith, CEVA Group,
and CEVA Holdings, alleging that Apollo orchestrated a fraudulent transfer of
CIL’s interest in CEVA Group to CEVA Holdings without consideration. Doc.
96-12. The complaint alleged that “Apollo engineered, directed and caused a
secretive transaction that divested CIL of CEVA Group, its primary asset, for
no consideration, while leaving behind CIL’s liabilities and rendering CIL
insolvent.” Id. at 4. Creditors have also filed direct claims against CEVA
Logistics AG in New York Supreme Court in 2019, an action that, as of this
Court’s last update, has been stayed. Doc. 121 at 1, 2.
C.
CIL’s Communications to McEvoy
In December 2012, CEVA Logistics informed McEvoy that due to general
cutbacks, he would be laid off in March 2013. Doc. 96-1 at 24:14–18. He
exercised his put rights to sell his 2006 LTIP shares at their present value on
January 21, 2013, and was informed the following day that they could be
purchased back on April 1, 2013, and that their most recent value was
approximately €50 per share. Doc. 112-35 at 5–6. His last day at CEVA was
March 31, 2013. Id. at 7. CEVA Logistics temporarily re-hired him as an
independent contractor from October through December 2013 to help start a
new logistics contract. Doc. 96-1 at 136:20–37:16; 137:23–25.
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CIL informed McEvoy of the 2006 LTIP dissolution and CIL’s lack of
value via registered letter dated April 5, 2013, stating that “[t]he directors of
[CIL] have received advice from valuation and restructuring professionals that
[CIL’s] shareholding in CEVA is now without value, in consequence of the
financial condition of CEVA. You may have seen, or shortly will see, press
announcements concerning the proposed restructuring of CEVA.” Doc. 96-3 at
2. The letter further stated that “[i]n light of [CIL’s] and CEVA’s financial
condition, we have been advised that it is unlikely that there will be any
recoveries for shareholders of [CIL] in their capacities as shareholders.” Id. at 3.
CIL sent another letter announcing the appointment of Joint Provisional
Liquidators (“JPLs”) as part of the Cayman Islands liquidation proceedings on
April 8, 2013. Doc. 98-1. On April 17, 2013, the JPLs sent a letter to twenty to
thirty Management Investors who had contacted the JPLs with questions. Doc.
112-29 at 125. The document has a question and answer section on CIL’s
condition and the 2006 LTIP, confirming to Management Investors that the
company had no value, and that “no alternative investment is being offered to
the [s]hareholders, nor is there any exchange offer being offered to the
[s]hareholders.” Doc. 98-2 at 4. The letter explained that the liquidation was
performed “pursuant to the irrevocable proxy and power of attorney granted to
Apollo Management VI, L.P.” in the 2006 LTIP Agreement. Id. at 3. Schlanger
instructed the attorneys drafting the letter to exclude “reference to any new
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equity plans . . . [because the] letter [would be] going to a lot of people who no
longer are with the Company and have nothing to do with any new plans.” Doc.
97-7 at 3. This was, he explained in his declaration to the Court, to avoid
creating an “impression that those former employees were eligible to participate
in the 2013 CEVA Holdings LTIP” (discussed below). Doc. 97 at 6. While
McEvoy does not recall reading the question and answer document, he received
an email with an identically named attachment. Doc. 96-1 at 88:23–90:1.
The JPLs sent another letter on June 14, 2013 informing Management
Investors that CIL was insolvent, listing the names of the Management
Investors who had been represented as part of the bankruptcy proceedings, and
stating that there was an involuntary Chapter 7 bankruptcy proceeding taking
place against CIL in the Southern District of New York. Docs. 98-3; 112-39.
On March 4, 2014, McEvoy corresponded with the JPLs, now the Joint
Official Liquidators, asking for documentation that his “investments [were]
worthless” for “US tax purposes.” Doc. 98-4 at 4. They confirmed with
documentation, and McEvoy claimed a $10,000 loss in his tax returns for 2013.
Docs. 96-7 at 2; 98-4.
Between 2013 and 2017, McEvoy discussed his loss multiple times,
including with an attorney who advised him not to pursue a case, and with
present and former CEVA employees. Doc. 96-1 at 37:20–46:22; 69:19–71:2.
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D.
The 2013 LTIP
According to Schlanger, in order to “take steps to try and maintain morale
at the company,” the newly-formed CEVA Holdings “developed a new incentive
program, which was formally adopted as the 2013 CEVA Holdings LTIP” (“2013
LTIP”). Doc. 97 at 3. CEVA employees with ranks of M-4 and higher received
restricted stock options and penny stock options, and those ranked M-3 and
below received cash awards. Id. The cash awards were in amounts “equal to
60% of [eligible] employees’ prior net cumulative investments in CIL and vested
over a five-year period.” Doc. 97 at 4. The President of CEVA Americas
instructed management to “not be shy of reminding [Management Investors]
that their equity has been converted into new plans.” Doc. 112-12 at 2 (emphasis
in original).
CEVA Holdings’ Third Quarter Interim Financial Statements, released
November 18, 2013, announced that “[a] new management equity plan”
including cash compensation “replaced the previous plan that was administered
by CIL Limited and cancelled as part of the Recapitalization.” Doc. 97-4 at 23.
CEVA Holdings’ 2013 Annual Report, released on February 28, 2014, also
discussed the plan. Doc. 97-6 at 14–15.
The Loadstar, an U.K.-based logistics news source founded in 2012,
published an article on Management Investors’ losses due to the 2013
Transaction on August 19, 2013. Doc. 72-2. Titled “CEVA staff say they were
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‘press-ganged’ into investment that lost them thousands,” the article stated that
Management Investors had invested between €10,000 and as much as €400,000,
had felt pressured to invest in the 2006 LTIP, and that some had recovered 60
percent of their investment under a new equity scheme. Id. at 2, 4. The article
also stated that some investors and lenders were considering or involved in
litigation in the Cayman Islands and New York. Id. at 1, 2. The article quoted
Schlanger stating that “we have given people the opportunity to participate in
a new equity plan. If the company performs, they can perform as much or more
than their initial investment. We think we’ve treated everyone fairly.” Doc. 722 at 3. The Loadstar published another article using the same quote from
Schlanger in 2015. Doc. 96-14.
E. McEvoy’s Original Complaint and New York Bankruptcy
Court-Imposed Stay
On August 3, 2017, McEvoy filed a putative class action lawsuit (“Original
Complaint”) in this Court against Apollo Global Management, Turner, and
Beith for losses, alleging self-dealing and fraudulent conversion. Doc. 1. The
Trustee filed a motion in the New York Bankruptcy Court to enjoin McEvoy’s
case on October 18, 2017, arguing the claims McEvoy asserted were derivative
claims that were property of CIL’s estate. In re CIL Ltd., No. 13-11272-JLG,
2018 WL 878888, at *1 (Bankr. S.D.N.Y. Feb. 9, 2018). The Bankruptcy Court
agreed, declaring McEvoy’s putative class action in this Court “null and void ab
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initio.” Id. at *12. McEvoy moved the Bankruptcy Court to permit him to amend
his complaint to assert direct claims, proposing an amended complaint that
excluded defendants Turner and Beith and added defendants CEVA Group and
Apollo Management VI. Doc. 31 at 4. On October 16, 2018, the New York
Bankruptcy Court allowed McEvoy to file the proposed amended complaint.
Doc. 31-2.
On December 7, 2018, McEvoy filed the Amended Class Action Complaint
in this Court (“Amended Complaint”), alleging total losses of approximately
€30,000,000. Doc 35. In addition to naming new defendants, the Amended
Complaint alleges a new injury: that the named Defendants caused alleged
class members “to not receive, or not equally receive, a required adjustment” as
part of CEVA’s 2013 restructuring. Id. ¶ 15. The Amended Complaint raised
one claim under the Investment Advisors Act that the Court dismissed. Doc. 80.
Defendants’ Motion for Summary Judgment on the statute of limitations alone,
Doc. 95, is now ripe. 1
On a motion for summary judgment, the Court cannot weigh evidence,
but rather can only rule on undisputed facts in the record. When a motion for
summary judgment is based on a statute of limitations, “the moving party must
establish that ‘the record taken as a whole could not lead a rational trier of fact
to find for the non-moving party’ on the timeliness issue.” 100079 Canada, Inc.
v. Stiefel Lab’ys, Inc., 954 F. Supp. 2d 1360, 1368 (S.D. Fla. 2013), aff’d, 596 F.
App’x 744 (11th Cir. 2014) (quoting Ashcroft v. Randel, 391 F. Supp. 2d 1214,
1219 (N.D. Ga. 2005)). “Summary judgment may not be granted when the
record indicates a material fact is in dispute or if it seems desirable to inquire
1
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II.
ANALYSIS
A.
Statute of Limitations
Under the terms of the 2006 LTIP Agreement, Delaware law governs this
dispute. The applicable statute imposes a three-year limitations period on
claims for breach of fiduciary duty. DEL. CODE ANN. tit. 10, § 8106. 2 “The
general law in Delaware is that the statute of limitations begins to run, i.e., the
cause of action accrues, at the time of the alleged wrongful act, even if the
plaintiff is ignorant of the cause of action.” In re Dean Witter P’ship Litig., No.
CIV. A. 14816, 1998 WL 442456, at *4 (Del. Ch. July 17, 1998), aff’d, 725 A.2d
441 (Del. 1999). The Court determines that for the purposes of this Order on
the statute of limitations, McEvoy’s cause of action alleged in the Amended
Complaint accrued under Delaware law on June 11, 2013, the date the 2013
LTIP became effective. 3 Doc. 97-6 at 14–15. Absent tolling, the limitations
period expired on June 11, 2016.
more thoroughly into the facts in order to clarify the application of law to the
circumstances.” Eluv Holdings (BVI) Ltd. v. Dotomi, LLC, C.A. No. 6894-VCP,
2013 WL 1200273, at *4 (Del. Ch. Mar. 26, 2013).
Under Delaware law, the result here will be the same regardless,
whether this is addressed under the statute of limitations or the doctrine of
laches. See Kraft v. WisdomTree Invs., Inc., 145 A.3d 969, 973–76 (Del. Ch.
2016) (explaining the application of the statute of limitations or laches in the
Delaware Court of Chancery, and noting that courts generally apply the statute
of limitations by analogy to cases where laches applies).
2
See ¶ 15 of the Amended Complaint, which claimed that Defendants
“caused members of the Management Co-Investors to not receive, or not equally
3
10
Because the New York Bankruptcy Court declared the Original
Complaint void ab initio, Defendants argue that the filing date is that of the
Amended Complaint, December 7, 2018. (Doc. 95 at 17 n.82). McEvoy argues
that because the New York Bankruptcy Court permitted him to amend, the
operative date of filing should be that of the Original Complaint on August 3,
2017.
Whether or not the Original Complaint is void, the claims raised in the
Amended Complaint do not relate back. This Circuit views “Rule 15(c)(1) as
incorporating state law relation-back rules when the law of that state provides
the statute of limitations for an action.” Saxton v. ACF Indus., Inc., 254 F.3d
959, 963 n.6 (11th Cir. 2001). Under Delaware law, new arguments of law relate
back, but new facts generally do not. See Cent. Mortg. Co. v. Morgan Stanley
Mortg. Cap. Holdings LLC, No. 5140-CS, 2012 WL 3201139, at *18 (Del. Ch.
Aug. 7, 2012) (finding that new disputed transactions that were otherwise
identical to previously alleged transactions constituted time-barred new facts);
id. at *18 n.156 (collecting cases distinguishing new allegations of fact, which
are subject to the statute of limitations, and new allegations of law, which relate
back). The key question is whether the preceding complaint put defendants “on
receive, a required adjustment during the 2013 Transaction.” Doc. 35.
Defendants may be correct that McEvoy “mistakenly” alleges that the 2013
LTIP was an adjustment to the 2006 LTIP, Doc. 95, but whether or not this was
the case is not at question in this Motion.
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notice” of the new claims. Quadrant Structured Prod. Co., Ltd. v. Vertin, No.
6990-VCL, 2015 WL 6157759, at *20 (Del. Ch. Oct. 20, 2015). The Amended
Complaint adds new defendants and is based on a new factual premise: that the
2013 LTIP, including the cash awards, was in fact a continuation or “required
adjustment” to employees’ 2006 LTIP investments. Doc. 35 ¶ 15. This new claim
does not relate back to the Original Complaint, and so the Original Complaint’s
August 3, 2017 date of filing does not apply.
On November 30, 2017, McEvoy informed the New York Bankruptcy
Court that if not for the stay, he would file an Amended Complaint
incorporating allegations relating to the 2013 LTIP in this Court. Doc. 112-46
at 3 n.1. At that point, Defendants had notice of McEvoy’s new claims, but
McEvoy could not file an amended complaint until the Bankruptcy Court
permitted him to do so, which it did not do until October 2018. Therefore, the
Court will constructively treat the date of filing of the operative Amended
Complaint in this Court as November 30, 2017.
As the date of filing of the Amended Complaint is November 30, 2017,
well after the date of expiration of the statute of limitations on June 11, 2016,
McEvoy must allege and prove that his claim was tolled from June 11, 2013 to
at least November 30, 2014 to be timely.
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B.
Tolling Doctrines
Delaware has three doctrines that toll the statute of limitations: (1)
inherently unknowable injuries; (2) fraudulent concealment; and (3) equitable
tolling. In re Dean Witter, 1998 WL 442456, at *5–*6. McEvoy argues that “any
or all theories available” apply. Doc. 112 at 22. The plaintiff “bear[s] the burden
of pleading specific facts to demonstrate that the statute of limitations was, in
fact, tolled.” In re Dean Witter, 1998 WL 442456, at *6. 4 The plaintiff must
plead “either that he was diligently and productively pursuing his rights before
the statute of limitations expired or that he was precluded from doing so based
on some unusual and unanticipated change in circumstances.” Forman v.
CentrifyHealth, Inc., No. CV 2018-0287-JRS, 2019 WL 1810947, at *9 (Del. Ch.
Apr. 25, 2019). “What constitutes unreasonable delay and prejudice [for the
delay in bringing a claim] are questions of fact that depend upon the totality of
the circumstances.” Deputy v. Deputy, No. CV 10874-VCZ, 2020 WL 1018554,
at *47 (Del. Ch. Mar. 2, 2020) (quoting Hudak v. Procek, 806 A.2d 140, 153 (Del.
2002)).
The Delaware court has explained the three tolling doctrines and their
application:
The Court has noted that the plaintiff is supposed to plead a basis for
tolling the statute of limitations, which McEvoy has not, but that his complaint
may be amended. Doc. 81 at 22:4–9.
4
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Under the doctrine of inherently unknowable injuries, the statute
[of limitations] will not run where it would be practically
impossible for a plaintiff to discover the existence of a cause of
action. No objective or observable factors may exist that might
have put the plaintiffs on notice of an injury, and the plaintiffs
bear the burden to show that they were blamelessly ignorant of
both the wrongful act and the resulting harm.
[]
Similarly, the statute of limitations may be disregarded when a
defendant has fraudulently concealed from a plaintiff the facts
necessary to put him on notice of the truth. Under this doctrine, a
plaintiff must allege an affirmative act of actual artifice by the
defendant that either prevented the plaintiff from gaining
knowledge of material facts or led the plaintiff away from the
truth.
[]
Finally, the doctrine of equitable tolling stops the statute from
running while a plaintiff has reasonably relied upon the
competence and good faith of a fiduciary. No evidence of actual
concealment is necessary in such a case, but the statute is only
tolled until the investor knew or had reason to know of the facts
constituting the wrong.
In re Tyson Foods, Inc., 919 A.2d 563, 584–85 (Del. Ch. 2007) (quotation marks
omitted).
By June 2013 McEvoy had already been let go from CEVA, had been
informed that his shares in the 2006 LTIP were worthless, did not receive any
notification from the company regarding the new LTIP, and was not a
shareholder of the newly-formed CEVA Holdings, in whose financial statements
the 2013 LTIP was discussed. The newspaper that mentioned the 2013 LTIP in
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an article was a recently formed online source, not a paper of record. However,
it is too much to say that it would be “practically impossible” for McEvoy to have
discovered the grounds of his action: the 2013 LTIP was mentioned, briefly, in
CEVA Holdings’ financial reports, and in the Loadstar article. Therefore, the
doctrine of inherently unknowable injuries does not toll the statute of
limitations.
However, based on the record before the Court on the motion for summary
judgment, a reasonable jury could find that there was fraudulent concealment
because Defendants used “actual artifice” to prevent McEvoy from learning of
his injury. In re Dean Witter, 1998 WL 442456, at *5. There is some evidence
that Defendants attempted to conceal the existence of the 2013 LTIP from nonparticipating Management Investors. Schlanger stated that communications to
former CEVA employees were intentionally different than those to present
CEVA employees. Doc. 116-2 at 63:8-17. Defendants argue that these
differences “demonstrate[] Defendants’ good faith” and were intended to “avoid
confusion.” Doc. 117 at 6–7. This is not an undisputed fact. While much of
McEvoy’s fraudulent concealment argument relies on edits to the April 17, 2013
question and answer document, which McEvoy did not even recall reading, the
document sheds light on CEVA executives’ communications strategy and
purposeful concealment of the 2013 LTIP to non-participating Management
Investors. Doc. 98-2. There is a genuine question of material fact as to whether
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there was actual artifice in concealing the creation of the 2013 LTIP that
precludes summary judgment.
Finally, the doctrine of equitable tolling requires that the plaintiff
“reasonably relied upon the competence and good faith of a fiduciary” until he
had notice of his claim. In re Tyson, 919 A.2d at 585. “Underlying this doctrine
is the idea that even an attentive and diligent investor relying, in complete
propriety, upon the good faith of fiduciaries may be completely ignorant of
transactions that . . . constitute self-interested acts injurious” to the plaintiff.
In re Dean Witter, 1998 WL 442456, at *6. The Court has not heard argument
on whether Defendants acted as fiduciaries to McEvoy and other Management
Investors. Therefore, the issue is not ripe for summary judgment.
C.
Inquiry Notice
All three tolling doctrines only toll the statute of limitations until the
plaintiff is on “inquiry notice . . . .” In re Dean Witter, 1998 WL 442456, at *8.
Inquiry notice takes place “upon the discovery of facts constituting the basis of
the cause of action . . . .” Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d
312, 319 (Del. 2004) (internal quotation marks omitted). Inquiry notice occurs
when the plaintiff “encounter[ed] facts that reasonably should arouse suspicion”
and “lead to an investigation capable of producing facts sufficient to allow the
plaintiff to file a complaint capable of surviving a motion to dismiss.” Gallagher
Indus., LLC v. Addy, No. 2018-0106-SG, 2020 WL 2789702, at *13 (Del. Ch.
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May 29, 2020). If McEvoy was on inquiry notice before November 30, 2014, three
years before the constructive filing date of the Amended Complaint, his claim
is time-barred.
Delaware courts are generally reluctant to permit an investor who has a
“red flag[]” that they may have been injured to argue tolling, even if they do not
know the full extent of their injuries. Gallagher, 2020 WL 2789702, at *13
(citation omitted). A red flag may come in the form of “inherently contradictory
information” alerting an investor to a potential claim. In re Dean Witter, 1998
WL 442456, at *9. It may also be a communication signaling a change in the
corporate structure, such as a letter announcing a “tremendous amount of
change . . . .” Silverberg v. Padda, No. 2017-0250-KSJM, 2019 WL 4566909, at
*11 (Del. Ch. Sept. 19, 2019) (internal quotation marks omitted) (citing
documents in that case’s record). It is not unreasonable to argue that McEvoy
should have been on inquiry notice in 2013 when he was informed that his
shares, which had previously been worth €50 each, were suddenly worth €0.
McEvoy had the 2006 LTIP Agreement in his possession, which he alleges
mandates adjustments to his investment. An online newspaper published an
article mentioning that some Management Investors were receiving 60 percent
of their initial investments back. Finally, McEvoy could see that CEVA
continued to exist as an operating company after he was let go, to the point that
it hired him temporarily to start up a new contract.
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However, losing an investment would not necessarily put a reasonable
investor on notice that others who had lost theirs were being given an
opportunity to recover some of their lost value, especially in the face of repeated
statements that CIL was worthless or that all other investors had lost all value.
McEvoy was not a shareholder in CEVA Holdings and therefore cannot
necessarily be expected to review its financial reports. The existence of one news
article—especially one in a foreign, online news source that had only existed for
a year—is not sufficient grounds to rule as a matter of law that McEvoy was on
inquiry notice. Cf. Burrell v. Astrazeneca LP, No. CIV.A. 07C-01-412(SER),
2010 WL 3706584, at *6 n.64 (Del. Super. Ct. Sept. 20, 2010) (determining that
articles published in papers of record including the New York Times and Wall
Street Journal, combined with other other sources of information, provided
notice). The Court is not prepared to rule as a matter of law that McEvoy was
on inquiry notice as to his 2013 LTIP claims prior to November 30, 2014.
There are triable issues of material fact as to whether tolling applies to
McEvoy’s injury, and if so, when he was on inquiry notice.
Accordingly, it is hereby
ORDERED:
1.
Defendants’ Joint Motion for Summary Judgment (Doc. 95) is DENIED.
2.
Plaintiff shall file a Second Amended Class Action Complaint that alleges
the basis for his tolling arguments no later than July 23, 2021.
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3.
Defendants shall respond to the Second Amended Class Action Complaint
no later than August 20, 2021. If so advised, Defendants may renew their
motions to dismiss on grounds not addressed in the Court’s previous Order (Doc.
80). The Court will wait to require a Case Management and Scheduling Report
until the pleadings are settled.
DONE AND ORDERED in Jacksonville, Florida the 29th day of June,
2021.
agb
Copies:
Counsel of record
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