Goldstein v. Puda Coal, Inc. et al

Filing 639

MEMORANDUM OPINION AND ORDER.....The plaintiffs motion to appoint Seiden as Receiver of Puda is denied. The plaintiffs shall provide, by December 19, a proposal for the allocation of the $125,000 in MSPC settlement funds. (Signed by Judge Denise L. Cote on 12/16/2016) (gr)

Download PDF
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------- X : IN RE PUDA COAL SECURITIES INC., : et al. LITIGATION : : This document relates to: ALL : ACTIONS. : X ---------------------------------- : : SECURITIES AND EXCHANGE : COMMISSION, : : Plaintiff, : -v: : MAQUARIE CAPITAL (USA) INC., ET : AL., : : Defendants. : : ---------------------------------- X APPEARANCES: Counsel for Plaintiffs and the Class: Laurence M. Rosen Phillip Kim Sara E. Fuks Yu Shi The Rosen Law Firm, P.A. 275 Madison Avenue, 34th Floor New York, New York 10016 Lionel Z. Glancy Robin B. Howald Robert V. Prongay Coby M. Turner Casey E. Sadler Glancy Binkow & Goldberg LLP 1925 Century Park East, Suite 2100 Los Angeles, California 90067 11cv2598 (DLC) and all member and related cases MEMORANDUM OPINION AND ORDER 15cv2304 (DLC) Marc I. Gross Jeremy A. Lieberman Fei-Lu Qian Pomerantz Haudek Grossman & Gross LLP 100 Park Avenue, 26th Floor New York, New York 10017 Patrick V. Dahlstrom Leigh Handelman Smollar Pomerantz Haudek Grossman & Gross LLP 10 South LaSalle Street, Suite 3505 Chicago, Illinois 60603 Frederic S. Fox Jeffrey P. Campisi Pamela A. Mayer Kaplan Fox & Kilsheimer LLP 850 Third Avenue New York, New York 10022 Daniel Hume David E. Kovel Kirby McInerney LLP 825 Third Avenue New York, New York 10022 DENISE COTE, District Judge: On December 2, 2016, the plaintiffs in the above-captioned class action submitted a proposed Notice of Settlement (“Notice”) for approval. The Notice outlines a plan of distribution for $125,000 in settlement funds from a pending settlement with defendant Moore Stephens, P.C (“MSPC”). The Notice designates $50,000 “to fund the initial costs of hiring a receiver to take control over Puda [Coal, Inc.]’s assets and to pursue claims against Puda and [its former Chairman] in China.” In conjunction with said Notice, the plaintiffs filed a motion to appoint Robert Seiden (“Seiden”) as Receiver of Puda, 2 a Delaware corporation. On December 12, the Court issued an order directing the plaintiffs to explain why they should not be required to apply to a Delaware court for receivership over Puda. 14. The plaintiffs filed their responsive letter on December For the reasons set forth below, the plaintiffs’ motion to appoint Seiden as Receiver for Puda is denied. DISCUSSION Puda is a foreign corporation incorporated in the State of Delaware. The plaintiffs have not identified any Puda assets located in the Southern District of New York. Accordingly, equity does not favor the exercise of jurisdiction over Puda by this Court. See, e.g., Rogers v. Guaranty Trust Co. of N.Y., 288 U.S. 123, 130 (1933) (“It has long been settled doctrine that a court -- state or federal -- sitting in one State will as a general rule decline to interfere with or control by injunction or otherwise the management of the internal affairs of a corporation organized under the laws of another state but will leave controversies as to such matters to the courts of the state of the domicile.”); Maguire v. Mortgage Co. of Am., 203 F. 858, 859 (2d Cir. 1913) (“[I]t is alone for the state which creates a corporation to provide for its dissolution and winding up.”); Frankland v. Remington Phonograph Corp., 119 A. 127, 128 (Del. Ch. 1922) (“That such other courts can administer the assets of a foreign corporation found in their jurisdiction is 3 beyond doubt. That they can, however, go so far as to appoint a general receiver for such corporation, would on principle appear equally beyond doubt as not tenable.”); 17A Fletcher Cyc. Corp. § 8554 (“[J]urisdiction can be exercised only by courts of the state in which the corporation was created. . . . Courts will not . . . appoint a receiver for a foreign corporation where to do so would amount to interference with its internal affairs.”); 36 Am. Jur. 2d Foreign Corps. § 384 (“A receiver of the assets of a foreign corporation, as distinguished from a receiver of the corporation, may be appointed if the circumstances justify such an appointment.”); cf. Burnrite Coal Briquette Co. v. Riggs, 274 U.S. 208, 212 (1927) (noting that a federal court may, under its general equity powers, appoint a temporary receiver over a foreign corporation “to prevent threatened diversion or loss of assets through gross fraud and mismanagement of its officers”). 4 CONCLUSION The plaintiffs’ motion to appoint Seiden as Receiver of Puda is denied. The plaintiffs shall provide, by December 19, a proposal for the allocation of the $125,000 in MSPC settlement funds. Dated: New York, New York December 16, 2016 ____________________________ DENISE COTE United States District Judge 5

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?