CBF Industria De Gusa S/A et al v. Amci Holdings,Inc., et al

Filing 116

OPINION: For the foregoing reasons, the Defendants' motion to dismiss is denied. (Signed by Judge Robert W. Sweet on 6/15/2018) (tro)

'

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

-------------------------------------x
CBF INDUSTRIA DE GUSA S/A, DA TERRA
SIDERURGICA LTDA, FERMUGAR - FERRO
GUSA DO MARANHAO LTDA, FERGUMINAS
SIDERURGICA LTDA, GUSA NORDESTE S/A,
SIDEPAR - SIDERURGICA DO PARAS/A,
SIDERURGICA UNIAO S/A,
13 Civ. 2581

Plaintiff,

OPINION

-againstAMCI HOLDINGS, INC., AMERICAN METALS
& COAL INTERNATIONAL, INC., K-M
INVESTMENT CORPORATION, PRIME CARBON
GMBH, PRIMETRADE, INC., HANS MENDE,
FRITZ KUNDRUN,
Defendants.

-------------------------------------x
APPEARANCES:
Attorneys for Plaintiff
DAY PITTNEY LLP
Seven Times Square
New York, NY 10036
By:
Adam K. Grant, Esq.
Elizabeth J. Sher, Esq.
Jonathan S. Zelig, Esq.
Attorneys for Defendants
BUCHANAN INGERSOLL & ROONEY, PC
1290 Avenue of the Americas, 30 th Floor
New York, NY 10104
By:
Stuart P. Slotnick, Esq.
BUCHANAN INGERSOLL & ROONEY, PC
One Oxford Centre, 20 th Floor
301 Grant Street
Pittsburgh, PA 15219
By:
Kevin P. Lucas, Esq.
1

(RWS)

i

Sweet, D.J.

Defendants AMCI Holdings,
American Metals

&

Inc.

( "AMCI Holdings") ,

Coal International, Inc.

( "AMCI

International"), K-M Investment Corporation ("K-M Investment"),
Prime Carbon GmbH ("Prime Carbon"),

Primetrade, Inc.

("Primetrade"), Hans Mende ("Mende"), and Fritz Kundrun
("Kundrun")

(collectively, the "Defendants"), bring this motion

to dismiss pursuant to Federal Rule of Civil Procedure 12(b) (6),
on remand from the United States Court of Appeals for the Second
Circuit, to dismiss the Amended Complaint (the "AC") of
Plaintiffs CBF Ind0stria de Gusa S/A ("CBF Ind0stria de Gusa"),
Da Terra Sider0rgica LTDA ("Da Terra Sider0rgica"), Fergumar
Ferro Gusa do Maranh§o LTDA ("Fergumar - Ferro Gusa do
Maranh§o"), Ferguminas Sider0rgica LTDA ("Ferguminas
Sider0rgica"), Gusa Nordeste S/A ("Gusa Nordeste"), SideparSider0rgica do Par§ S/A ("Sidepar-Sider0rgica do Par§"), and
Sider0rgica Uni§o S/A ("Sider0rgica Uni§o")

(collectively, the

"Plaintiffs"). Specifically, Defendants contend that Plaintiffs,
in their AC, fail to state a claim upon which relief may be
granted under the New York Convention, Chapter 2 of the Federal
Arbitration Act

("FAA"), and the applicable law of the Southern

District of New York. Based on the facts and conclusions set
forth below, the Defendants' motion to dismiss is denied.
2

Plaintiffs are permitted to conduct discovery regarding the
fraud claims.

I.

Facts & Prior Proceedings

The facts pertinent to the present motion are set
forth in the AC, the contracts entered into between Plaintiffs
and Steel Base Trade, AG ("SBT") between January 1, 2008 and
September 17, 2008

(the "Contracts"), the International Chamber

of Commerce Award ("ICC Award")

incorporated in the AC, and

matters of public record, of which this Court has taken judicial
notice, in the SBT Bankruptcy referred to in the ICC Award.

1

The

facts are assumed true for the purpose of this motion to
dismiss.

See Koch v. Christie's Int'l PLC,

699 F.3d 141, 145 (2d

Cir. 2012).

Plaintiffs are a group of foreign companies organized
under the laws of, and with their offices located in, Brazil.
They produce and supply "pig iron," which is a type of
"intermediate metal made by smelting iron ore with high-carbon

Courts may "take judicial notice of a document filed in another court .
to establish the fact of such litigation and related filings." Rates
Tech. Inc. v. Speakeasy, Inc., 685 F.3d 163, 167 n.3 (2d Cir. 2012) (quoting
Global Network Commc'n, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir.
2006)); see also Rothman v. Gregor, 220 F.3d 81, 92 (2d Cir. 2000) (taking
judicial notice of complaint in another action as a public record on a motion
to dismiss).

3

fuel." Am. Compl.

27, ECF No. 47. Pig iron can then be further

~

refined to become steel or wrought iron.

Defendants are a group of interrelated companies
(collectively, the "Corporate Defendants") and two individuals,
Hans Mende and Fritz Kundrun (collectively, the Individual
Defendants"). According to Plaintiffs, the Individual Defendants
financially control, directly or indirectly, the Corporate
Defendants.

In 2008, Plaintiffs and SBT entered into a series of
contracts wherein SBT agreed to buy 103,500 metric tons of pig
iron for more than $476 million (the "Contracts").

Id.

~

34.

Within a short period of signing the Contracts, following the
financial crisis in late 2008 and the attendant collapse in
commodity prices (including pig iron), SBT ceased purchasing pig
iron under the Contracts.

Id.

~

41. Following SBT's breach,

Plaintiffs contacted SBT and requested that SBT fulfill its
obligations.

Id.

~

42. In response, on November 20, 2008, an SBT

representative said:
You know our group and it is not our style to walk
away from obligations .
. We will need a long time
to work this out together. My message to your group
is: we are not walking away!!!

4

t

Id.

~

42. SBT remained in default and did not purchase any

further pig iron as required by the Contracts. Id.

43.

~

Plaintiffs first became aware that this assurance was false when
they learned, through publicly available shipping records, that
SBT was purchasing pig iron from other suppliers.

On November 16, 2009,

Id.

Plaintiffs submitted their

dispute with SBT (the "Arbitration") to the ICC Paris.

Id.

~

47.

Thereafter, SBT requested an extension of time to respond to
Plaintiffs' arbitration demand, and the ICC Paris granted SBT
until January 27, 2010 to respond.

Id.

~

48. During that

extension of time, on January 11, 2010, Prime Carbon made its
first purchase of pig iron in the Brazilian market.

Id.

~

49.

Given the limited size of the pig iron market, Plaintiffs
decided to investigate newcomer Prime Carbon and its purchase.
Id.

On January 15, 2010, Plaintiffs wrote to the ICC Paris
to express their concern that they were being defrauded by SBT,
which appeared to be "transferring its business operations and
assets to Prime Carbon." Id.

~

50. Ten days later, SBT responded

to the ICC Paris (the "January 25 th Statement"):
[SBT] does not try to evade from its obligations[.]

5

It is true that the website www.steelbasetrade.com was
shut down at the beginning of January 2010[.] The
reason is that [SBT] first has to analyze [its]
position regarding pending or imminent claims for
damages from purchasers as well as against suppliers
as well as [its] financial situation[.] Therefore,
[SBT] has at least temporarily suspended [its]
business activities. Please note, however, [SBT] is
still existing and has not resolved to be dissolved
and liquidated.
Id. 1 51. Plaintiffs allege that, although they did not know it
at the time, this statement was untrue, and was intended to
distract Plaintiffs and the ICC Paris while Defendants
effectuated their plan to steal SBT's assets. Defendants contend
that the January 25 th Statement was accurate when made.

See Reply

Br. in Support of Cert. Petition at 2, n.1.

According to Plaintiffs, notwithstanding SBT's
misrepresentations that it had not resolved to be liquidated and
dissolved,

SBT did not disclose to the ICC Paris or Plaintiffs

that, on December 27, 2009, it had already signed an agreement
transferring its business to Prime Carbon (the "Transfer
Agreement"). Am. Compl. 1 52. SBT also did not disclose to the
ICC Paris or Plaintiffs that it had sent letters to various of
its pig iron suppliers on January 18, 2010,
(i)

informing them that:

as of November 30, 2009, SBT had transferred
"all Goods and the respective title of the
Goods" to Prime Carbon;

6

(ii)

Prime Carbon was "the new and sole owner of the
Goods";

(iii)

Prime Carbon "assumes all rights with respect to
the transferred Goods"; and

(iv)

Prime Carbon "is willing to enter in all
contracts between your company and [SBT] and to
perform under the same conditions."

Id. i

53. The letters advised the suppliers "to act from the

time being only on instruction of Prime Carbon" and that
representatives of Prime Carbon would be contacting the
suppliers "within the next few days." Id. i 54. Thus, Plaintiffs
allege, while telling the Plaintiffs and the ICC Paris on
January 25 th that SBT "is still existing and ha[d] not resolved
to be dissolved and liquidated," Defendants already had started
effectuating a plan to make SBT an assetless and judgment proof
company via the Transfer Agreement.

Id. i i 45, 51.

Under the terms of the Transfer Agreement,

Plaintiffs

allege, SBT transferred $126 million in assets to Prime Carbon,
as well as liabilities of $130 million, in exchange for $1.

Id.

i 59. The assets transferred to Prime Carbon included SBT's main
asset, its U.S. subsidiary, Primetrade USA, through a transfer
of the 1,000 shares of Primetrade USA's Common Capital Stock on
December 27, 2009. Id. SBT also transferred, among other things,
7

shares of an Aruba limited liability company, Steel Base Trade
A.V.V.

("SBT Aruba"), pursuant to the Transfer Agreement and a

blocking certificate dated January 18, 2010.

Id.

~

60.

The Transfer Agreement between SBT and Prime Carbon
was signed on behalf of Prime Carbon by Thomas Buerger, a former
director of SBT, and the then-Chief Financial Officer of AMCI
Capital,

and a director of SBT's parent company, Defendant AMCI

International.

Id.

~

58. Plaintiffs allege that following the

effectuation of the Transfer Agreement,
least five of the same directors as SBT;
SBT's employment contracts;

Prime Carbon (a)
(b)

had at

assumed ten of

(c) appointed Defendant Mende to

serve as the president of the Board of Directors; and (d)

at all

times shared an office address with SBT or AMCI International.

Id.

~~

66-68.

The Transfer Agreement was formally approved on
January 27, 2010 by SBT's and Prime Carbon's Supervisory Boards,
the same day SBT filed its response in the Arbitration.

Id.

~

65. Plaintiffs allege that SBT did not tell the ICC Paris about
this material change in the circumstances, or that its January
25 th Statement was untruthful or no longer operative.
Moreover,

Id.

Plaintiffs allege that although SBT was insolvent on

January 27, 2010, it was not put into bankruptcy until April 28,
8

,.

2010, though not before Defendants arranged to have SBT transfer
nearly all of its remaining cash to Prime Carbon.

Id.

~

78.

Following these developments, in June of 2010,
Plaintiffs asked the ICC Paris for discovery concerning SBT's
actions and sought interim relief to seize up to approximately
$42 million of SBT's assets, whether held by SBT or Prime Carbon
(the "Interim Relief"). See Arbitration Award, ECF Nos. 1-2, Ex.
M,

~

22. The ICC Paris held hearings concerning the Interim

Relief that SBT neither attended nor requested be postponed.
Thereafter, the ICC Paris sent SBT a list of questions
concerning,

inter alia, whether and to what extent SBT had

"transferred goods and respective titles of goods to Prime
Carbon AG .

. after being notified of the Request for

Arbitration." Id.

28. SBT did not provide a response to these

~

requests for information.

Id.

23-30.

~~

On March 29, 2011, SBT's bankruptcy administrator
informed the ICC Paris that SBT did not have funds sufficient to
participate in the Arbitration, and that "the estate and SBT's
creditors did not wish to defend the claims before the ICC
Paris." Am. Compl.

~

87. The bankruptcy administrator admitted

the claims against SBT as well as the damages sought by
Plaintiffs in the amount of CHF 51,756,269.75.
9

Id. On November

9, 2011, following this notice, the ICC Paris issued its final
Award in favor of Plaintiffs for $48,053,462.16 plus interest,
at rates detailed in the Award, incurred on this amount from
November 20, 2009, until the Award amounts are paid in full.
~

Id.

90. The Award also awarded Plaintiffs' arbitration costs and

legal fees in the amount of $360,000.

Id.

SBT's bankruptcy was declared closed on January 24,
2012, with no assets left to satisfy the Award.

Id.

~

89.

Plaintiffs were unable to collect the Award against SBT because,
as Plaintiffs allege, all of SBT's assets had been fraudulently
transferred to Prime Carbon. Id.

~

91. Plaintiffs told SBT that

Plaintiffs would seek to recover the amount owed from SBT.

Id.

~

92. SBT responded that Plaintiffs should not waste their time
bringing a claim and, relaying a comment made by Mende, stated:
"A naked man has no pockets." Id.

On April 18, 2013, Plaintiffs filed an action before
this Court to enforce the Award against Defendants as SBT's
alter egos and successors-in-interest pursuant to the Convention
(the "Enforcement Action.")

See Compl., ECF No. 1. The

Enforcement Action also alleged common law fraud and violations
of New York's fraudulent conveyance laws related to Defendants'
actions before the ICC Paris and thereafter (the "Fraud
10

Claims"). Defendants moved to dismiss the Enforcement Action on
numerous grounds,

including that the Award had not been

confirmed against SBT,

forum non conveniens, and that the Fraud

Claims were barred by the ICC Paris' ruling.

See Def's Br.

Motion to Dismiss Compl., ECF No. 23. The Enforcement Action's
Convention claims were dismissed on the grounds that Orion
Shipping & Trading Co. v. Eastern States Petroleum Corp.,
F.2d 299, 301 (2d Cir.),

cert. denied,

373 U.S. 949

312

(1963)

required Plaintiffs to first confirm the Award against SBT
before seeking to enforce the Award against Defendants. See
Opinion on First Motion to Dismiss, ECF No. 46.

Following this Court's decision,

Plaintiffs filed an

Amended Complaint on April 29, 2014 containing only the federal
enforcement cause of action. See Am. Compl. On this same day,
Plaintiffs filed an action seeking to confirm the Award against
SBT (the "Confirmation Action"). See Compl. It was during this
proceeding that Defendants disclosed SBT's removal from the
Swiss Commercial Registry, arguing that, as a result,

SBT was

immune from suit under Fed. R. Civ. P. 17 and that the
Confirmation Action must be dismissed. See Defs.' Motion to
Dismiss Confirmation Action, ECF No. 28 at 6. On March 12, 2015,
both the Enforcement and Confirmation Actions were dismissed on
the basis that Orion required a two-step process of confirmation
11

against SBT followed by enforcement against Defendants, and
because SBT's immunity from suit rendered confirmation
impossible. See Opinion on Motion to Dismiss, ECF No.

91.

Plaintiffs timely appealed the dismissal of both
actions, and on January 18, 2017, the Second Circuit issued its
initial ruling (the "Vacated Decision"). See CBF Industria de
Gusa v. AMCI Holdings, Inc.,

846 F.3d 35

(2d Cir. 2017). In

Section I.e. of the Vacated Decision, titled "Applicable Law for
an Enforcement Action," the Second Circuit cited to the analysis
set forth in First Options of Chicago, Inc. v. Kaplan,
938,

942

514 U.S.

(1995), and instructed this Court as follows:

Accordingly, on remand, the district court must first
consider whether the Contracts .
. provide clear and
unmistakable evidence that the parties .
. agreed to
have an arbitrator decide whether they decided to
arbitrate the question of whether a nonsignatory could
be bound to an award under the Contracts. If the
district court determines that the parties to the
Contracts did agree to have an arbitrator decide
whether they agreed to arbitrate the question of
whether a nonsignatory can be bound, then the district
court must refuse to decide the issue.
Vacated Decision at 47. Defendants moved for rehearing, which
the Second Circuit granted and heard on March 2, 2017. During
the Second Circuit's consideration of Defendants' rehearing
request, the New York City Bar Association ("NYCBA")

submitted

an amicus brief in which it argued that a First Options
arbitrability analysis would be improper in this case because
12

Plaintiffs were not seeking to enforce an arbitration agreement;
they were seeking to enforce an arbitration award.

See NYCBA

Amicus Br. at 1, 9 ("An award is like a court judgment and, once
made, has its own legal significance even though it arose out of
an agreement.

[T]he proper instructions to the district

court would be to proceed directly to an analysis of whether the
award may be enforced against appellees on an alter ego theory
of liability, without directing the court to consider the scope
of the arbitration agreement under a First Options analysis.").

On March 2, 2017, the Second Circuit issued its
revised decision (the "Revised Decision"), in which it wrote
that it had vacated its earlier ruling "and simultaneously
issu[ed] this amended decision to correct our instructions to
the district court with regards to the applicable law for an
enforcement action at Section I.e., infra." See CBF Industria de

Gusa v. AMCI Holdings, Inc.,

850 F.3d 58

(2d Cir. 2017).

Section I.e. of the Revised Decision, titled "Applicable Law for
an Enforcement Action," consists of a re-write of the Vacated
Decision's analysis, eliminating any reference to First Options
or the requirements thereunder. See id. The Second Circuit held,
as relevant here, that:
On remand, therefore, we instruct the district court
to evaluate appellants' Enforcement Action,
particularly appellants' effort to reach appellees as
13

alter-egos of SBT, under the standards set out in the
New York Convention, Chapter 2 of the FAA, and
applicable law in the Southern District of New York.

Thus, the question of whether a third party not named
in an arbitral award may have that award enforced
against it under a theory of alter-ego liability, or
any other legal principle concerning the enforcement
of awards or judgments, is one left to the law of
enforcing jurisdiction, here the Southern District of
New York, under the terms of Article III of the New
York Convention.
The New York Convention additionally provides that
"[r]ecognition and enforcement of [a foreign arbitral]
award may be refused.
. only if [the requesting]
party furnishes to the competent authority where the
recognition and enforcement is sought, proof that" one
of five enumerated conditions has been meet. N.Y.
Convention, art. V(l). Here, the "competent authority"
is the federal district court to which the awardcreditor has applied for enforcement. See 9 U.S.C. §
203.
Thus, it appears that the sole issue at present for
the district court to consider on remand pertains to
the liability of appellees for satisfaction of
appellants' foreign arbitral award as alter-egos of
the award-debtor under the applicable law in the
Southern District of New York. We leave further legal
and factual development of this issue, and any other
barriers to enforcement that appellees may argue on
remand, to the district court.
Revised Decision at 43-46.

Further, the Revised Decision also

restored the Fraud Claims:
Given appellants' assertions of fraud on the part of
appellees, assertions we must accept as true at the
motion to dismiss stage .
. we find the district
court's application of the equitable doctrine of issue
preclusion was inappropriate. On remand, appellants
should be allowed to conduct discovery with respect to
the fraud claims.

14

Id. at 51.

On September 28, 2017, Defendants filed a
Petition for Certiorari with the United States Supreme
Court, which was denied on December 11, 2017.

Defendants' filed the instant motion to dismiss
on January 4, 2018, and the motion was heard and marked
fully submitted on February 21, 2018.

II.

The Applicable Standard

On a Rule 12(b) (6) motion to dismiss, all factual
allegations in the complaint are accepted as true and all
inferences are drawn in favor of the pleader. Mills v. Polar
Molecular Corp., 12 F.3d 1170, 1174

(2d Cir. 1993). A complaint

must contain "sufficient factual matter, accepted as true, to
'state a claim to relief that is plausible on its face.'"
Ashcroft v.

Iqbal,

Corp. v. Twombly,

556 U.S. 662,

663

550 U.S. 544, 555

(2009)
(2007))

(quoting Bell Atl.
A

claim is facially

plausible when "the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged." Iqbal,
(quoting Twombly,

550 U.S. at 556)
15

556 U.S. at 663

In other words, the factual

allegations must "possess enough heft to show that the pleader
is entitled to relief." Twombly,

550 U.S. at 557

(internal

quotation marks omitted).

While "a plaintiff may plead facts alleged upon
information and belief 'where the belief is based on factual
information that makes the inference of culpability plausible,'
such allegations must be 'accompanied by a statement of the
facts upon which the belief is founded.'" Munoz-Nagel v. Guess,
Inc.,

No. 12 Civ. 1312 (ER), 2013 WL 1809772, at *3

Apr. 30, 2013)

(S.D.N.Y.

(quoting Arista Records, LLC v. Doe 3,

604 F.3d

110, 120 (2d Cir. 2010)); Prince v. Madison Square Garden,
F. Supp. 2d 372, 384

427

(S.D.N.Y. 2006); Williams v. Calderoni, 11

Civ. 3020 (CM), 2012 WL 691832, at *7

(S.D.N.Y. Mar. 1, 2012))

The pleadings, however, "must contain something more than
a statement of facts that merely creates a suspicion [of] a
legally cognizable right of action." Twombly,

550 U.S. at 555

(citation and internal quotation omitted).

In considering a motion to dismiss, "a district court
may consider the facts alleged in the complaint, documents
attached to the complaint as exhibits, and documents
incorporated by reference in the complaint." DiFolco v. MSNBC
Cable L.L.C.,

622 F.3d 104, 111 (2d Cir. 2010).
16

III. Defendants' Motion to Dismiss Plaintiffs' Amended Complaint
is Denied

In its Revised Decision, the Second Circuit instructed
this Court, on remand, "to evaluate [Plaintiffs'] Enforcement
Action, particularly [Plaintiffs'] effort to reach [Defendants]
as alter-egos of SBT, under the standards set out in the New
York Convention, Chapter 2 of the FAA, and applicable law in the
Southern District of New York." Revised Decision at 43. As such,
it is appropriate to consider first the threshold question of
whether Plaintiffs may pierce the corporate veil of SBT to reach
Defendants as alter egos. Next, the Court must consider whether
any of the conditions set out in the New York Convention, under
which a district court may refuse enforcement of a foreign
arbitral award, have been sufficiently invoked as to warrant
dismissal.

1. Plaintiffs May Pierce the Corporate Veil to Hold Defendants
Liable as Alter Egos of SBT

As a general rule, "courts are reluctant to disregard
the corporate entity in large part because there is a
presumption of separateness between a corporation and its
owners, which is entitled to substantial weight." Abu-Nassar v.
17

Elders Futures, Inc., No. 88 Civ. 7906 (PKL), 1991 WL 45062, at
*10

(S.D.N.Y. March 28, 1991)

Volvo,

844 F.2d 56,

(1988))

60

(citing Am. Protein Corp. v. AB

(2d Cir.),

cert. denied,

488 U.S. 852

(internal quotation marks and citations omitted).

Nevertheless, the corporate form may be pierced where "(l)

the

owner has exercised such control that the corporation has become
a mere instrumentality of the owner, which is the real actor;
(2)

such control has been used to commit a fraud or other wrong;

and (3) the fraud or wrong results in an unjust loss or injury
to plaintiff." Atateks Foreign Trade, Ltd. v.

Sourcing, LLC,

402 Fed. App'x 623,

625

Private Label

(2d Cir. 2010)

(citing

Freeman v. Complex Computing Co., 119 F.3d 1044, 1052 (2d Cir.
1997)

("While complete domination of the corporation is the key

to piercing the corporate veil,
alone,

such domination,

standing

is not enough; some showing of a wrongful or unjust act

toward plaintiff is required."); see also Oriental Commercial &

Shipping Co., Ltd., 702 F. Supp. at 1018
Corp.,

844 F.2d at 60)

("The parent .

(citing Am. Protein

(internal quotation and citation omitted)

exercise[d] complete domination in respect to

the transaction attacked so that the subsidiary had at the time
no separate will of its own, and such domination [was]
used to commit fraud or wrong against plaintiff, which
proximately caused plaintiff's injury." Oriental Commercial

Shipping Co., Ltd., 702 F. Supp. at 1018
18

(citing Am. Protein

&

Corp.,

844 F.2d at 60)

(internal quotation and citation

omitted)).

Courts consider a variety of factors in assessing the
control element, including "(1)

intermingling of personal and

corporate funds and siphoning of corporate funds by a principal;
(2)

failure to observe corporate formalities and keep proper

books and records;
capitalization;

(5)

( 3) failure to pay dividends;

( 4)

inadequate

insolvency; and (6) perpetuation of fraud by

shareholders in maintaining the corporate form." Abu-Nassar,
1991 WL 45062, at *11 (citations omitted). Other factors
considered include (7) "overlap in ownership, officers,
directors, and personnel," (8)

"common office space, address,

and telephone numbers of corporate entities,"

(9)

"the degree of

discretion shown by the allegedly dominated corporation,"

(10)

"whether the dealings between the entities are at arms length,"
(11)

"whether the corporations are treated as independent profit

centers," and (12) "payment or guarantee of the corporation's
debts by the dominating entity." Freeman, 119 F.3d at 1053.

There is no set rule regarding how many factors must
weigh in favor of piercing the corporate veil for control to be
found.

William Wrigley, Jr. Co., 890 F.2d at 600-01

Brunswick Corp. v. Waxman,

599 F.2d 34, 35
19

(citing

(2d Cir. 1979)); see

Thomson-CSF, S.A. v. Am. Arbitration Ass'n, 64 F.3d 773, 777

Cir. 1995)

(2d

("Veil piercing determinations are fact specific and

differ with the circumstances of each case.")

(internal

quotation and alteration omitted). Instead, "the general
principle followed by the courts has been that liability is
imposed when doing so would achieve an equitable result." Id. at
601 (noting that when fraud sufficient to pierce the corporate
veil has been found in this Circuit, "the evidence demonstrated
an abuse of that form either through on-going fraudulent
activities of a principal, or a pronounced and intimate
commingling of identities of the corporation and its principal
or principals, which prompted the reviewing courts, driven by
equity, to disregard the corporate form.").

Further, at this stage of the proceedings, Plaintiffs
need only detail the factual allegations to the degree required
by Federal Rule of Civil Procedure 8(a)'s liberal pleading
standard to show the domination or control necessary to pierce
the corporate veil. See Network Enter., Inc. v. APBA Offsore
Prods., Inc., No. 01 Civ. 11765 (CSH), 2002 WL 31050846, at *4

(S.D.N.Y. Sept. 12, 2002); Fed. R. Civ. P. 8(a)
relief "shall contain .

(a claim for

. a short and plain statement of the

claim showing that the pleader is entitled to relief.").

20

The record is replete with examples of SBT's control
over Prime Carbon. First, Plaintiffs have alleged facts
supporting the notion that the dealings between the entities
were closer than arms length. On December 27, 2009, after SBT
entered into the Contracts wherein SBT agreed to buy over
100,000 tons of pig iron worth over $476 million, SBT signed the
Transfer Agreement, transferring all of its business to Prime
Carbon and claiming SBT's insolvency. Am. Compl. 11 34, 41, 52.
Specifically, SBT transferred $126 million in assets to Prime
Carbon and $130 million in liabilities, in exchange for $1,
evidencing no consideration involved in the transfer. See id. 1
59; MAG Portfolio Consultant, GMBH v. Merlin Biomed Grp LLC, 268
F.3d 58,

64

(2d Cir. 2001)

(finding the factor regarding

"whether the dealings between the entities are at arms length"
weighed in favor of finding fraud where there was no
consideration involved in new companies succeeding to manage old
companies).

Second, an overlap in ownership and control weigh in
favor of finding control. Plaintiffs allege that Individual
Defendants Mende and Kundrun ultimately owned and controlled
SBT, Prime Carbon, and AMCI Holdings. Am. Compl. 1 4. On January
18, 2010, SBT sent letters to its pig iron suppliers putting
them on notice of the change in ownership from SBT to Prime
21

Carbon.

Id.

~

53. The letters provided that, as of November 30,

2009, SBT had transferred "all Goods and the respective title of
the Goods" to Prime Carbon; that Prime Carbon was "the new and
sole owner of the Goods"; that Prime Carbon "assumes all rights
with respect to the transferred Goods"; and that Prime Carbon
"is willing to enter in all contracts between [its pig iron
suppliers and SBT] and to perform under the same conditions."
Id. The letters advised the suppliers "to act from the time

being only on instruction of Prime Carbon." Id.

~

54. These

letters were signed by Stephan Herzig ("Herzig"), a director of
SBT who later became a director of Prime Carbon, id.

~~

36, 55,

and Thomas Buerger ("Buerger"), a director of Prime Carbon and
Chief Financial Officer of AMCI Capital at the time, and a
former director of SBT, who signed on behalf of Prime Carbon.
Id.

~~

58.

Moreover, following the Transfer Agreement, Prime
Carbon employed at least five of SBT's former directors and took
over 10 of SBT's employment contracts.

Id.

~~

66-68. Mende, whom

Plaintiffs allege was "one of the ultimate owners of SBT,"
became the President of the Board of Directors of Prime Carbon.
Id.

~

50. Moreover, other former directors of SBT became

directors of Prime Carbon. Id. See Balmer v. 1716 Realty, LLC,
No. 05 Civ. 839 (NG)

(MDG), 2008 WL 2047888, at *5
22

(E.D.N.Y. May

9, 2008)

( finding that 'overlap in ownership' factor supported

finding control and domination where five of six persons shared
an ownership interest in both entities).

Third, Plaintiffs have pleaded facts supporting the
reasonable inference that SBT was inadequately capitalized at
the time of the transaction. "Evidence of substantial
undercapitalization .

. is significant because it can be

evidence of a company's lack of independent substance." Cardell
Fin. Corp. v. Suchodolski Assocs., Inc., No. 09 Civ. 6148

(MHD), 2012 WL 12932049, at *22

(VM)

(S.D.N.Y. July 17, 2012). While

undercapitalization is just "an additional factor to be weighed
in the balance," see Abu-Nassar, 1991 WL 45062, at *13, "it
weighs heavily in favor of a finding that the corporate form of
an entity should be disregarded." Eagle Transp. Ltd., Inc. v.
O'Connor,

470 F. Supp. 731, 733 (S.D.N.Y. 1979). A corporation

will be found undercapitalized "when its liabilities exceed its
assets." Cardell Fin. Corp., 2012 WL 12932049, at *22; see also
Abu-Nassar, 1991 WL 45062, at *13

(finding corporation

"currently undercapitalized and essentially insolvent, in that
its liabilities exceed its assets, it is no longer in business
and it can no longer meet its obligations without financial
assistance from [the shareholders-principals]"). As to the
timing of insolvency, the relevant inquiry for liability
23

purposes is that of the transaction at issue. Cardell Fin.
Corp.,

2012 WL 12932049, at *22.

The Contracts were entered into between January 1,
2008 and September 17, 2008. Am. Compl.
that SBT's annual audit reports,

~

34. Plaintiffs assert

issued on December 31, 2007,

and December 31, 2008, indicate that SBT was undercapitalized,
such that its equities were outweighed by its assets. Am. Compl.
~

111. Further,

Plaintiffs assert that SBT's General Assembly

did not convene within six months after conclusion of either of
those business years to verify the audit reports,
of Swiss corporate law.

in violation

Id.

Fourth, Prime Carbon initially had the same address as
SBT, before changing its address to be the same as SBT's parent.
On January 10, 2010, SBT transferred its lease contract
concerning its commercial, storage, and parking spaces to Prime
Carbon.

Id.

~

68.

Finally, as to maintaining corporate formalities,
courts have held that "when determining whether a foreign
corporation has observed the proper corporate formalities,
courts apply the law of the country of incorporation," which
here is Switzerland. See Abu-Nassar, 1991 WL 45062, at *12 n.17
24

(citing Oriental Commercial & Shipping Co., 702 F. Supp. at
1019-20); Am. Compl. 1 26. The parties have not provided the
Court with any authority on Swiss corporate law, but Plaintiffs
have submitted two allegations supporting that SBT failed to
adhere to corporate formalities.

Plaintiffs allege that "SBT's

annual audit reports, issued on December 31, 2007, and December
31, 2008,

indicated that SBT was undercapitalized," and that

"SBT's General Assembly did not convene within six months after
conclusion of either of those business years to verify the audit
reports, in violation of Swiss corporate law." Am. Compl. 1 111.
Further, Plaintiffs assert that "SBT did not have regular,
required meetings under Swiss law and did not observe corporate
formalities." Id. 1 135. These two assertions, without more,
provide some support for the assertion that Defendants and SBT
disregarded corporate formalities.

Taken together, the above allegations sufficiently
allege that Defendants dominated and controlled SBT to satisfy
the first element of a veil-piercing claim at the motion to
dismiss stage.

See Accordia Northeast, Inc. v.

Thesseus Intern.

Asset Fund, N.V., 205 F. Supp. 2d 176, 182 (S.D.N.Y. 2002)
(holding, on a motion to dismiss, that allegations of sharing an
office address, gross undercapitalization, and shared directors,
management, and employees, "if proven, could well justify
25

piercing the veil, making dismissal inappropriate."); EED
Holdings v. Palmer Johnson Acquisition Corp.,
265, 274

(S.D.N.Y. 2004)

387 F. Supp. 2d

(finding control sufficiently alleged

at motion to dismiss stage where complaint contained statements
concerning domination by owner of parent company, how subsidiary
was used to further individual defendant's own interest, and how
subsidiary was directed to conceal information about its
operating difficulties and delays); Campo v. 1 st Nationwide Bank,
857 F. Supp. 264

(E.D.N.Y. 1994)

(finding control and domination

on a motion to dismiss where plaintiff alleged by more than
conclusory statements that corporation was in common ownership
with and shared same management as other defendants, created
subsidiaries to escape federal regulation, held itself to be
only viable corporate entity in dealing with plaintiff, and
commingled funds with other defendants).

Next, Plaintiffs must have sufficiently alleged
Defendants used SBT "to commit a fraud or wrong that caused
[Plaintiffs] unjustly to suffer a loss." Oriental Commercial

&

Shipping Co., Ltd., 702 F. Supp. at 1022. This second prong "can
be satisfied either by showing outright fraud,
of 'wrong,' such as a

or another type

'breach of a legal duty, or a dishonest

and unjust act in contravention of plaintiff's legal rights.'"
Telenor Mobile Commc'n A.S. v. Storm LLC, 587 F. Supp. 2d 594,
26

620

(S.D.N.Y. 2008)

(citing Elec. Switching Indus., Inc. v.

Faradyne Elec. Corp.,

833 F.2d 418, 424

(2d Cir. 1987)). Fraud

is "a representation of fact, which is either untrue and known
to be untrue or recklessly made, and which is offered to deceive
the other party and induces them to act upon it, causing
injury." Oriental Commercial & Shipping Co., Ltd., 702 F. Supp.
(citing Jo Ann Homes at Bellmore, Inc. v. Dworetz, 25

at 1022

N.Y.2d 112, 119, 302 N.Y.S.2d 799, 803, 250 N.E.2d 214,

216

( 1969)) .

Treating the Amended Complaint as true,

SBTs'

activities as alleged by Plaintiffs are sufficient to constitute
a fraud or wrong for purposes of piercing the corporate veil.
The facts, as alleged by Plaintiffs, demonstrate that a jury
could find that Defendants, acting on behalf of SBT, sought to
make SBT judgment proof as a means of evading its obligations
under the Contracts. Defendants entered into the Transfer
Agreement on December 27, 2009, after Plaintiffs filed the
request for arbitration with the ICC on November 16, 2009. Am.
Compl.

~~

47,

52. Plaintiffs allege that SBT misrepresented that

it intended to honor the Contracts, and misrepresented to the
arbitration panel that it needed to evaluate its position while
it was in the process of rendering SBT insolvent.

Id.

~

3.

Plaintiffs further allege that SBT then fraudulently transferred
27

SBT's business to Prime Carbon by way of the Transfer Agreement
without informing Plaintiffs or the arbitration panel of this
action.

Id.

~~

3, 53-57. In light of these allegations, and in

conjunction with those mentioned above,

Plaintiffs have

adequately alleged that Defendants acted to commit a wrong or
fraud by attempting to make SBT judgment proof to evade SBT's
obligations under the Contracts. See Carte Blanche (Singapore)
PTE., Ltd. v. Diners Club Intern., Inc.,
( S. D. N. Y. 1991)

758 F. Supp. 908,

917

( stripping the assets of the subsidiary by the

parent to render it "judgment proof" constitutes "fraud or
wrong") ; Freeman v. Complex Computing Co., Inc.,
257, 260

(S.D.N.Y. 1997)

97 9 F. Supp.

(shifting of assets by equitable owner

of corporation to make corporation judgment proof constitutes
fraud or wrong justifying veil-piercing); Smoothline Ltd. v.
North Am. Foreign Trading Corp., No. 2002 WL 31885795, at *11
(S.D.N.Y. Dec. 27, 2002)

(intercompany transfers designed to

drain money sufficient to constitute fraud or wrong for purposes
of piercing the corporate veil).

Accordingly, the AC sufficiently has alleged the
piercing of SBT's corporate veil to reach Defendants as alter
egos of SBT.

28

2. Defendants Have Failed to Provide Grounds on Which
Recognition and Enforcement of the ICC Award May be Denied

The New York Convention provides that "[r]ecognition
and enforcement of [a foreign arbitral award] may be refused
. only if [the requesting party]

furnishes to the competent

authority where the recognition and enforcement is sought, proof
that" one of the enumerated conditions has been met in Article
V(l) or (2). N.Y. Convention, art. V(l),(2). "The party opposing
enforcement of an arbitral award has the burden to prove that
one of the seven defenses under the New York Convention
applies." Telenor Mobile Commc 'ns AS v. Storm LLC,
405

58 4 F. 3d 3 9 6,

(2d Cir. 2009); see also Duferco Intern Steel Trading v.

Klaveness Shipping A/S,

333 F.3d 383, 388

(2d Cir. 2003)

T.

("A

party petitioning a federal court to vacate an arbitral award
bears the heavy burden of showing that the award falls within a
very narrow set of circumstances delineated by statute and case
law.")

For purposes of this litigation, this Court is the

"competent authority" as it is the federal district court to
which the award-creditor has applied for enforcement. See
Revised Decision at 45.

Defendants have moved to dismiss Plaintiffs' Amended
Complaint on three grounds. First, on the basis that Article V
29

of the New York Convention prevents enforcement of an award
against a party that was deprived of a full and fair opportunity
to be heard at the time of the underlying arbitration. Defs.'
Br. 21. Second, Defendants assert that Plaintiffs cannot avoid
their contractual agreement to arbitrate veil-piercing issues by
arguing that Defendants are not SBT for purposes of seeking an
independent judicial veil-piercing determination, while
simultaneously alleging that Defendants are SBT for purposes of
enforcing the Award against them.

Id. 29-32. Third,

Defendants

allege that Plaintiffs lack standing to state a veil-piercing
claim to the extent that such a claim is derivative of an injury
to SBT under Swiss law, which provides that creditors without an
assignment in the bankruptcy lack standing to pursue claims for
indirect damages flowing from damage to a bankrupt debtor.

Id.

35.

Defendants' second and third arguments fail as they do
not speak to any of the enumerated Article V conditions that
must be present for recognition and enforcement of the Award to
be refused.

See N.Y. Convention, art. V(l)

("[r]ecognition and

enforcement of [a foreign arbitral award] may be refused .
only if [the requesting party]
authority .

furnishes to the competent

. proof" of one of the Article V enumerated

30

conditions). Specifically, the five enumerated conditions laid
out under the New York Convention are as follows:
(a)

The parties to the [arbitration] agreement
referred to in article II [of the New York
Convention] were, under the law applicable to
them, under some incapacity, or the said
agreement is not valid under the law to which
parties have subjected it or, failing any
indication thereon, under the law of the country
where the award was made; or

(b)

The party against whom the award is invoked was
not given proper notice of the appointment of the
arbitration or of the arbitration proceedings or
was otherwise unable to present his case; or

(c)

The award deals with a difference not
contemplated by or not falling within the terms
of the submission to arbitration, or it contains
decisions on matters beyond the scope of the
submission to arbitration, provided that, if the
decisions on matters submitted to arbitration can
be separated from those not so submitted, that
part of the award which contains decisions on
matters submitted to arbitration may be
recognized and enforced; or

(d)

The composition of the arbitral authority or the
arbitral procedure was not in accordance with the
agreement of the parties, or, failing such
agreement, was not in accordance with the law of
the country where the arbitration took place; or

(e)

The award has not yet become binding on the
parties, or has been set aside or suspended by a
competent authority of the country in which, or
under the law of which, that award was made.

N.Y. Convention, art. V(l)

(italics in original). Moreover,

dismissal is further permitted if the Court determines that "(a)
[t]he subject matter of the difference is not capable of

31

settlement by arbitration under the law of [the United States];
or (b)

[t]he recognition or enforcement of the award would be

contrary to the public policy of [the United States]." Id. art.
V(2).

None of the above enumerated conditions apply to the
Defendants'

second and third argued grounds for dismissal. The

Second Circuit held that Plaintiffs can in fact seek to hold
Defendants liable on an alter ego theory, thereby defeating
Defendants' second argument. Revised Decision at 43

("On remand,

therefore, we instruct the district court to evaluate
appellants' Enforcement Action, particularly appellants' effort
to reach appellees as alter-egos of SBT, under the standards set
out in the New York Convention, Chapter 2 of the FAA, and
applicable law in the Southern District of New York."). The
standing argument must similarly be denied as it is not a ground
mentioned in the Convention.

As to Defendants' remaining argument, they contend
that the forum's standards of due process have not been met.
Defendants claim a foreign arbitration award is not enforceable
where the arbitration tribunal denied one party the opportunity
to "be heard at a meaningful time and in a meaningful manner."
Defs.' Br. 21

(citing Iran Aircraft Indus. v. Avco Corp.,
32

980

F.2d 141, 145-46 (2d Cir. 1992). Defendants claim that, as a
result of the SBT Bankruptcy, they were incapacitated to defend
and were unable to present SBT's case within the meaning of the
New York Convention. Id. at 23. Further, Defendants argue that
Plaintiffs deliberately did not seek to name alleged successors,
alter egos, transferees, Defendants or other allegedly liable
third parties as respondents or in connection with the ICC
Arbitration, nor in a subsequent proceeding in France seeking to
modify or vacate the ICC Award, so as to ensure that no defense
on the merits could be mounted.

Id.

Plaintiffs argue that Defendants may not evade
liability on the basis of its incapacity to participate in SBT's
bankruptcy pursuant to Swiss law because Defendants fabricated
the situation that led to such alleged incapacity. Pls.' Br. 19.
Moreover, Plaintiffs assert that their allegations must be taken
as true, and as such, Defendants as SBT's alter egos not only
had the opportunity to defend themselves in the Arbitration, but
voluntarily abandoned that opportunity, choosing instead to
steal SBT's assets in order to force SBT into bankruptcy as way
of avoiding liability for SBT's breach of the Contracts.

Id. at

19-20. Plaintiffs further argue that the only reasons Defendants
were not involved in the Arbitration was because they chose not
to be.

Id. at 20. Had Defendants desired for SBT to have a

33

viable defense in the Arbitration, they could have:
stolen all its assets or (ii)

(i) not

infused sufficient assets back

into SBT to allow it to contest the Arbitration.

Id.

Here, Defendants assert Articles V ( 1) (a) ,

(b) , and

V(2) (b) as grounds for dismissal. Under Article V(l) (a),
Defendants must demonstrate that they were under some incapacity
"at the time of the agreement rather than at the time of the
arbitration." In the Matter of the Arbitration Between UNITED

MEDIA HOLDINGS, NV, et al, Petitioner, v. FORBES MEDIA, LLC,
Respondent. Additional Party Names: TriLado Enterprises, Inc.,
No. 16 CIV. 5926 (PKC), 2017 WL 9473164, at *10
9, 2017)

(S.D.N.Y. Aug.

(internal citation omitted); see also China Nat. Bldg.

Material Inv. Co. v. BNK Int'l LLC, No. A-09-CA-488-SS, 2009 WL
4703578, at *5-6 (W.D. Tex. Dec. 4, 2009)

(noting that Article

V ( 1) (a) as whole appears to refer to the validity of the
underlying arbitration agreement, and that "the incapacity
defense requires the challenging party to prove it was under an
incapacity at the time the agreement was entered into, not at
the time of the arbitration proceeding."). Because Defendants
have offered no evidence that they suffered from any incapacity
at the time the Contracts were signed, this claim fails.

34

Under Article V(l) (b), "enforcement of a foreign
arbitral award may be denied if the defendant can prove that he
. or was otherwise unable to

was not given proper notice

present his case." Parson & Whittemore Overseas Co., Inc.
Societe Generale De L'Industrie Du Papier (RAKTA),
975

v.

508 F.2d 969,

(2d Cir. 1974). As the Second Circuit has provided, this

provision "essentially sanctions the application of the forum
state's standards of due process." ESH Hausgerate GmbH v. Kamhi,
291 F. Supp. 3d 437, 441

(S.D.N.Y. 2018)

Ltd. v. Wistron Corp., No. 15 Civ. 2340
at *5 (S.D.N.Y. Mar. 4, 2013)

(citing Mondis Tech.
(RA), 2016 WL 6534255,

(internal citation and quotation

marks omitted). In this Circuit, "[t]he fundamental requirement
of due process is the opportunity to be heard 'at a meaningful
time and in a meaningful manner.'" Iran Aircraft Indus. v. Avco
Corp.,

980 F.2d 141, 146 (2d Cir. 1992)

Eldridge,

424 U.S. 319, 333 (1976))

(citing Mathews v.

(internal citation omitted)

The inquiry is "limited to determining whether the procedure
used was fundamentally, unfair," Abu Dhabi Inv. Auth v.
Citigroup, Inc., No. 12 Civ. 283
(S.D.N.Y. Mar. 4, 2013)
Inc.,

120 F.3d 16, 20

(GBD), 2013 WL 789642, at *7

(citing Tempo Shain Corp. v. Bertek,

(2d Cir. 1997)), aff'd, 557 Fed. Appx.

66

(2d Cir. 2014), and ensuring that there was "the opportunity to
be heard 'at a meaningful time and in a meaningful manner.'"
Iran Aircraft Indus.,

980 F.2d at 145 (internal citation
35

•
•

omitted). Under these standards, a party is entitled only to
"'notice reasonably calculated, under all the circumstances, to
apprise interested parties of the pendency of the action and
afford them an opportunity to present their objections.'" Yukos
Capital S.A.R.L. v. Samaraneftegaz,

Cir. 2014)

592 Fed. Appx. 8, 11 (2d

(quoting Mullane v. Cent. Hanover Bank

339 U.S. 306, 314

(1950))

&

Trust Co.,

(internal citation omitted).

As the alter ego analysis above demonstrates,
Plaintiffs in their Amended Complaint sufficiently alleged
Defendants' control over SBT, such that if SBT is found to have
received proper notice and an opportunity to be heard,
Defendants by implication may be found to have as well.
According to Plaintiffs' allegations, SBT received notice
regarding the Arbitration proceedings before the ICC,
Compl.

~~

see Am.

47-48. That SBT requested an extension of time to

answer the Request for Arbitration, id., and responded to
Plaintiffs' letter to the ICC Paris, id. at~ 51, evidence that
SBT was provided proper notice of the Arbitration.

Plaintiffs have also sufficiently alleged that SBT
could have proceeded to defend itself in the Arbitration had its
creditors found it a worthwhile endeavor. Id. at~ 84-85.
However, because, Plaintiffs allege, SBT transferred all its
36

•
assets and liability to Defendants, no assets existed to
distribute to creditors, and therefore SBT's creditors had no
incentive to pursue the defense.

Id. at~ 85. Treating the

Amended Complaint as true, and limiting this analysis to the
facts stated in the Amended Complaint, Defendants have failed to
meet their "heavy burden" of demonstrating that their due
process was violated. See Hayden v. Cnty. of Nassau,
42, 54

(2d Cir. 1999)

(citation omitted)

180 F.3d

(when deciding a Rule

12(b) (6) motion to dismiss, "a district court must limit itself
to the facts stated in the complaint, documents attached to the
complaint as exhibits and documents incorporated by reference in
the complaint.") . Accordingly, Defendants' Article V ( 1) (b)
argument fails.

"Article V (2) (b) allows a court to refuse enforcement
of an arbitration award where enforcement would violate the
forum state's public policy." Yukos Capital S.A.R.L.,

592 Fed.

Appx. at 11 (citing Telenor Mobile Commc'ns AS, 584 F.3d at
405). This forum has "tightly restricted the public policy
exception, emphasizing that the exception applies only where
enforcement of the arbitration award, as opposed to enforcement
of the underlying contract, would violate public policy." Id.
(citing Saint Mary Home, Inc. v. Serv. Employees Int'l Union,
Dist. 1199, 116 F.3d 41, 46

(2d Cir. 1997)); see also Telenor
37

.,

Mobile Commc'ns AS,

584 F.3d at 411

("Article V(2) (b) must be

'construed very narrowly' to encompass only those circumstances
'where enforcement would violate our most basic notions of
morality and justice.'")

( internal citation omitted) .

Here, Defendants do not state with specificity why
enforcement of the ICC Award would violate public policy
pursuant to Article V(2) (b). See Defs.' Br. at 28

(".

. it

would also be 'contrary to the public policy of [the United
States .

.]'"). Absent more, it is concluded that enforcing

the award as against Defendants would not be contrary to public
policy.

IV.

Conclusion

For the foregoing reasons, the Defendants' motion to
dismiss is denied.

It is so ordered.

New York, NY
June/0018

ROBERT W. SWEET
U.S.D.J.
38