Centauro Liquid Opportunities Master Fund, L.P. v. Bazzoni, et al.

Filing 314

ORDER: For the foregoing reasons, and those set forth in the Court's September 18, 2019, opinion, the Court lacks personal jurisdiction over Elemento and Bazzoni and all claims against those Defendants are dismissed. This case will proceed solely against CTEL in respect of the remaining Second and Third causes of action. This case remains referred to Magistrate Judge Netburn for general pre-trial management. The parties are directed to meet with Judge Netburn for settlement purposes and to discuss any outstanding pretrial matters. The final pretrial conference in this case is adjourned to October 1, 2021, at 2:00 p.m. The parties shall consult and make submissions in advance of the conference as provided in docket entry number 46. ( Final Pretrial Conference set for 10/1/2021 at 02:00 PM before Judge Laura Taylor Swain.) (Signed by Judge Laura Taylor Swain on 7/26/2021) (ate)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------x
CENTAURO LIQUID OPPORTUNITIES
MASTER FUND, L.P.,
Plaintiff,
-v-

No. 15 CV 9003-LTS-SN

ALESSANDRO BAZZONI, CINQUE
TERRE FINANCIAL GROUP, LTD., CT
ENERGIA LTD., CT ENERGIA HOLDING,
LTD., CT ENERGY HOLDING SRL, and
CTVEN INVESTMENTS SRL,
Defendants.
-------------------------------------------------------x
MEMORANDUM ORDER
Plaintiff Centauro Liquid Opportunities Master Fund, L.P. (“Plaintiff” or
“Centauro”) brings this action for fraud and breach of contract against Defendants Cinque Terre
Financial Group Ltd. (“CTFG”), 1 CT Energia Ltd. (“CTEL”), CT Energia Ltd. d/b/a Elemento
Ltd. (“Elemento”), and Alessandro Bazzoni (“Bazzoni”). Plaintiff’s claims arise, in part, from
CTFG and CTEL’s default on a promissory note that Bazzoni signed on behalf of CTFG and
CTEL on May 21, 2015, in favor of Centauro (the “Note”). (See docket entry nos. 219, 234 Ex.
31 at 1.) The Court has subject matter jurisdiction of this action pursuant to 28 U.S.C. § 1332.

1

This action is stayed as against CTFG by an order of the United States
Bankruptcy Court for the Southern District of New York pending resolution of a
petition for recognition of a foreign liquidation proceeding under Chapter 15 of
the United States Bankruptcy Code, and nothing in this Memorandum Order
constitutes an adjudication of CTFG’s rights or defenses.

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The Note included a provision by which CTEL consented to resolution in New York of any
disputes arising thereunder,
By Memorandum Opinion and Order dated September 18, 2019, the Court, inter
alia, dismissed Centauro’s claims against Bazzoni and Elemento (collectively, the “Defendants”)
for lack of personal jurisdiction (docket entry no. 272, the “September Order”). 2 In light of the
determination as to lack of personal jurisdiction, the Court denied the defendants’ motions for
summary judgment to the extent that they sought dismissal of Centauro’s alter ego and other
claims against Bazzoni and Elemento on the merits. The Court held that Plaintiff’s alter ego
claims against Bazzoni and Elemento could not be sustained under the law of the British Virgin
Islands (the jurisdiction in which CTEL was incorporated, which applies English law), and gave
leave to Centauro to make a written proffer, consistent with the Federal Rule of Civil Procedure
12(b)(2) standard, demonstrating a legal and factual basis for the exercise of personal jurisdiction
over Bazzoni and/or Elemento on a veil piercing theory under Maltese law, Elemento having
been created under the laws of Malta. Centauro’s subsequently proffered bases for personal
jurisdiction over Elemento and Bazzoni (see docket entry no. 287, the “Proffer”) are the subject
of this Memorandum Order. The Court has considered carefully the parties’ submissions filed in
connection with the Proffer and, for the following reasons, the Court finds no basis for the
exercise of personal jurisdiction over Elemento and Bazzoni.

2

The September Order also granted Centauro’s motion for summary judgment as
against CTEL with respect to Centauro’s First Cause of Action and denied it in all
other respects; it denied CTEL’s motion for summary judgment to the extent it
sought dismissal of Centauro’s breach of contract claims against CTEL for lack of
consideration, and to the extent it sought dismissal of Centauro’s Third Cause of
Action for fraudulent inducement.

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DISCUSSION
The Court assumes the parties’ familiarity with the facts of this case, which are
laid out in detail in the September Order.
Personal Jurisdiction under Maltese Law Over Elemento and Bazzoni
The Court’s decision in the September Order to allow Centauro an opportunity to
proffer a basis upon which the Court may exercise personal jurisdiction over the Defendants
Bazzoni and Elemento under Maltese law was prompted by the Defendants’ prior efforts to
disclaim liability under Maltese law for lack of personal jurisdiction (see docket entry no. 60),
and Plaintiff’s failure to meaningfully address jurisdictional issues under Maltese law
(presumably because the Court had previously held that CTEL’s corporate veil could be pierced,
and Bazzoni and Elemento reached, under English law). In its Amended Complaint, Plaintiff
alleges that CTFG and CTEL have consented to jurisdiction in the Southern District of New
York, and that Bazzoni and Elemento are subject to such jurisdiction as alter egos of CTEL. See
docket entry no. 129 at ¶¶ 5-6. Plaintiff has consistently relied solely on its assertion of alter ego
claims under English law as a basis for personal jurisdiction over Bazzoni and Elemento
throughout the course of this litigation.
In the September Order, the Court recognized that its prior decisions had been
erroneous to the extent those decisions concluded that Centauro had pled facts sufficient to
demonstrate under English law that CTEL’s corporate veil could be pierced on the theory
advanced by Centauro to reach Bazzoni in his individual capacity and reach the assets of
Elemento. See September Order at 17. Accordingly, the Court determined that it would give
Centauro an opportunity to seek to demonstrate the existence of a proper basis under Maltese law
for the exercise of personal jurisdiction over Bazzoni and Elemento. The Court has considered

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the parties’ supplemental submissions carefully, and concludes that Plaintiff has failed to meet its
burden of demonstrating a basis under Maltese law for the exercise of personal jurisdiction over
Bazzoni or Elemento in connection with its claims relating to CTEL’s liability under the Note.
CTEL, a British Virgin Islands corporation, is the entity that consented
contractually to this Court’s exercise of personal jurisdiction. None of Plaintiff’s arguments
regarding Malta’s allegedly more liberal standards for alter ego liability identifies a viable
principle that would support a determination that CTEL’s consent to jurisdiction can be enforced
in this Court against Bazzoni or Elemento. The arguable demonstration of a possibility that a
court applying Maltese law might find that Bazzoni misused Elemento to divert assets or
business opportunities from CTEL and thus find Elemento or Bazzoni liable to CTEL’s creditors
does not demonstrate that Maltese law provides a basis for subjecting Bazzoni or Elemento to
jurisdiction based on a provision of a contract signed by CTEL. For these reasons, the
September Order stands and Centauro’s alter ego claims against Bazzoni and Elemento remain
dismissed.
Long-Arm Jurisdiction Over Bazzoni
In the alternative, Centauro argues in its Proffer that the Court independently has
personal jurisdiction over Bazzoni under New York’s long-arm statute such that Centauro may
pursue its claim for fraudulent inducement against Bazzoni in his personal capacity. To
determine the existence of jurisdiction under New York’s long-arm statute, N.Y. CPLR §
302(a)(1), “a court must decide (1) whether the defendant ‘transacts any business’ in New York
and, if so, (2) whether this cause of action ‘aris[es] from’ such a business transaction.” Best Van
Lines, Inc. v. Walker, 490 F.3d 239, 246 (2d Cir. 2007). “[C]ontract negotiations occurring in
New York are sufficient to support jurisdiction when they either substantially advance or were

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essential to the formation of a contract or if they resulted in a more solid business relationship
between the parties.” SAS Grp., Inc. v. Worldwide Inventions, Inc., 245 F. Supp. 2d 543, 549
(S.D.N.Y. 2003) (citation and internal quotation marks omitted). Where a Plaintiff asserts a
fraud claim arising from a transaction, there must be “some ‘articulable nexus’ or ‘substantial
relationship’ between the transaction and the claim asserted.” Newmont Mining Corp. v.
AngloGold Ashanti Ltd., 344 F. Supp. 3d 724, 741 (S.D.N.Y. 2018).
Under Federal Rule of Civil Procedure 12(b)(2), the burden for establishing
personal jurisdiction “varies depending on the procedural posture of the litigation.” Ball v.
Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990). Where discovery has
been completed and no evidentiary hearing has been held, a plaintiff seeking to make a prima
facie showing of jurisdiction must proffer “facts that, if credited by the trier, would suffice to
establish jurisdiction.” De Lorenzo v. Ricketts & Assocs., Ltd., No. 15 Civ 2506 (VSB), 2017
WL 4277177, at *5 (S.D.N.Y. Sept. 25, 2017) (citation and internal quotation marks omitted).
“Furthermore, although pleadings and affidavits are construed in the light most favorable to the
plaintiff, conclusory non-fact-specific jurisdictional allegations or a legal conclusion couched as
a factual allegation will not establish a prima facie showing of jurisdiction.” Id. (internal
quotation marks omitted).
Here, Centauro argues that it is has proffered facts sufficient to prove that Bazzoni
had specific contacts with New York relating to the Note to support jurisdiction of its claims for
fraudulent inducement against Bazzoni in his personal capacity. Centauro submits that Bazzoni
took part in multiple in-person meetings at the New York law offices of Baker Mackenzie,
CTEL’s counsel, to negotiate the Note directly with Centauro’s representatives on behalf of
CTEL. See Proffer at 11. Centauro asserts that Bazzoni’s negotiations in New York

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substantially advanced the parties’ relationship and were essential to the formation of the Note
because the negotiations “were part of [the] parties’ coming to ground on the length of the
payback period” and involved discussions regarding servicing of the Note. Id. at 12. Centauro
also contends that the New York negotiations substantially relate to its fraud claim against
Bazzoni because these meetings involved discussions regarding essential aspects of the Note and
that Bazzoni did not correct misrepresentations that were made during the meetings. Id.
The evidence cited by Centauro in support of its claims regarding Bazzoni’s
participation in the New York meetings is, however, too vague to establish a basis for the
exercise of personal jurisdiction. For example, Centauro relies solely on the testimony of
Yvonne Morabito (“Morabito”), General Partner at Centauro, as the evidentiary basis for its
assertion that Bazzoni attended multiple “in person meetings in New York to negotiate the
Note.” Id. at 11. Centauro’s argument mischaracterizes Morabito’s testimony. Morabito did
testify during her deposition that negotiations surrounding the Note were extensive, but when she
was asked “[h]ow many in person meetings [in New York] were conducted?” she replied “[i]t’s
hard to say.” See docket entry no. 276-13 at 134:23-135:10. When Morabito was further
pressed on “approximately” how many in-person meetings there were, she replied “I don’t know.
I don’t know. There were numerous, but their offices were in Fort Lauderdale at the time so a lot
of things happened by phone as well.” Id. at 135:11-15. Indeed, Morabito never specifically
testified as to how many in person meetings actually took place in New York, much less as to
how many of these meetings, if any, Bazzoni attended. Furthermore, as Bazzoni points out,
“[Morabito] never testified [about] what Bazzoni said or did at these meetings, nor when they
occurred. . . Morabito also failed to testify about what was purportedly discussed or negotiated
by anyone (let alone Bazzoni) at such meetings” and distinguish the discussions that allegedly

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took place over the phone or in person. Docket entry no. 288 at 10. The testimony is likewise
insufficient to establish that Bazzoni’s alleged participation in the in-person negotiations
surrounding the Note “substantially advanced” the parties’ relationship or were “essential to the
formation of the contract.”
With regard to Centauro’s argument that Bazzoni made fraudulent
representations, or failed to correct misrepresentations, during the alleged in-person New York
meetings, Plaintiff again fails to cite any specific evidence illustrating Bazzoni’s allegedly
wrongful conduct. Plaintiff does not attribute any statements, much less false statements, to
Bazzoni, and does not point to any evidence demonstrating Bazzoni’s silence when any
misrepresentations were allegedly made over the course of what Morabito contends were
“numerous” meetings held to negotiate the Note. In the absence of such evidence, Centauro
cannot prove a sufficient nexus between the alleged fraud and the underlying transactions from
which Bazzoni’s fraudulent conduct purportedly arises. Centauro’s unsupported and conclusory
assertions regarding Bazzoni’s supposed contacts with New York are insufficient to establish a
basis for personal jurisdiction over Bazzoni in connection with Centauro’s fraud claims against
him in his personal capacity.
CONCLUSION
For the foregoing reasons, and those set forth in the Court’s September 18, 2019,
opinion, the Court lacks personal jurisdiction over Elemento and Bazzoni and all claims against
those Defendants are dismissed. This case will proceed solely against CTEL in respect of the
remaining Second and Third causes of action.
This case remains referred to Magistrate Judge Netburn for general pre-trial
management. The parties are directed to meet with Judge Netburn for settlement purposes and to

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discuss any outstanding pretrial matters. The final pretrial conference in this case is adjourned to
October 1, 2021, at 2:00 p.m. The parties shall consult and make submissions in advance of the
conference as provided in docket entry number 46.

SO ORDERED.
Dated: New York, New York
July 26, 2021
__/s/ Laura Taylor Swain_________
LAURA TAYLOR SWAIN
Chief United States District Judge

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