Summary:
The bankrupt company, Cuzco USA, is a Hawaiian limited liability company, whose sole member is Cuzco Korea, a Korean corporation. Plaintiff Tera Resources is a shareholder of Cuzco Korea, who alleges that Cuzco USA's bankruptcy is a scheme to divert assets away from Cuzco Korea. Tera Resources filed the complaint alleging a number of claims including fraud on court, fraud against Tera, breach of fiduciary duty, etc. The defendants moved to dismiss by offering a number of theories.
The court granted in part and denied in part the motion to dismiss. Notably, the court rejected the defendants' argument that this action was essentially a shareholder derivative suit as to a Korean corporation, and the Korean law provides that such a suit can only be brought in the Seoul District Court. The court found that a foreign statute cannot change the subject matter jurisdiction of a United States court. However, the court dismissed the plaintiff's claims that relate solely to Cuzco Korea, as those claims were not sufficiently related to the core bankruptcy action.
Takeaway:
Nothing very new in this action, but an interesting object lesson for how complicated a multinational bankruptcy case could be.
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