Rasco Klock wins case to dismiss USD1bn lawsuit by New York-based hedge fund
Blaine Bortnick, managing partner of the New York office for Rasco Klock, along with James Halter, special counsel to the firm, have won a case on a motion to dismiss a USD1 billion lawsuit brought by New York-based hedge fund Kingstown Capital Management LP and its affiliates.
Rasco Klock was representing client, Jan Gerner of the Czech Republic.
Gerner had previously purchased publicly traded shares in ORCO Property Group, a Luxembourg-based real estate development company, whose shares traded on European exchanges. ORCO's controlling shareholder is Radovan Vitek, who was also a defendant in the case.
Kingstown alleged that Vitek secretly acquired control over the ORCO board of directors and stripped ORCO of valuable assets to the detriment of minority shareholders like Kingstown. Gerner, among other defendants, were alleged to have acted together with Vitek. Kingstown had previously filed a similar action in Luxembourg, although Gerner is not a defendant in that case.
Although their Luxembourg Action remained pending, the New York-based investors of Kingstown filed this Racketeer Influenced and Corrupt Organizations Act (RICO) action seeking recovery from Vitek and others for essentially the same misconduct litigated in the Luxembourg case.
Along with the other defendants' attorneys, Bortnick and Halter sought dismissal of Kingstown's claims on numerous grounds.
Relying on two of Rasco Klock's many arguments, US District Judge Denise Cote of the Southern District of New York determined that the Luxembourg action should take precedence and accordingly dismissed the New York federal court case. As a result, she did not decide the other arguments in favor of the motion to dismiss.
"This USD1 billion case was an incredible win for Blaine and James," says Ramón E Rasco, firm managing partner, founder, and head of the firm's Business Law Department. "With years of experience in securities and complex commercial litigation matters in federal and state courts, they were able to achieve success for our client in this highly complicated case."