Malecki Law is pleased to announce that we recently obtained Summary Judgment dismissal on behalf of a well-known Chinese inventor, who was a Defendant in the case that was pending in the Commercial Division of New York Supreme Court in New York County. Our client was sued by hedge fund Abax Lotus Ltd. over speculative investments Abax made more than eight years ago in a company called China Mobile Media Technology, Inc. The Inventor was a shareholder in China Mobile Media. Abax has filed a notice of its intention to appeal the decision, which both dismissed Abax’s motion for judgment, and granted the Inventor’s motion dismissing all claims against him.
Our client was personally named in the New York State lawsuit, alongside the company he worked for, over Abax’s investment. Abax previously obtained a judgment against the company, but sought to hold the Defendant personally liable. Justice O. Peter Sherwood, ruling from the bench, correctly noted that the Defendant-Inventor’s agreement as a shareholder did not make him personally liable for the company’s failures.
Correctly citing the seminal New York Court of Appeals case Hooper Assocs. v. AGS Computers, Inc., Justice Sherwood determined that the indemnification provisions relied on by Abax for the Defendant’s supposed liability did not apply. Justice Sherwood went further, determining that Abax “[did not] have the goods” to establish their claim against the Defendant.
Generally speaking, shareholders invest money in exchange for a share of ownership in the business. The operation of the business is left to the directors and management. Shareholders are almost never sued for business-related actions in the normal course that have or have not been taken by the company. The current case exemplifies overreaching by a hedge fund to seek liability where none exists.
The Attorneys at Malecki Law regularly represent the interests of investors and shareholders, no matter whether they are defending against baseless claims, or are prosecuting lawsuits to enforce their rights. In this recent case, our Inventor client was rightfully exonerated from alleged liability for an investment made by the company, of which the Inventor was a shareholder.
If you have been named in a lawsuit as a shareholder, please contact the investment fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233, or by clicking here.
Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have become embroiled in litigation, or have suffered losses due to misadvice from their broker or other financial firms.