Wormwood Capital LLC v. Mulleady

203 A.D.3d 500

160 N.Y.S.3d 876 (Mem)

WORMWOOD CAPITAL LLC, et al., Plaintiffs–Appellants,

v.Kevin P. MULLEADY et al., Defendants–Respondents,Phoenixus AG, Nominal Defendant–Respondent.

15493

Index No. 656481/20

Case No. 2021–03941

Supreme Court, Appellate Division, First Department, New York.

ENTERED: March 10, 2022

Kishner Miller Himes P.C., New York (Scott M. Himes of counsel), for appellants.

Morgan, Lewis & Bockius LLP, New York (Brian A. Herman of counsel), for respondents.

Manzanet–Daniels, J.P., Mazzarelli, Gonza´lez, Shulman, Rodriguez, JJ.

Order, Supreme Court, New York County (Joel M. Cohen, J.), entered on or about September 20, 2021, which granted defendants' motion to dismiss the complaint pursuant to CPLR 327(a), unanimously reversed, on the law, with costs, and the motion denied.

Plaintiffs, minority shareholders of Swiss company Phoenixus AG, commenced this derivative action against Phoenixus and certain members of its board of directors, asserting causes of action for breach of fiduciary duty, breach of duty of loyalty, corporate waste, contribution, and indemnification. Plaintiffs essentially claim that defendant-board members, who were also officers of Phoenixus's Delaware subsidiary, conspired with each other and Phoenixus's founder, nonparty Martin Shkreli, to engage in self-dealing and that they took actions which harmed Phoenixus and its shareholders.

Defendants did not establish that in the interest of substantial justice, this action should be heard in another forum, namely, Switzerland (see generally CPLR 327[a] ; Islamic Republic of Iran v. Pahlavi, 62 N.Y.2d 474, 479, 478 N.Y.S.2d 597, 467 N.E.2d 245 [1984], cert denied 469 U.S. 1108, 105 S.Ct. 783, 83 L.Ed.2d 778 [1985] ). Adjudication of plaintiffs' claims, which are undisputedly governed by Swiss law, will not place an undue burden on New York courts (see generally Shin–Etsu Chem. Co., Ltd. v. ICICI Bank Ltd., 9 A.D.3d 171, 178, 777 N.Y.S.2d 69 [1st Dept. 2004] ). New York courts are frequently called on to apply the laws of foreign jurisdictions and in this case, there is no indication that the relevant law, which is from only one foreign jurisdiction, is in dispute or is distinctly abstruse (e.g. Pacific Alliance Asia Opportunity Fund, L.P. v. Kwok Ho Wan, 160 A.D.3d 452, 453, 76 N.Y.S.3d 111 [1st Dept. 2018] ; see also Yoshida Print. Co. v. Aiba, 213 A.D.2d 275, 275, 624 N.Y.S.2d 128 [1st Dept. 1995] ; Anagnostou v. Stifel, 204 A.D.2d 61, 62, 611 N.Y.S.2d 525 [1st Dept. 1994] ). That plaintiffs seek certain nonmonetary relief that may not be available or enforceable in Switzerland does not cut in favor of dismissal...