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Ritchie Multi-Strategy Global, LLC v. Huizenga Managers Fund, LLC

Superior Court of Delaware

January 15, 2019

RITCHIE MULTI-STRATEGY GLOBAL, LLC, f/k/a/ CAPITAL, LLC, Plaintiff,
v.
HUIZENGA MANAGERS FUND, LLC, Defendant.

          Submitted: December 17, 2018

         On Defendant's Motion to Dismiss the Amended Complaint GRANTED IN PART.

          John A. Sensing, Esq. (Argued), Ryan C. Cicoski, Esq., Attorneys for Plaintiff

          Steven L. Caponi, Esq., Matthew B. Goeller, Esq., K&L Gates, LLP, Christopher J. Barber, Esq. (Argued), Williams Montgomery & John Ltd., Attorneys for Defendant

          MEMORANDUM OPINION

          Hon. Mary M. Johnston, Judge

         FACTUAL AND PROCEDURAL CONTEXT

         This case is one of nine actions brought by either the Defendant or an entity related to the Plaintiff. Two cases were filed in Cook County, Illinois, one case in DuPage County, Illinois, one case in Madison County, Illinois, one case in St. Clair County, Illinois, three cases in Delaware Superior Court, and one action in the Delaware Court of Chancery. The first two cases were brought by Huizenga Managers Fund, LLC in Cook County. The subsequent cases were filed by various Ritchie entities. All of the pending Illinois cases have been transferred to Cook County.

         The 2007 Illinois suit arose from a dispute over the sale of securities. Huizenga Managers Fund, LLC ("Huizenga") is a hedge fund. Ritchie Multi-Strategy Global ("Ritchie") made two sales of securities to Huizenga through a Subscription Agreement. Huizenga brought suit against Ritchie in the Cook County Circuit Court in Illinois, alleging violations of the Delaware Securities Act ("DSA"). After a twenty-six-day trial, the Cook County court entered judgment in favor of Huizenga in regard to one of the two sales. On appeal, the Illinois Court of Appeals affirmed that judgment and granted Huizenga's cross-appeal for recovery relating to the other sale as well. The trial court entered a second judgment. On November 9, 2017, Ritchie filed a notice of appeal of the second judgment.

         Huizenga's second pending Cook County action asserts claims for fraud, conspiracy and fraudulent transfer in connection with the judgments.

         A Ritchie entity filed the first Delaware action in this Court, [1] seeking indemnification from Huizenga. By Opinion dated December 21, 2017, this Court stayed in favor of the Illinois litigation.[2]

         The Madison County Illinois case was filed by "John Doe" against Huizenga, alleging disclosure of confidential information and seeking injunctive relief. The next Illinois action originally was filed in St. Clair County, also seeking injunctive relief on the basis of disclosure of confidential information. The St. Clair County judge transferred that case to Cook County.

         A Ritchie entity filed suit in the Delaware Court of Chancery[3] alleging disclosure of confidential information and seeking injunctive relief. A motion to dismiss is pending.

         This action is the second Delaware Superior Court Case. A Ritchie entity alleges breach of contract on the grounds that Huizenga pursued judgments in the Illinois litigation, and disclosed confidential information in the course of the judgment collection proceedings.

         The latest DuPage County, Illinois action filed by a Ritchie entity alleged that Huizenga disclosed confidential information and made disparaging comments in breach of contract. Plaintiffs motion to voluntarily dismiss was granted.

         The pending DuPage County appeal was dismissed by Order dated December 21, 2018.

         In the third case in Delaware Superior Court, [4] a Ritchie entity requests indemnification in connection with the Illinois judgments. Defendant's motion to dismiss or stay is in the briefing stage.

         Pending before the Court at this time is Huizenga's Motion to Dismiss the Amended Complaint. Huizenga Managers Fund, LLC ("Huizenga") contends that: venue in Delaware is improper and the McWane factors favor two prior actions in Cook County, Illinois; this Court lacks jurisdiction over the claims of Ritchie Multi-Strategy Global, LLC ("Ritchie"); and Ritchie has failed to state a claim upon which relief may be granted.

         STANDARD ...


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