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Deutsche Bank AG v. Devon Park Bioventures, L.P.

Court of Chancery of Delaware

July 15, 2019

DEUTSCHE BANK AG, Counterclaim Defendant, and SEBASTIAN HOLDINGS, INC. and UNIVERSAL LOGISTIC MATTERS, S.A., Crossclaim Defendants.



         A. In November 2017, Deutsche Bank AG ("Deutsche Bank") filed this action in aid of its efforts to collect on a judgment now exceeding $300 million that Deutsche Bank had obtained against Sebastian Holdings, Inc. ("SHI"), an entity controlled by Alexander Vik. Deutsche Bank alleges that SHI has engaged in a series of unlawful transactions to frustrate its collection of that judgment.

         B. This case concerns one of those allegedly unlawful transactions: SHPs transfer of its interest in a Delaware entity known as Devon Park Bioventures, L.P. ("Devon Park")-a venture capital fund-to CPR Management, S.A. ("CPR") (f/k/a Universal Logistic Matters, S.A.), [1] which allegedly is owned by Vik's father. The transfer was effectuated under an Assignment and Assumption Agreement, dated as of August 22, 2014. That agreement, which is governed by Delaware law, appoints the general partner of Devon Park (another Delaware entity known as Devon Park Associates, L.P.) as CPR's attorney-in-fact, with the authority to act on CPR's behalf to execute and file various documents.

         C. CPR and SHI, which are both foreign entities, moved to dismiss the case against them for lack of personal jurisdiction, which prompted Deutsche Bank to seek jurisdictional discovery. CPR and SHI objected to providing this discovery.

         D. On July 27, 2018, the court entered an order granting in part and denying in part Deutsche Bank's motion to compel jurisdictional discovery. The net result of the court's ruling was to permit document discovery and interrogatories concerning three specific topics.[2] The court rejected a number of Deutsche Bank's theories for jurisdictional discovery and its request to take depositions except upon leave of court after the written discovery was completed. The implementing order explains that the court's decision on whether to permit depositions would "largely be guided by what, if any, additional evidence of substantial acts in Delaware has actually been uncovered."[3] Unfortunately, the jurisdictional discovery the court authorized almost one year ago has not proceeded smoothly and is still not complete.

         E. On December 17, 2018, Deutsche Bank moved to compel discovery and sought sanctions. At the conclusion of a hearing held on February 4, 2019, the court expressed concern that complete searches were not done to locate documents responsive to the three categories the court had delineated in the July 2018 order, and that CPR was obstructing discovery by improperly concealing the identity of its principals)-information that is relevant to identifying the appropriate custodians for document searches and preparing a privilege log.[4] After expressing these concerns, the court directed the parties to meet and confer based on the court's guidance.

         F. On April 8, 2019, Deutsche Bank renewed its motion to compel discovery, which CPR and SHI both opposed. CPR also cross-moved for "clarification" of the July 2018 order and to obtain affirmative discovery from Deutsche Bank and Devon Park.

         G. On June 12, 2019, the court entered three orders: (i) an order granting in part and denying in part Deutsche Bank's renewed motion to compel discovery, [5](ii) an order denying CPR's cross-motion for discovery, [6] and (iii) a scheduling order for completing the jurisdictional discovery so that this chapter of the case could be brought to closure promptly.[7] No hearing was needed to resolve these issues.

         H. The first of these three orders (hereafter, the "June 2019 order") did not change the scope of discovery the court had ordered in July 2018, but merely provided clarifications (e.g., concerning search terms, custodians, and privilege logs) to complete that discovery. Indeed, the June 2019 order expressly states that "only documents that fall into one of the three categories [set forth in the July 2018 order] will need to be produced from the documents collected using search terms."[8] To address the court's concern that CPR had been obstructing discovery, the June 2019 order required that CPR identify in its privilege log the "individual serving as the agent of CPR with respect to any document withheld on the grounds of privilege" and that such person be included as a custodian for document searches.[9]

         I. On June 24, 2019, CPR filed an application for certification of an interlocutory appeal of the June 2019 order, which CPR corrected on June 25, 2019. SHI, the other party that is required to comply with the June 2019 order, has not sought interlocutory review of the June 2019 order.

         J. On June 27, 2019, CPR filed a motion for a stay pending appeal, which SHI joined on June 28, 2019.

         NOW THEREFORE, the court having considered the parties' submissions, IT IS HEREBY ORDERED, ADJUDGED, and DECREED this 15th day of July, 2019, as follows:

         Application for Certification of Interlocutory Appeal

         1. Supreme Court Rule 42 provides that an interlocutory appeal will not be certified "unless the order of the trial court decides a substantial issue of material importance that merits appellate review before a final judgment."[10] In my view, appellate review at this time is not warranted for several reasons.

          2. First, appellate review is not warranted now because CPR's application is untimely. In the court's view, CPR is-in reality-attempting to relitigate this court's July 2018 order. As explained above, the June 2019 order did not break new ground. It simply provided additional direction to ensure that CPR and SHI conduct complete searches in order to identify all documents (and not just cherry-picked documents) responsive to the three categories of jurisdictional ...

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