SAN FRANCISCO – June 27, 2019 – Howard Holderness of Greenberg Traurig, LLP and Mortimer H. Hartwell of Vinson & Elkins, LLP, led a multi-firm team that secured a final judgment of approximately $75 million for clients Wuxi Luoshe Printing and Dyeing Co., Ltd. and Zhize Huang. The judgment followed a complex breach of fiduciary duty trial in San Mateo Superior Court against Standard Fiber, Inc. (SFI), now known as TA Home, Inc. (TA), and Anshan Li (Li). Yesterday, the California Court of Appeal affirmed that judgment in total.
“This outcome has been years in the making, and we are very pleased to secure for our clients what is rightfully theirs. The judgment was significant in that it is one of the largest ever victories for a Chinese national in U.S. court,” Holderness said.
Hartwell added, “The win is all the more sweet as the defendants have gone to extraordinary lengths to try to avoid the impact of the judgment against them.”
The case involved the alleged misappropriation and theft of tens of millions of dollars related to the management and ownership of SFI, a distributor in the United States and Canada of textile and bedding products manufactured by Wuxi Luoshe, a Chinese company. The two shareholders of SFI were plaintiff Huang, who owned a minority interest, and defendant Li. Huang alleged that SFI’s success was directly tied to that of Wuxi Luoshe. Li cashed in on this success by allegedly pocketing profits that should have been shared and eventually selling SFI without informing Huang. In doing so, Li breached fiduciary and contractual duties in order to fraudulently conceal the sale and collect the payout, Huang alleged. Li subsequently sold the company to Standard Fiber, LLC (SFL).
The case concluded before the trial court on Sept. 1, 2016, when the trial court denied Defendants’ requests for a new trial and for a stay of execution of the judgment. The appeal that followed asserted that Defendants should have been granted a jury trial despite affirmatively waiving that right and failing to post jury fees. Li also claimed both that the trial court had misinterpreted the rights of California shareholders and misapplied the relevant statutes of limitations. The appellate court unanimously rejected each of these arguments.
Holderness focuses his practice on complex commercial litigation matters on behalf of both plaintiffs and defendants. His experience includes matters involving fraud, breach of contract, product liability, false advertising, and unfair business practices, as well as insurance coverage, antitrust, and class action claims.
Hartwell focuses his practice on complex commercial litigation, corporate governance disputes, complex products liability, toxic tort, catastrophic incident, environmental, and class action cases.
About Greenberg Traurig’s Litigation Practice: Greenberg Traurig’s Litigation Practice includes a team of more than 600 attorneys. The firm’s trial lawyers regularly appear in state and federal courts throughout the country, as well as in appellate courts and before international arbitration panels. They work closely with in-house counsel to develop a strategy that best fits a litigation cost and proficiency model appropriate to the client’s unique needs and goals.
About Greenberg Traurig, LLP: Greenberg Traurig, LLP (GT) has more than 2,000 attorneys in 41 locations in the United States, Latin America, Europe, Asia, and the Middle East. GT has been recognized for its philanthropic giving, diversity, and innovation, and is consistently among the largest firms in the U.S. on the Law360 400 and among the Top 20 on the Am Law Global 100. Web: http://www.gtlaw.com Twitter: @GT_Law.
“This outcome has been years in the making, and we are very pleased to secure for our clients what is rightfully theirs. The judgment was significant in that it is one of the largest ever victories for a Chinese national in U.S. court,” Holderness said.
Hartwell added, “The win is all the more sweet as the defendants have gone to extraordinary lengths to try to avoid the impact of the judgment against them.”
The case involved the alleged misappropriation and theft of tens of millions of dollars related to the management and ownership of SFI, a distributor in the United States and Canada of textile and bedding products manufactured by Wuxi Luoshe, a Chinese company. The two shareholders of SFI were plaintiff Huang, who owned a minority interest, and defendant Li. Huang alleged that SFI’s success was directly tied to that of Wuxi Luoshe. Li cashed in on this success by allegedly pocketing profits that should have been shared and eventually selling SFI without informing Huang. In doing so, Li breached fiduciary and contractual duties in order to fraudulently conceal the sale and collect the payout, Huang alleged. Li subsequently sold the company to Standard Fiber, LLC (SFL).
The case concluded before the trial court on Sept. 1, 2016, when the trial court denied Defendants’ requests for a new trial and for a stay of execution of the judgment. The appeal that followed asserted that Defendants should have been granted a jury trial despite affirmatively waiving that right and failing to post jury fees. Li also claimed both that the trial court had misinterpreted the rights of California shareholders and misapplied the relevant statutes of limitations. The appellate court unanimously rejected each of these arguments.
Holderness focuses his practice on complex commercial litigation matters on behalf of both plaintiffs and defendants. His experience includes matters involving fraud, breach of contract, product liability, false advertising, and unfair business practices, as well as insurance coverage, antitrust, and class action claims.
Hartwell focuses his practice on complex commercial litigation, corporate governance disputes, complex products liability, toxic tort, catastrophic incident, environmental, and class action cases.
About Greenberg Traurig’s Litigation Practice: Greenberg Traurig’s Litigation Practice includes a team of more than 600 attorneys. The firm’s trial lawyers regularly appear in state and federal courts throughout the country, as well as in appellate courts and before international arbitration panels. They work closely with in-house counsel to develop a strategy that best fits a litigation cost and proficiency model appropriate to the client’s unique needs and goals.
About Greenberg Traurig, LLP: Greenberg Traurig, LLP (GT) has more than 2,000 attorneys in 41 locations in the United States, Latin America, Europe, Asia, and the Middle East. GT has been recognized for its philanthropic giving, diversity, and innovation, and is consistently among the largest firms in the U.S. on the Law360 400 and among the Top 20 on the Am Law Global 100. Web: http://www.gtlaw.com Twitter: @GT_Law.