Credit Lyonnais and Clinvest Win Dismissal of Securities Fraud Lawsuit
September 27, 2006
Cleary Gottlieb represented long-time clients Credit Lyonnais and its investment banking affiliate Clinvest in the successful dismissal on forum non conveniens grounds of a securities fraud lawsuit filed by French paper and packaging manufacturer Otor S.A. and certain of its shareholders. The plaintiffs alleged that Credit Lyonnais and Clinvest, acting as banker and advisor to Otor, respectively, had conspired with The Carlyle Group, an investor in Otor, to defraud Otor and its other shareholders, and enable Carlyle to take control of the company (as Carlyle ultimately did). In his dismissal ruling, U.S. District Judge Richard Owen of the Southern District of New York agreed with Credit Lyonnais, Clinvest and with Carlyle (which settled with the plaintiffs while the dismissal motion was pending) that there was no connection between Otor’s claims and New York, and that the parties’ dispute would be more appropriately and conveniently resolved in France, where the parties reside, where all of the relevant transactions occurred, and where all of the relevant witnesses and documents are located. Judge Owen also imposed sanctions on the plaintiffs, awarding the defendants reimbursement of their legal fees.