Daewoo Motor America, Inc. v. General Motors Corp.

• Citation: 459 F.3d 1249
• Decision Date: 11 August 2006
• Docket Number: No. 04-15878.,04-15878.
• Parties: DAEWOO MOTOR AMERICA, INC., Plaintiff-Appellant, v. GENERAL MOTORS CORP., Suzuki Motor Corporation, American Suzuki Motor Corporation, Defendants-Appellees, GM Daewoo Auto & Technology Co., Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

459 F.3d 1249

DAEWOO MOTOR AMERICA, INC., Plaintiff-Appellant, v. GENERAL MOTORS CORP., Suzuki Motor Corporation, American Suzuki Motor Corporation, Defendants-Appellees GM Daewoo Auto & Technology Co., Defendant.

No. 04-15878.

United States Court of Appeals, Eleventh Circuit.

August 11, 2006.

COPYRIGHT MATERIAL OMITTED

Kenneth A. O'Brien, Jr., Joseph F. Coyne, Jr., Michael Joe Jaurigue, Sheppard, Mullin, Richter & Hampton LLP, Isaac M. Pachulski, Stutman, Treister & Glatt, Los Angeles, CA, Roy T. Englert, Jr., Lawrence S. Robbins, Alice W. Yao, Robbins, Russell, Englert, Orseck & Untereiner LLP, Washington, DC, for Plaintiff-Appellant.

Andrew Baker Bloomer, Richard C. Godfrey, Catherine L. Fitzpatrick, Kirkland & Ellis LLP, Chicago, IL, Stephen T. Owens, Michael T. Purleski, Squire, Sanders & Dempsey, LLP, David Walter Quinto, Quinn, Emanuel, Los Angeles, CA, for Defendants-Appellees and Defendant.

Appeal from the United States District Court for the Middle District of Florida.

Before TJOFLAT, PRYOR and ALARCÓN^*, Circuit Judges.

PRYOR, Circuit Judge:

The main issue presented in this appeal is whether the district court abused its discretion when it dismissed several claims of Daewoo Motor America, Inc., against General Motors Corporation, Suzuki Motor Corporation, American Suzuki Motor Corporation, and GM Daewoo Auto & Technology Co. (GMDAT) on the ground of international comity. Daewoo America complained that its legal rights, as the exclusive distributor of Daewoo vehicles in the United States, were violated after a Korean bankruptcy court approved a sale of the assets and liabilities of the Korean parent company of Daewoo America and the defendants then sold in the United States automobiles manufactured by GMDAT. Daewoo America was a claimant represented by counsel in the Korean bankruptcy proceedings but, after notice, did not object to the sale of the assets and liabilities of its Korean parent. We affirm.

I. BACKGROUND

Daewoo America was incorporated in 1997 as a wholly owned subsidiary of Daewoo Motor Co., Ltd. (Daewoo Korea), a South Korean automobile manufacturer. Daewoo America served as the exclusive distributor of Daewoo automobiles in the United States and the exclusive provider of warranty services and replacement parts. On November 18, 1999, Daewoo Korea and Daewoo America entered into an Automobile Purchase and Distribution Agreement. Under the Agreement, Daewoo Korea agreed to sell to Daewoo America certain "Products" and granted to Daewoo America "the exclusive right to distribute, sell, rent, lease and otherwise dispose of . . . and service . . . the Products in the United States . . . ." The Agreement also provided that "`Products' shall mean the motor vehicles provided on Exhibit A attached hereto (as said Exhibit A may be amended from time to time by Seller to add or delete motor vehicle models)." The parties agree that "Exhibit A" never existed and was not attached to the Agreement.

On November 10, 2000, after experiencing financial difficulties, Daewoo Korea filed for bankruptcy protection in Korea under the Korean Corporate Reorganization Act, and the Korean court appointed a receiver. By letter dated November 8, 2000, Daewoo Korea notified Daewoo America of its reorganization plans. The letter included a summary of Korean reorganization law. The letter also warned that creditors must participate in the reorganization and that failure to file a claim would result in a loss of rights.

On November 14, 2002, the Korean bankruptcy court ordered the preservation of the assets of Daewoo Korea. On November 30, 2000, the court ordered the commencement of the reorganization procedure and set the deadline of January 15, 2001, for filing claims. On December 5, 2000, the receiver for Daewoo Korea sent Daewoo America a notice of the filing deadline and guidelines on how to file a claim. In response, Dong Jin Lee, President of Daewoo America, communicated with representatives of Daewoo Korea to obtain assistance with filing a claim in the reorganization proceeding and with employment of an attorney. With the aid of Daewoo Korea, Daewoo America retained the law firm Jin & Lee and executed a Power of Attorney in favor of the firm. Daewoo Korea also appointed agents to act on behalf of Daewoo America in the Korean proceedings. Daewoo America did not object to the appointments.

With the aid of Jin & Lee, Daewoo America filed a proof of claim before the Korean court for approximately $33 million, and on February 3, 2001, filed a supplemental claim for over $45.5 million. On February 26, 2001, the creditors of Daewoo Korea held a meeting at which they reviewed the claims. Jin & Lee attended the meeting on behalf of Daewoo America. The Receiver objected to most of the claims of Daewoo America, which was notified of the objections by the Korean court. The Korean court also notified Daewoo America that it was required to affirm its claims by filing a claim against the Receiver by the end of March.

Daewoo America then filed a complaint in the Korean court against the Receiver and Daewoo Korea. Daewoo America challenged the objections of the Receiver and sought approval of its claims. The following month, Daewoo America dismissed its complaint. In 2002, Daewoo America filed a second supplemental claim for approximately $1.1 million, which the Receiver approved in its entirety.

Both before and during its reorganization proceedings, Daewoo Korea negotiated with Ford Motor Company and GM about the possibility of a transfer of ownership. In September 2000, Ford withdrew its bid, but negotiations with GM continued. On September 20, 2001, Daewoo Korea and GM executed a non-binding Memorandum of Understanding regarding the sale of assets of Daewoo Korea to GM. The Korean court approved the Memorandum of Understanding on September 26, 2001.

Daewoo America contends that it was to be included in the assets to be purchased by GM, and GM affirmatively represented that Daewoo America would continue to distribute automobiles in the United States under the acquisition plan intended by GM. At an automobile convention in January 2002, GM executives allegedly represented that they looked forward to a working relationship between Daewoo America and GM. Daewoo America alleges that it continued to expand its business based on these representations by GM.

On March 27, 2002, the management team of Daewoo America wrote to GM regarding the possible exclusion of Daewoo America from the asset acquisition. The management team expressed its "extreme concerns about the far reaching negative implications of the possible exclusion of . . . U.S. operations from the agreements associated with General Motors' pending acquisition of certain assets of Daewoo Korea." The letter also expressed concern about the "potential breach arising from the Automobile Purchase and Distribution Agreement between Daewoo Korea and Daewoo America."

By a letter dated April 17, 2002, Daewoo Korea notified Daewoo America of a meeting to examine the proposed reorganization plan to be held on May 6, 2002. Daewoo America also received a letter of proxy and a summary of the proposed reorganization plan. The summary of the proposed reorganization did not refer to the Memorandum of Understanding or the proposed asset transfer. Despite the concerns expressed in the March 27, 2002, letter, Daewoo America executed the proxy and thereby accepted "the Proposed Reorganization Plan filed by the receiver" and granted to "Han Su Pyon, . . . an officer of [Daewoo Korea], the full power and authority to exercise its voting rights in the meeting of parties in interest as though exercised by the undersigned."

On April 30, 2002, GM, Daewoo Korea, and creditors of Daewoo Korea entered into a Master Transaction Agreement (MTA). The MTA contemplated the creation of a new company, GMDAT, to acquire assets and assume liabilities of Daewoo Korea. Among the assets to be acquired were the vehicle manufacturing plants at which the Daewoo automobiles to be exported for sale in the United States were manufactured. Daewoo America was not included in the assets to be transferred. At the May 6, 2002, meeting of the creditors, the creditors voted in favor of the original reorganization plan. The Korean court approved the plan, but requested that the receiver file a modified reorganization plan that reflected the terms of the MTA entered on April 30, 2002.

At the same time, the Receiver for Daewoo Korea sought permission from the Korean court to terminate the distribution agreement with Daewoo America for nonpayment of approximately $130 million. The Korean court approved the petition of Daewoo Korea on May 6, 2002. The Receiver sent a letter to Daewoo America requesting payment of the outstanding debt, barring which the Distribution Agreement would be terminated.

On April 21, 2002, Daewoo Korea requested permission from the Korean court for Daewoo America to file for bankruptcy in the United States. The Korean court approved the petition, and on May 16, 2002, Daewoo America filed for protection under Chapter 11 in the United States Bankruptcy Court for the Central District of California. In proceedings before the California bankruptcy court, Daewoo America stated that it "fully intend[ed] to pursue all possible causes of action against Daewoo Korea, GM and others, if appropriate." In a letter to counsel for GM dated June 7, 2002, counsel for Daewoo America advised that "[Daewoo America] deems any action by GM to distribute automobiles in the United States manufactured at facilities of Daewoo Motor Co., Ltd. to be a violation and infringement of [Daewoo America's] exclusive right to distribute [Daewoo America] automobile products in the United States."

On September 12, 2002, Daewoo Korea filed a modified reorganization plan that included the terms of the MTA. Daewoo Korea then sent a letter to its creditors to inform them that a meeting on the modified reorganization plan...