King v. Export Dev. Can. (In re Zetta Jet USA, Inc.)
| Docket Number | Case No.: 2:17-bk-21386-SK,Adversary No.: 2:19-ap-01383-SK |
| Decision Date | 08 August 2022 |
| Citation | 644 B.R. 12 |
| Parties | IN RE: ZETTA JET USA, INC., Debtor(s), Jonathan D. King, Plaintiff(s), v. Export Development Canada, Glove Assets Investment Limited, Minsheng Business Aviation Limited, Minsheng Financial Leasing Co., Ltd., Li Qi, Truly Great Global Limited, TVPX ARS, Inc., in its capacity as trustee to Zetta MSN 9688 Statutory Trust dated September 20, 2016 (formed as Wyoming statutory trust), Universal Leader Investment Limited, Wells Fargo Bank Northwest, N.A., in its capacity as trustee to Yuntian 3 Trust dated September 20, 2016 (formed and administered in Utah) and its capacity as trustee of Yuntian 4 Trust dated September 20, 2016 (formed and administered in Utah), Yuntian 3 Leasing Company Designated Activity Company, Yuntian 4 Leasing Company Designated Activity Company, Zetta MSN 9606 Statutory Trust dated September 20, 2016 (formed as Wyoming statutory trust), Defendant(s). |
| Court | U.S. Bankruptcy Court — Central District of California |
Brian K. Condon, Arnold & Porter Kaye Scholer LLP, Los Angeles, CA, for Defendants Glove Assets Investment Limited, Truly Great Global Limited, Universal Leader Investment Limited, Li Qi.
Allison B. Hudson, Vedder Price P.C., Chicago, IL, Michael J. Edelman, Vedder Price, New York, NY, for Defendant Export Development Canada.
John K. Lyons, DLA Piper LLP (US), Chicago, IL, for Plaintiff.
Joshua M. Mester, Jones Day, Los Angeles, CA, for Defendants Yuntian 3 Leasing Company Designated Activity Company, Minsheng Business Aviation Limited.
Daniel T. Moss, David S. Torborg, Jones Day, Washington, DC, for Defendant Minsheng Business Aviation Limited, Yuntian 3 Leasing Company Designated Activity Company, Yuntian 4 Leasing Company Designated Activity Company, Minsheng Financial Leasing Co., Ltd.
Scott Olson, Vedder Price, San Francisco, CA, for Defendant Export Development Canada.
Oscar D. Ramallo, Los Angeles, CA, for Defendant Glove Assets Investment Limited, Truly Great Global Limited, Universal Leader Investment Limited.
COURT'S MEMORANDUM OF DECISION ON "MOTION TO ENJOIN SINGAPORE ACTION," DOCKET #360, FILED BY UNIVERSAL LEADER INVESTMENT LIMITED AND GLOVE ASSETS INVESTMENT LIMITED
On 8/3/22 at 9:00 a.m., the Court heard a "Motion to Enjoin Singapore Action," Docket #360, filed by Universal Leader Investment Limited and Glove Assets Investment Limited. Appearances were as noted on the record. All parties were given an opportunity to be heard. At the conclusion of the 8/3/22 hearing, the Court took the Motion under submission.
The Court's Memorandum of Decision regarding the Motion is attached hereto.
Before the Court is a "Motion to Enjoin Singapore Action" filed by Universal Leader Investment Limited (UL) and Glove Assets Investment Limited (GA, and together with UL, UL/GA). AP Docket #360.1 In support of the Motion, UL/GA filed a "Request for Judicial Notice ..." (UL/GA First RJN). AP Docket #361. Jonathan D. King (King), in his capacity as chapter 7 trustee (Trustee) of Zetta Jet USA, Inc. (Zetta USA) and Zetta Jet PTE (Zetta Singapore, and together with Zetta USA, Debtors), filed an "Opposition to Defendants [UL/GA]’s Motion to Enjoin Singapore Action" (Opposition). AP Docket #363.2 In support of the Opposition, the Trustee filed a "Request for Judicial Notice ..." (Trustee RJN), AP Docket #364, an "Objection to Request for Judicial Notice ..." (Trustee First RJN Objection), AP Docket #365, and a "Declaration of Meiyen Tan ..." (Tan 5/18/22 Decl.), AP Docket #366. On 5/25/22, UL/GA filed a "Reply in Support of Motion to Enjoin Singapore Action" (Reply), AP Docket #371, a "Declaration of Andrew Chan ..." (Chan 5/25/22 Decl.), AP Docket #371-1, and a "Reply Request for Judicial Notice ..." (UL/GA Second RJN), AP Docket #372. The Trustee filed an "Objection to Reply Request for Judicial Notice ..." (Trustee Second RJN Objection). AP Docket #377.
On 8/3/22, the Court held a hearing on the Motion (8/3/22 Hearing), during which counsel for the Trustee and UL/GA appeared and were given an opportunity to be heard. At the conclusion of the hearing, the Court took the Motion under submission. Based on the argument in the pleadings and argument of counsel during the hearing, and for the reasons stated in the analysis below, the Court rules as follows: 1) the Motion is granted in part and the Court issues an anti-suit injunction enjoining the Singapore Action, as defined below, against UL/GA; and 2) the Motion is denied in part regarding the request to enjoin the Singapore Action against Li Qi.
On 9/15/17 (Petition Date), Zetta USA and Zetta Singapore filed chapter 11 petitions (collectively, Cases). Zetta USA Docket #1; Zetta Singapore Docket #1. King was appointed as the chapter 11 trustee, and after the Cases were converted, he was appointed as the chapter 7 trustee. Zetta USA Docket #s 159, 452, 458.
On 9/13/19, the Trustee filed an adversary complaint (Original Complaint) against: 1) Yuntian 3 Leasing Company Designated Activity Company f/k/a Yuntian 3 Leasing Company Limited (Yuntian 3); 2) Yuntian 4 Leasing Company Designated Activity Company f/k/a Yuntian 4 Leasing Company Limited (Yuntian 4); 3) Minsheng Financial Leasing Co., Ltd. (Minsheng Financial); 4) Minsheng Business Aviation Limited (Minsheng Business, and together with Minsheng Financial, Minsheng); 5) Export Development Canada (EDC); 6) UL; 7) GA; 8) Truly Great Global Limited (TG); and 9) Li Qi (collectively, the Defendants), which alleged that Zetta Singapore was formed and run by a con artist, Geoffrey Cassidy (Cassidy),3 who, over a two-year period, with the help of the Defendants, obtained $10 million from kickbacks, bribes and embezzlement, while saddling the Debtors with almost $500,000,000 in unsustainable debt incurred by purchasing overpriced aircraft in a down market. AP Docket #1.
The Court granted in part and denied in part a "Motion to Dismiss Counts I, II, IV, V, VIII, XIII, XIV, & XV of Adversary Complaint" filed by UL/GA and TG (Original UL/GA/TG MTD), dismissing the following counts with leave to amend those counts (Original UL/GA/TG MTD Ruling):
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AP Docket #s 45, 174, 188.
On 3/29/21, the Trustee filed a First Amended Complaint (FAC) and approximately two months later, he filed a redlined FAC, which contained the following counts against UL/GA and Li Qi:
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AP Docket #s 232, 253.
In the FAC, the Trustee indicated that he intended "to bring all preference claims against the Defendants in Singapore, including the preference claims set forth in Counts III, IV, V, VIII, IX, X, and XII" of the Original Complaint "and additional preference claims available under Singapore law." FAC ¶ 530 n.7.
UL/GA and TG moved to dismiss the FAC (Second UL/GA/TG MTD) and on 8/20/21, the Court dismissed counts 1, 2, 6, 7, 8, 9, and 10 without leave to amend (Second UL/GA/TG MTD Ruling). AP Docket #s 238, 314, 319. Li Qi also moved to dismiss the FAC (Li Qi MTD). AP Docket #239. The Court found that, because Li Qi was named as a defendant in Counts 1, 2, 7, 8, and 9, all of which were dismissed with prejudice, it did not need to address the issues raised in the Li Qi MTD. Second UL/GA/TG MTD Ruling at 2, 42. On 8/20/21, the Court entered a "Final Judgment in Favor of Universal Leader Investment Limited, Glove Assets Investment Limited, Truly Great Global Limited, and Li Qi" (Judgment), which is currently on appeal (Appeal) to the District Court. AP Docket #s 320, 328.
On 2/28/22, the Trustee filed an action in the High Court of the Republic of Singapore (Singapore High Court), In the Matter of Zetta Jet PTE, Ltd.; Zetta Jet PTE, Ltd. v. Li Qi, Universal Leader Investment Limited, and Glove Assets Investment Limited, Case # HC/OS 193/2022 (Singapore Action), which alleges:
UL/GA First RJN Ex. 24 at 2, 5-6; AP Docket #379 ¶¶ 4.a, 4.c, 58-59, 76-78. In support of the Singapore Action, the Trustee filed an "Affidavit of Luke Furler" (Furler 2/28/22 Aff.). AP Docket #379.
UL/GA request that the Court take judicial notice of: 1) certain documents filed in the Cases or the Adversary Proceeding; 2) documents filed in the Singapore Action; and 3) copies of Singapore statutes. UL/GA First RJN at 3-4. They assert that federal court records and Singaporean court records are proper subjects of judicial notice. Id. (citing Trigueros v. Adams, 658 F.3d 983, 987 (9th Cir. 2011) ). They also highlight that Federal Rule of Civil Procedure (FRCP) 44.1 allows the Court to take judicial notice of foreign statutes. Id. at 4 (citing G & G Prods. LLC v. Rusic, 902 F.3d 940, 948 (9th Cir. 2018) ).
The Trustee responds that the UL/GA First RJN serves no purpose and is a waste of the Court's time because it seeks judicial notice of numerous pleadings and documents filed in the Cases and Adversary Proceeding and the Court need not take judicial notice of its records to consider their effects. Trstee First RJN Objection at 2-3 (citing Lyles v. Ford Motor Credit Co., 2013 WL 987723, at * 2 (C.D. Cal. Mar. 11, 2013) ; Audionics Sys., Inc. v. AAMP of Fla., Inc., 2014 WL 12580235, at *2 (C.D. Cal. Mar. 24, 2014) ). The Trustee asserts that because of the UL/GA First RJN, he was forced to request that the Court take judicial notice of dozens of documents for no apparent purpose. Id. at 3 n.1.
UL/GA did not reply to the Trustee First RJN Objection.
The Trustee requests that the Court take judicial notice of: 1) certain documents filed in the Cases or...
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