UBS Sec. LLC v. Highland Capital Mgmt., L.P.
Decision Date | 13 March 2012 |
Citation | 93 A.D.3d 489,2012 N.Y. Slip Op. 01777,940 N.Y.S.2d 74 |
Parties | UBS SECURITIES LLC, et al., Plaintiffs–Respondents, v. HIGHLAND CAPITAL MANAGEMENT, L.P., et al., Defendants,Highland Financial Partners, L.P., et al., Defendants–Appellants. |
Court | New York Supreme Court — Appellate Division |
2012 N.Y. Slip Op. 01777
93 A.D.3d 489
940 N.Y.S.2d 74
UBS SECURITIES LLC, et al., Plaintiffs–Respondents,
v.
HIGHLAND CAPITAL MANAGEMENT, L.P., et al., Defendants,Highland Financial Partners, L.P., et al., Defendants–Appellants.
Supreme Court, Appellate Division, First Department, New York.
March 13, 2012.
[940 N.Y.S.2d 74]
Lackey Hershman, LLP, New York (Kieran M. Corcoran of counsel), for appellants.
Kirkland & Ellis, LLP, New York (Andrew B. Clubok of counsel), for respondents.
TOM, J.P., SAXE, ACOSTA, DeGRASSE, ROMÁN, JJ.[93 A.D.3d 490] Order, Supreme Court, New York County (Bernard J. Fried, J.), entered March 3, 2011, which denied the motion of defendants Highland Financial Partners, L.P., Highland Credit Opportunities CDO, L.P., and Strand Advisors, Inc. to dismiss the amended complaint's causes of action for declaratory judgment and fraudulent conveyance, unanimously modified, on the law, to the extent of granting the motion with
respect to claims arising before February 2009, and otherwise affirmed, without costs.
This Court's reversal of an order denying dismissal of the complaint in a related action ( UBS Sec. LLC v. Highland Capital Mgt., L.P., 86 A.D.3d 469, 927 N.Y.S.2d 59 [2011] ), warrants dismissal of a portion of plaintiff's claims in this action due to res judicata since defendants are in privity with the defendant in the other action ( see Simmons v. New York City Health & Hosps. Corp., 71 A.D.3d 410, 411, 894 N.Y.S.2d 750 [2010], lv. denied 16 N.Y.3d 709, 2011 WL 1161735 [2011] ).
Contrary to plaintiff's contention, there is no need to remand the matter for a determination regarding whether defendants are in privity with defendant Highland Capital Management, L.P. The complaint seeks to hold Highland Financial liable as the alter ego of defendant Highland Special Opportunities Holding Company (SOHC). The motion court correctly ruled that New York law governs plaintiff's veil-piercing claim ( see Serio v. Ardra Ins. Co., Ltd., 304 A.D.2d 362, 761 N.Y.S.2d 1 [2003], lv. denied 100 N.Y.2d 516, 769 N.Y.S.2d 202, 801 N.E.2d 423 [2003] ), and that such claim was sufficiently stated based on the alter ego allegations which allege, inter alia, that SOHC's sole board member is on Highland Financial's board, Highland Financial did not distinguish between its debts and obligations and those of SOHC, and that it operated SOHC and Highland Financial as a single economic entity. The fraudulent conveyance claim is also...
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