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Oak Point Partners, Inc v. Dr. Holger Lessing

April 19, 2013


The opinion of the court was delivered by: Lucy H. Koh United States District Judge


Before the Court is Defendant's motion to dismiss on grounds of international comity

("Mot."), and Defendant's unopposed motion to file an amended answer. See ECF Nos. 60; 65. 23

The Court DENIES Defendant's motion to dismiss, and GRANTS Defendant's unopposed motion 24 to file an amended answer. 25




This case arises from the efforts of Plaintiff Oak Point Partners, Inc. ("Oak Point") to 28 collect on a debt allegedly owed by the German company, Exodus GmbH ("Exodus Germany"), to its ultimate parent company, the U.S. corporation EXDS, Inc. ("EXDS"). Specifically, Plaintiff 2 alleges that on or about October 1, 2000, Exodus Germany and EXDS executed a promissory note 3 Germany. See Compl. ¶¶ 13-17, Ex. 2, Ex. 3. The Promissory Note contains a California choice of 5 law provision, and a provision by which the parties submitted to the jurisdiction of this Court and 6 waived venue objections. Id. ¶ 10, Ex. 2. 7

In early 2002, Exodus Germany initiated bankruptcy proceedings in Germany, and Dr. Holger ("Promissory Note"), representing a $23,725,634.00 unsecured loan from EXDS to Exodus 4

In September, 2001, EXDS filed for relief under Chapter 11 of the Bankruptcy Code, 11

U.S.C. § 101, et seq., in the United States Bankruptcy Court for the District of Delaware. Id. ¶ 3. 9

Lessing was appointed insolvency administrator, charged with managing and disposing of Exodus

Germany's assets. Id. ¶ 7. In that capacity, Dr. Lessing is authorized to sue and be sued on behalf of and in connection with claims by and against Exodus Germany. Id. 13

In 2007, Oak Point purchased all of EXDS's remaining assets from EXDS's Bankruptcy

Plan Administrator. Id. ¶ 5. Oak Point, a U.S. "private investment firm specializing in the 15 purchase of residual assets including those at the tail end of commercial bankruptcy cases," paid 16

$29,320.00 for EXDS's remaining assets, including the Promissory Note. See id. and Ex. 1; Decl. 17 of Peter M. Bransten, ECF No. 55, ¶ 2, Ex. A. 18

In October, 2010, Oak Point made the first attempt to present a creditor's claim on the basis

19 of the Promissory Note, filing a claim with Dr. Lessing for the full amount due. Compl. ¶ 22. Dr. 20

Lessing, as the insolvency administrator, objected to Oak Point's claim, in part because EXDS had 21 never presented a creditor's claim despite knowing of Exodus Germany's bankruptcy proceedings 22 since "as early as 2002." Id. ¶ 24; Mot. at 3. On July 7, 2011, Oak Point commenced this instant 23 action against Dr. Lessing in his capacity as the insolvency administrator. Mot. at 1. The 24 complaint alleges breach of the promissory note by Exodus Germany, and asks this Court to 25 establish the validity of Oak Point's claim, as well as to issue an order directing Defendant to 26 include Oak Point's claim in Exodus Germany's insolvency table. Id. at 6. 27

B. Procedural History

2 default judgment against Defendant on November 15, 2011. ECF Nos. 16, 17. On September 18, 3

2012, this Court set aside the default judgment, finding that Defendant's default was due to 4 excusable neglect. ECF No. 46 at 8. 5

6 this Court, a "final distribution report" was filed in Exodus Germany's insolvency case. Decl. of 7

(a) have foreign judgments recognized or (b) have a claim determined on the merits must be 9 commenced within two weeks of the filing of the final distribution report. In compliance with this 10 requirement, Oak Point timely initiated a German proceeding against Dr. Lessing in the Regional

Defendant failed to timely respond to the complaint, and the Clerk entered default and

On June 6, 2012, while Defendant's motion to set aside default judgment was pending in

Janice A. Alwin ("Alwin Decl."), ECF No. 35, ¶ 10. Under German law, actions by a creditor to 8

Court of Frankfurt ("Regional Court"). Alwin Decl. ¶ 10. Oak Point asked the Regional Court to recognize this Court's default judgment or, in the alternative, to determine Oak Point's claim on 13 the merits and to order Defendant to include Oak Point's claim in Exodus Germany's insolvency 14 table. Id. Oak Point subsequently withdrew the former motion in light of this Court's order setting 15 aside the default and default judgment. See Decl. of Caludia Ufer ("Ufer Decl."), ECF No. 71, ¶ 6. 16

Issues currently pending before the Regional Court include whether the Regional Court has

17 exclusive jurisdiction to decide the merit of Oak Point's claim, the validity of Oak Point's claim 18 under the promissory note, choice of law, whether Oak Point's claim is barred by statute of 19 limitation, and the priority of Oak Point's claim. Id. ¶ 7. At a December 4, 2012 hearing before 20 the Regional Court, Oak Point also requested a stay of the German proceeding to have these issues 21 decided by this Court, but the Regional Court declined to immediately rule on the request. Id. ¶ 11. 22

At a hearing before this Court on March 28, 2013 (the "March 28 hearing"), the parties represented 23 that all these issues remain pending before the Regional Court. 24

25 international comity ("Mot."). ECF No. 51. Plaintiff filed an opposition on December 11, 2012 26

Defendant also filed a motion for leave to file a first amended answer, as an alternative to its 28 motion to dismiss. ECF No. 60. Plaintiff does not oppose Defendant's latter motion. ECF No. 65.

On November 13, 2012, Defendant filed the instant motion to dismiss on grounds of

("Opp'n"), to which Defendant replied on December 20, 2012 ("Reply"). ...

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