August 11, 2022
On August 5, 2022, the New York Supreme Court, Commercial Division, dismissed with prejudice a lawsuit brought by Moby S.p.A., one of the world’s largest passenger shipping companies, against Cravath client Morgan Stanley and two of its employees. The lawsuit was related to Moby’s restructuring proceeding in Milan, Italy.
In its complaint, Moby asserted tortious interference claims against two of its creditors—Morgan Stanley and an Italian investor, Antonello Di Meo—for allegedly interfering with Moby’s business relations with a subset of creditors who supported Moby’s restructuring plan. Specifically, Moby claimed that Morgan Stanley and Di Meo were attempting to obtain a controlling majority of Moby’s bonds so they could thwart Moby’s restructuring plan, force it into liquidation and take control of the company.
The lawsuit was originally brought by Moby in the U.S. District Court for the Southern District of New York in September 2021, but after Cravath succeeded in opposing an emergency motion by Moby for a TRO and filed a pre‑motion letter indicating it would file a motion to dismiss, Moby voluntarily dismissed the case and refiled the next day in New York Supreme Court. After Cravath moved to dismiss in state court, Moby removed the case to the U.S. Bankruptcy Court for the Southern District of New York and attempted to transfer the case to the U.S. Bankruptcy Court for the Southern District of Florida, where Moby had filed a Chapter 15 petition seeking recognition of its foreign bankruptcy proceeding. Cravath successfully opposed the removal and transfer, and the case was remanded back to the New York Supreme Court.
Virtual oral argument was held on Friday, August 5, 2022, before Justice Jennifer G. Schecter of the New York Supreme Court, Commercial Division. During the argument, Justice Schecter squarely rejected Moby’s theory of tortious interference, concluding that “there has been no interference and there are no damages that are recoverable,” and ruled from the bench, dismissing the case in its entirety with prejudice.
The Cravath team included partners Michael A. Paskin, who argued the motion to dismiss, Paul H. Zumbro, who argued the remand and transfer issues in bankruptcy court, and Lauren M. Rosenberg, practice area attorney Alexander Gerten and associates Hannah Dwyer, Brian P. Golger, John A. Marcin and Matthew A. Robinson.
The case is Moby S.p.A. v. Morgan Stanley, et al., No. 159425/2021 (Sup. Ct. N.Y. Cnty. 2021).
Deals & Cases
March 22, 2012
On March 22, 2012, the New York Appellate Division, First Department, affirmed New York State Supreme Court Justice Shirley W. Kornreich’s December 10, 2010, decision in favor of Cravath client Morgan Stanley. Judge Kornreich had granted Morgan Stanley’s motion to dismiss a shareholder derivative action brought against current and former Morgan Stanley directors and executive officers and, nominally, Morgan Stanley (Security Police and Fire Professionals of America Retirement Fund, et al. v. John J. Mack, et al.). The action alleged breach of fiduciary duty, corporate waste and unjust enrichment arising from the total amount of compensation that Morgan Stanley paid its employees in fiscal years 2006, 2007 and 2009. The Court ruled that the complaint failed to show that pre-suit demand on Morgan Stanley’s Board of Directors would have been futile because the complaint failed to raise a reasonable doubt that a majority of the Board was disinterested, that a majority of the Board was independent or that the Board’s decision was protected by the business judgment rule. The complaint was dismissed with prejudice, and plaintiffs appealed.
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