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1
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MEMORANDUM OPINION
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EXTRACTED KEY WORDS
DEFENDANTS MFC PLAINTIFF DELAWARE SMITH COMPLAINT TRANSACTIONS PREFERRED STOCK ZANATTA CONTROL ALLEGES ICHOR FACTS LOGAN GIBRALT STOCKHOLDERS PERSONAL JURISDICTION INDENTURE SELF-DEALING TRANSACTIONS DEFENDANTS ARGUE FIDUCIARY DUTY OQ-HYUN CHIN ALLEGATIONS CONSPIRACY SHAREHOLDERS PROVISION CERTIFICATE AFFILIATES ATTORNEYS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE :;
IN AND FOR NEW CASTLE COUNTY
GIBRALT CAPITAL CORPORATION, for itself, :
as class representative and derivatively on behalf of :
Drummond Financial Corporation, a Delaware :
corporation,
Plaintiff,
V. C.A. No. 17422
MICHAEL J. SMITH, JIMMY S.H. LEE,
ROY ZANATTA, OQ-HYUN CHIN, and
MFC BANCORP, LTD.,
and
DRUMMOND FINANCIAL CORPORATION, '
: -
a Delaware corporation, solely as a nominal
defendant.
MEMORANDUM OPINION
Date Submitted: January 22, :2001
Date Decided: May 8. 2001
Stephen E. Jenkins and Richard D. Heins, Esquires, of ASHBY & GEDDES,
Wilmington, Delaware; Attorneys for Plaintiff
Brett D. Fallon, Esquire, of MORRIS, JAMES, HITCHENS & WILLIAMS, LLP,
Wilmington, Delaware; and James V. Kearney, Esquire of LATHAM & WATKINS,
New York, New York; Attorneys for Defendants Michael J. Smith, Jimmy S.H.
Lee, Roy Zanatta, Oq-Hyun Chen and MFC Bancorp L,td.
John L. Reed, Esquire, of DUANE, MORRIS & HECKSCHER, LLP, Wilmington,
Delaware; Attorneys for Nominal Defendant Drummond Financial Corporation
JACOBS, VHCE CHANCELLOR
A shamholder of Drummond Financial Corporation ("Drummond" or
"the Company") brings this action both individually and derivatively on
Drummond's behalf. The plaintiff claims that the defendants, who
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2
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MEMORANDUM OPINION (REVISED)
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EXTRACTED KEY WORDS
DEFENDANTS MFC PLAINTIFF DELAWARE COMPLAINT SMITH COURT PREFERRED STOCK TRANSACTIONS SHAREHOLDERS CONTROL ALLEGES ZANATTA ICHOR FACTS CAUSED DRUMMOND STOCKHOLDERS PERSONAL JURISDICTION INDENTURE SELF-DEALING FIDUCIARY DUTY REPRESENTATIVES OQ-HYUN CHIN ALLEGATIONS DEFENDANTS ARGUE CONSPIRACY CERTIFICATE PROVISION AFFILIATES |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
GIBRALT CAPITAL CORPORATION, for itself, :
as class representative and derivatively on behalf of :
Dmmmond Financial Corporation, a Delaware :
corporation,
Plaintiff,
V.. C.A. No. 17422
MICHAEL J. SMITH, JIMMY S.H. LEE,
ROY ZANATTA, OQ-HYUN CHIN, and
MFC BANCORP, LTD., i-
r - .
i I
and. -:
1 C'.3
DRUMMOND FINANCIAL CORPORATION, ;
a Delaware corporation, solely as a nominal
defendant.
MEMORANDUM OPINION
Date Submitted: January 22,200l
Date Decided: May 8,200l
Date Revised: May 9. 2001
Stephen E. Jenkins and Richard D. Heins, Esquires, of ASHBY & GEDDES,
Wilmington, Delaware; Attorneys for Plaintiff
Brett D. Fallon, Esquire, of MORRIS, JAMES, HITCHENS & WIL.LIAMS, LLP,
Wilmington, Delaware; and James V. Keamey, Esquire of LATHAM &WATKINS,
New York, New York; Attorneys for Defendants Michael J. Smith, Jimmy S.H.
Lee, Roy Zanatta, Oq-Hyun Chen and MFC Bancorp Ltd.
John L. Reed, Esquire, of DUANE, MORRIS & HECKSCHER, LLI?, Wilmington,
Delaware; Attorneys for Nominal Defendant Drummond Financial Corporation
JACOBS, VICE CHANCELLOR
A shareholder of Drummond Financial Corporation ("Drummond" or
"the Company") brings this action both individually and derivatively on
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3
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DEFENDANTS REPLY BRIEF IN FURTHER SUPPORT OF MOTION TO DISMISS
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EXTRACTED KEY WORDS
COMPLAINT MFC DRUMMOND DEFENDANTS DELAWARE COURT DEL PLAINTIFF SUPPORT TRANSACTION ZANATTA RECEIVER BONDS MOTION AMENDED COMPLAINT FAILS PREFERRED STOCK JURISDICTION FIDUCIARY DUTY CONVENTION SHAREHOLDERS CLASS ACTION COMPLAINT ASSERTION CITATIONS REPURCHASE CORPORATE OPPORTUNITY ICHOR COMMON STOCK DISCLOSURE ALLEGATION CONNECTION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
GIBRALT CAPITAL CORPORATION for
itself, as class representative and derivatively
on behalf of Drummond Financial Corporation,
a Delaware corporation,
Plaintiff,
V.
MICHAEL J. SMITH, JIMMY S.H. LEE, C. A. No. 17422-NC
ROY ZANATTA, OQ-HYUN CHIN, MFC
BANCORP LTD., i
Defendants,
-amd-
DRUMMOND FINANCIAL
CORPORATION, a Delaware corporation,
solely as a nominal defendant.
DEFENDANTS' REPLY BRIEF IN FURTHER SUPPORT OF
MOTION TO DISMISS THE AMENDED AND SUPPLEMENTAL DERIVATIVE AND
CLASS ACTION COMPLAINT AND PETITION FOR A RECEIVER
MORRIS, JAMES, HITCHENS & WILLIAMS
LLP
Brett D. Fallon
Stephanie M. Tarabicos
222 Delaware Avenue
P.O. Box 2306
Wilmington, DE 19899
(302) 888-6800
Attorneys for Defendants Michael J. Smith,
Jimmy S.H Lee, Roy Zanatta, Oq-Hyun Chen
and MFC B ancorp Ltd.
OF COUNSEL:
LATHAM & WATKINS
James V. :Kearney
885 Third Avenue
Suite 1000
New York., NY 10022
(212) 906-1200 October 30,200O
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4
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CERTAIN DEFENDANTS OPENING BRIEF IN SUPPORT OF MOTION TO DISMISS THE AMENDED AND SUPPL. DERIVATIVE AND CLASS ACTION COMPLAINT AND PETITION FOR A RECEIVER
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EXTRACTED KEY WORDS
AMENDED COMPLAINT MFC GIBRALT DEFENDANTS DELAWARE STOCK ICHOR TRANSACTIONS ALLEGATIONS COURT DEL COMPL ZANATTA BONDS ALLEGE DISCLOSURE FIDUCIARY DUTY ICHOR COMMON STOCK DIRECTORS JURISDICTION BOND EXCHANGE ENVIROPUR PREFERRED STOCK REPURCHASE FINANCIAL CORPORATION OQ-HYUN CHIN SHAREHOLDERS FACTUAL ALLEGATIONS STOCKHOLDERS |
. . .
g&y&; 8'
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE&' %" ' ki ii-=
IN AND FOR NEW CASTLE COUNTY
GIBRALT CAPITAL CORPORATION for
itself, as class representative and derivatively
on behalf of Drummond Financial Corporation,
a Delaware corporation,
V.
MICHAEL J. SMITH, JIMMY S.H. LEE, C. A. No. 17422-NC
ROY ZANATTA, OQ-HYUN CHIN, MFC
BANCORP LTD.,
Defendants,
DRUMMOND FINANCIAL
CORPORATION, a Delaware corporation,
solely as a nominal defendant.
CERTAIN DEFENDANTS' OPENING BRIEF IlN SUPPORT OF
MOTION TO DISMISS THE AMENDED AND SUPPLEMENTAL DERIVATIVE
AND CLASS ACTION COMPLAINT AND PETITION FOR A RECEIVER
MORRIS, JAMES HITCHENS & WILLIAMS
LLP
Brett D. Fallon
222 Delaware Avenue
P.O. Box 2306
Wilmington, DE 19899
(302) 888-6800
Attorneys for Defendants Michael J. Smith,
Jimmy S.H. Lee, Roy Zanatta, Oq-Hyun Chen
and MFC Bancorp Ltd.
OF COUNSEL:
LATHAM & WATKINS
James V. Kearney
8 8 5 Third Avenue
Suite 1000
New York, NY 10022
(212) 906-1200 September 18,200O
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5
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AMENDED AND SUPPLEMENTAL DERIVATIVE AND CLASS ACTION COMPLIANT
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EXTRACTED KEY WORDS
MFC DEFENDANTS SMITH ZANATTA PLAINTIFF AFFILIATES GIBRALT LEE ASSETS STOCK BONDS ICHOR COMPLAINT SHARES LOAN TRANSACTION PREFERRED STOCK STOCKHOLDERS CAUSED DRUMMOND PURCHASE PRICE DISCLOSURE DOCUMENTS MARKET PRICE COMMON STOCK FIDUCIARY DUTIES SUBSIDIARIES SHAREHOLDERS BANK CHARGES CERTIFICATE MFC BANCORP |
\. . ;.. I : !_%I
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
GIBRALT CAPITAL CORPORATION )
for itself, as class representative and
derivatively on behalf of ;
Drummond Financial Corporation,
a Delaware corporation, i
Plaintiff,
V. Civil Action No. 17422-NC
MICHAEL J. SMITH, JIMMY S.H.
LEE, ROY ZANATTA, OQ-HYUN
CHIN, MFC BANCORP LTD.,
Defendants,
-and-
DRUMMOND FINANCIAL
CORPORATION, a Delaware
corporation, solely as a nominal
defendimt.
AMENDED AND SUPPLEMENTAL DERIVATIVE AND CLASS ACTION
COMPLAINT AND PETITION FOR A RECEIVER
Plaintiff, Gibralt Capital Corporation ("Gibralt"), by and through its attorneys, Ashby &
Geddes, for its amended and supplemental derivative and class action complaint and petition for
a receiver, alleges the following upon knowledge, information and belief:
I. Introduction
1. This action challenges the looting and almost complete gutting of the nominal
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6
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DEFENDANTS REPLY BRIEF IN SUPPORT OF MOTION TO DISMISS THE COMPLAINT AND PETITION FOR A RECEIVER
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EXTRACTED KEY WORDS
COMPLAINT MFC DRUMMOND DEFENDANTS DELAWARE COURT DEL SMITH PLAINTIFF SUPPORT ZANATTA RECEIVER MOTION JURISDICTION BONDS DISMISS PREFERRED STOCK COMPLAINT FAILS CLASS ACTION COMPLAINT TRANSACTION FIDUCIARY DUTY PATRICIA BALL ASSERTION DISCLOSURE SHAREHOLDERS HAGUE SERVICE CONVENTION REPURCHASE THIRD AVENUE SUITE CORPORATE OPPORTUNITY |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
GIBRALT CAPITAL CORPORATION for
itself, as class representative and derivatively
on behalf of Drummond Financial Corporation,
a Delaware corporation,
Plaintiff,
V.
MICHAEL J. SMITH, JIMMY S.H. LEE, C. A. No. 17422-NC
ROY ZANATTA, OQ-HYUN CHIN, MFC
BANCORP LTD.,
Defendants,
-and-
DRUMMOND FINANCIAL
CORPORATION, a Delaware corporation,
solely as a nominal defendant.
DEFENDANTS' REPLY BRIEF IN SUPPORT OF
MOTION TO DISMISS THE VERIFIED DERIVATIVE AND
CLASS ACTION COMPLAINT AND PETITION FOR A RECEIVER
SMITH, KATZENSTEIN & FURLOW LLP
Brett D. Fallon
The Corporate Plaza
800 Delaware Avenue
P.O. Box 410
Wilmington, DE 19899
(302) 652-8400
OF COUNSEL:
LATHAM & WATKINS
James V. Kearney
Patricia Ball
885 Third Avenue
Suite 1000
New York, NY 10022
(212) 906-1200
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7
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PLAINTIFFS ANSWERING BRIEF IN OPPOSITION TO DEFENDATNS MOTION TO DISMISS
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EXTRACTED KEY WORDS
DELAWARE PLAINTIFF COURT DRUMMOND COMPLAINT MFC DELAWARE CORPORATION FACTS DEL MOTION BONDS PREFERRED STOCK DISMISS TRANSACTIONS CONTROL FIDUCIARY DUTY STOCKHOLDERS CAUSED DRUMMOND WILMINGTON AFFILIATES FIDUCIARY DUTIES DIRECTORS JURISDICTION REPURCHASE CAUSING DRUMMOND NOMINAL DEFENDANT AUTHORITIES SELF-DEALING ALLEGATIONS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY r-j :
GIBRALT CAPITAL CORPORATION, for itself, )
,
as class representative and derivatively on behalf of )
Drummond Financial Corporation, a Delaware
corporation, ; I
- ,,
_.! 17'
Plaintiff, r `2
> --
V.
i
MICHAEL J. SMITH, JIMMY S.H. LEE, >
ROY ZANATTA, OQ-HYUN CHIN, and
MFC BANCORP, LTD., ; Civil Action No. 17422
Defendants, i
and i
DRUMMOND FINANCIAL CORPORATION, t
a Delaware corporation, solely as a nominal
defendant.
PLAINTIFF'S ANSWEKING BRIEF IN OPPOSITION
TO DEFENDANTS' MOTION TO DISMISS
ASHBY & GEDDES
Stephen E. Jenkins
Richard D. Heins
One Rodney Square
P.O. Box 1150
Wilmington, DE 19899
(302) 654-I 88X
Attorneys for Plaintiff
Dated: January 12,200O
TABLE
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8
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VERIFIED DERIVATIVE AND CLASS ACTION COMPLAINT AND PETITION FOR A RECEIVER
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EXTRACTED KEY WORDS
DEFENDANTS MFC PLAINTIFF BONDS SMITH GIBRALT AFFILIATES STOCK SHARES ICHOR TRANSACTION PRICE ASSETS LOGAN MERCER CLASS ACTION COMPLAINT DIRECTORS PREFERRED STOCK STOCKHOLDERS ACCORDING PURCHASE PRICE DISCLOSURE DOCUMENTS SUBSIDIARIES FIDUCIARY DUTIES SHAREHOLDERS COMMON STOCK PROXY STATEMENT VOTING STOCK |
- CONFIDENTIAL -
Filed Under Seal Pursuant to Court Order in C.A. No. 16958
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
GIBRALT CAPITAL CORPORA.TION )
for itself, as class representative and
derivatively on behalf of
Drummond Financial Corporation,
a Delaware corporation,
Plaintiff,
>
V. > Civil Action No.
>
MICHAEL J. SMITH, JIMMY S.H. 1
LEE, ROY ZANATTA, OQ-HYUN >
CHIN, MFC BANCORP LTD., >>
Defendants, >>
-and- >>
DRUMMOND FINANCIAL )
CORPORATION, a Delaware >
corporation, solely as a nominal >
defendant. >
VERIFIED DERIVATIVE AND CLASS ACTION COMPLAINT
AND PETITION FOR A RECEIVER
Plaintiff, Gibralt Capital Corporation ("Gibralt"), by and through its attorneys,
Ashby & Geddes, for its verified derivative and class action complaint and petition for a
receiver, alleges the following upon knowledge, information and belief:
I. Introduction.
1. This action challenges the looting and almost complete gutting of the
nominal defendant, Drummond Financial Corporation ("Drummond" or the "Company"),
by the defendants, who are (1) present or former directors of Drummond and (2) a
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