Motion for Summary Judgment in Sang Cheol Woo v. Charles C. Spackman| Trellis.Law

On May 23, 2017 a Motion-Secondary was filed involving a dispute between Sang Cheol Woo, and Charles C. Spackman, for Commercial Division in the District Court of New York County.

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FILED: NEW YORK COUNTY CLERK 05/23/2017 03:07 PM INDEX NO. 652795/2017
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

SANG C HEOL WOO,

Plaintiff,

v. Index No. _ _ _ _ _ __

CHARLES C. SPACKMAN,

Defendant.

DECLARATION OF JOHN HAN IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT IN LIEU OF COMPLAINT

I, John Han, declare pursuant to 28 U.S.C. § 1746 as follows :

I. I am an attorney adm itted to practice law in the State of New York. [practice

with Kobre & Kim LLP , 800 Third Avenue, New York, New York 10022, attorneys for Plaintiff

Sang Cheo l Woo.

2. I submit th isdeclaration in support of Plaintiffs Motion for Summary Judgment

in Lieu of Comp laint under New York Civil Practice Law and Ru les ("C PLR") §§ 3213 and

5303 seek ing recognition of a final and enforceab le money judgment entered in the Republic of

Korea ("South Korea") in favor of Mr. Woo against Charl es C. Spackman (also known by his

Korean name " Yoo Shin Choi") ("Spackman").

Nature of the Action

3. On September 29,2011 , the Seou l High Court (29th Civi l Department) entered a

money judgment in favor of Mr. Woo, a citizen of Korea, against Spackman, a cit izen of the

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United States and permanent resi dent of Hong Kong, along with four other defendants jointly

and severall y for Korean Won (" KRW" ) 5,207 ,884,800 plus interest (at 5% from June 5, 20 11,

through September 29, 20 11 , and 20% thereafter) (the " Korean Jud gment"). See Notari zed and

Aposti lled Opinion of the Seoul High Court (29th C ivi l Department), dated September 29, 20 11 ,

and certified English tran slation (the " High Court Op ."), attached as Exhibit 1 at 2. A llcitations

to the High Court Op. herein cite to the certified Engli sh translation.

4. On October 13, 2013, the Supreme Court of Korea affirmed the Korean Jud gment

aga inst Spackman. See Notarized and Aposti lled Jud gment of the Supreme Court of Korea,

dated October 3 1, 2013 and certified Engli sh translation, attached as Exhibit 2. The Korean

Jud gment is su bj ectto no further avenues of appeal and is complete ly final, conclusive, and

enfo rceabl e und er Korean law. See Declarat ion of Jaewoo Kwak (" Kwak Decl.") dated May 16,

20 17, attached as Exhibit 3 at ~~ 12-13 .

5. To date, none of the Korean Jud gment has been paid. As of May 23, 2017 , the

value of the Korean Jud gment is equivalent to US $ 13,285, I 02.77. The interest rate calcu lations

for the Korean Judgment are set forth in Exhibit 4.

Spackman is Criminally Investigated for Defrauding Investors in Korea

6. In 2000 , Mr. Woo became a minority shareholder in Littauer Technologies Co . Ltd.

("Littauer"), a company founded, majority-owned, and controlled by Spackman. Less than one year

later, Littauer would be " practically dissolved" and its shares would become virtually worthl ess.

See High Court Op . at 23 .

7. Soon after Mr. Woo invested in Littauer, Spackman and hi s business partners

caused Littauer to enter into a merger transaction with a company "establi shed under [their]

careful discussions and co nspi racy. " See id. at 13, 23. He caused Littauer to acquire the

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company for - US $ 1.3 billion in newly issued Littauer stock. See id. at 18-19. According to a

brief later filed by Mr. Woo, it was later revealed that the other company had no sales,

empl oyees, or offices and was in sum and substance only a paper company whose true economic

va lue was only - US $2. 1 million. See Appellate Bri ef filed by Sang Cheo l Woo in the Seoul

High Court dated February 12, 2009, and Eng li sh translation, attached as Exhibit 5 at 5043,

5049-5051 (original pagin ation).

8. The econom ic effect of the transaction was that value was transferred from

Littauer' s shareholders to Spackman and hi s bu siness partners. See High Court Op. at 24. After

the transaction was completed , Spackman liquidated - 11.5% of the total outstandin g shares in

Littauer in just three days, collecting a profit of more than - US $ 100 million. Hi s business

partners earned - US $44 million in profits from additional sales. See id.at 2 1-22. As a result of

the sa les, Littauer recorded a loss of approximately US $1 .2 billion (approximately 60 percent of

its market va lue at the time). The share price eventually dropped to 0.8 % of its max imum traded

value before Littauer was delisted from KOSDAQ. See id. at 21 .

9. In the aftermath of Littauer' s collapse, the Korean Financial Superviso ry Service

and Public Pro secutor's Offices both opened invest igations into Spackman. Spackman "fled to

Hong Kong" before he cou ld be questioned by the authorities. See id. at 19. One of Spackman's two

business partners in Littauer was detained and charged with crim inal offenses. See id. The other

business partner was co nvicted less than one year later of embezzlement, related to a sim ilar

transaction, and sentenced to three years impri sonment. See id. at 6. Because Spackman had

fled to Hong Kong, the Korean crimina l authorit ies were not abl e to gather evidence from him.

As a result, they ultimate ly concluded the case with a c riminal fine again st him for violating the

" Korean Act on the Aggravated Puni shment, etc. of Spec ific Econom ic Crim e." See id. at 19-21.

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A source from th e Korean Public Prosecutors' Offi ce described Spackman and hi s busin ess

partners as "offend ers of serious crimes" and sai d that the Publ ic Prosecutors' Office viewed

Spackman as th e "principal" offender and hi s bu sin ess partner as an "accomplice to the crime."

See Liltauer Technologies Siphons OJJ$19.6 Billion: Punishment to BeginfOl· Alleged 'Crimes '

from Loophole in System , SE Daily, dated March 25 , 20 I I, and certifi ed English translation,

attached as Ex hibit 6.

M r. Woo Sues Spackman in Korea and Obtains the Judgment

10. In 2003, Mr. Woo sued Spackman and nine other defendants in the Seoul Central

District Court (25th Division) in South Korea (the "Seoul Distri ct Court") for his losses resulting

from Littauer' s co mpl ete destruction. The Seoul Distri ct Court ini tiallydeni ed Mr. Woo's

claims. However, in 20 11 , the Seoul Hi gh Court reversed the decision of the Seoul District

Court and entered judgment aga inst Spackman (and the other defendants joi ntly and severall y)

fo r an amount equ ivalent to - US $4.5 milli on. See Hi gh Court Op. at 2. The court concluded

that the defendants had engaged in "an expedient fin ancial scheme ak in to a fraudul ent payment. "

See id. at 24. The Co urt held th at Spackman in parti cular was "deemed to have made admi ss ions"

to the allegat ions made in the compl aint because he had fa iled to appear even though he had been

personall y served with process. See id. at 8.

11 . Spackman fi led an appea l to the Supreme Court of Korea, which affi rmed the

judgment aga inst him on October 13, 20 13. See Exhibit 2. The Seo ul High Court issued the

Korean Jud gment with an " Execution Clause" on March 3 1, 2016. See Exhi bit I. The Korean

Judgment is subject to no further avenues of appea l and is fi nal ,concl usive, and enforceable

und er Article 498 of Korean Civil Procedure Act and Article 24 of the Korean Civil Executi on

Act. See Kwak Dec l. ~~ 12-1 3.

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12. Spackman has not paid any of the Korean Judgment. As of May 23, 2017, the

value of the judgment w ith interest is equivalent to US $13 ,285 ,102.77.

Personal and Subject Mater Jurisdiction of the Korean Court

13. The Seoul District Court and the Seou l High Court had persona l and subject

matter jurisdiction over Spackman and the case. Under Artic le 2(1) of the Korean Act on Private

International Law, both courts had jurisdiction over parties and disputes "substantively related "

to Korea. See Kwak Decl. at~ 6. In the Korean litigation, Spackman and the claim brought by

Mr. Woo were both centered in Korea. Spackman conducted the all eged stock manipulation in

Korea and Mr. Woo was injured by Spackman 's conduct in Korea. Further, Mr. Woo personally

served Spackman with the Complaint at the Seoul District Court level on July 28 , 2008 , and w ith

the Petition of Appeal at the Seou l High Court level on April 2 1, 20 11. In both in stances,

personal service was made by the Ass istant Bailiff of the High Court of Hong Kong under the

Convention on the Service Abroad of Judicial and Extrajudicia l Documents in Civil or

Commercial Matters (the " Hague Convention"). See Affirmation of Service dated August 26,

2008, attached as Exhibit 7; Affirmati on of Serv ice dated April 2 1, 20 11 , attached as Exhibit 8.

Service under th e Hague Convention is legally valid under Art icle 191 of the Korean Civil

Procedure Act. See Kwak Decl. ~ 8. Consequently, the Korean courts had persona l jurisdiction

over Spackman when the Korean Judgment was rendered. See id. at ~~ 6-8.

14. The Seou l Di strict Court and the Seou l High Court also had subject matter

jurisd iction over the action under Korean law. Article 750 of the Korean Civi l Law grants the

Seoul District Court jurisdiction to hear cases invo lving " genera l torts. " See id. at ~ 9. A

" general tort" is defined as a claim where a person has " cause[d] losses []or inflict[ed] injuries

on another person by an unlawful act, intentionally or negligentl y." Id. In the Korean litigation,

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Spackman allegedly caused Mr. Woo loss by committing securiti es fraud and stock manipulation.

Thus, Mr. Woo's claim was for "general tort" and properly brought before the Seoul District

Court. See id. The Seoul High Court had valid appellate jurisdiction to review the decision of

the Seoul District Court. Article 32( 1)(b) of the Korean Court Organization Act and Article 2 of

the Korean Rules on the Jurisdiction of Subj ect Matter in Civil and Family Litigation grants the

Seoul High Court jurisdiction to hear appea ls from the Seoul Di strict Court involv ing more than

KRW 100 million in controversy. See id. The claim in this case was for more than KRW 5

billion. See High Court Op. at 8.

15. Finally, the Seoul District Court was the proper venue to bring the case in the first

instance. Under Article 6 of the Korean Rules of C ivi lProcedure, cases involving defendants

who do not maintain a "general forum ," "domicile," or "residence" in Korea may be brought

"where the Supreme Court of Korea is located." See Kwak Decl. ~~ 10-11 . The Supreme Court

of Korea is located in Seoul. See id. Spackman did not reside in Korea during the relevant

times. See High Cou rt Op. at I, 19. Thus, the action was properly brought in the District COllIt

in Seoul.

Spackman Takes Steps to Evade Enforcement of the Korean Judgment

16. In September 2016, Mr. Woo filed an action in Hong Kong, where Spackman

lives, to enforce the Korean Judgment. See Amended Writ of Summons and Statement of Claim

dated Septembe r 22 , 2016, attached as Exhibit 9. That action is currently pending. On

September 28 , 2016, Mr. Woo attempted to serve Spackman with the summons in the Hong

Kong action in hi soffice in Hong Kong. Spackman was not at his office but the service agent

spoke w ith Spackman ' s assistant and said that he would return the next day. See Declaration of

Cheng Wai Leung dated May 18, 2017 , attached as Exhibit 10. On September 29, 2016 ,

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Spackman fil edpapers w ith the Hong Kong Company Registry changi ng his registered address

as a director of every Hong Kong company he served as a director for from his home in Hong Kong

to an add ress in Cambridge, Massach usetts. See Forms ND2B ("Notice of Change in Particulars

of Company Secretary and Director") filed with the Companies Registry of Hong Kong,

effective on September 29, 20 16, for Spackman Entertainment Group (HK) Limited, Spackman

Equities Limited, and Spackman Media Group Limited , attached as Ex hibit 1l.

17. In February 20 17, Mr. Woo brought an app lication before the United States

District Court for the District of Massach usetts (the " District of Massachusetts") to take third

party discovery for use in the Hong Kong enforcement act ion. On February 2 1, 20 17, the

District of Massachusetts granted the appl icat ion. See Order, In re: Application of Sang Cheol

Woo for Order Under 28 Us.e. § 1782 to Take DiscovelY, Case No. 1:1 7-mc-910 36 (Feb. 21,

2017) attached as Exhibit 12. On March 2, 20 16, The New York Times published an article about

the U.S . discovery action titled "Harvard Ordered to Reveal Financial Records of Influential Donor."

The article said that "Mr. Spackman, a Hong Kong-based businessman, leads the Spackman Group, a

global investment holding company with $1.5 billion under management." See Harvard Ordered to

Reveal Financial Records ofInfluential Donor, The New York Times, dated March 2, 20 17, attached

as Exhibit 13. The very same day, Spackman resigned as a director of every Hong Kong company

he served as a director for. See Forms ND2A ("Notice of Change of Company Secretary and

D irecto r (A ppointment/Cessation)") filed with the Companies Registry of Hong Kong (effective

on Mar. 3, 2017) for Spackman Entertainment Group (HK) Limited , Spackman Equities Limited,

and Spackman Media Group Limited attached as Exhibit 14.

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Spackman Continues to be an Immensely Wealthy Businessman

18. Spackman currently controls at least 13 compan ies bearing the "S packman" brand.

Spackman founded and serves as Chairman and/or CEO of many of the fo llowing companies

bearing his name: Hong Kong : Spackman Group Lim ited; Spackman Entertainment Group

(HK) Limited; Spackman Med ia Group Limited; Spackman Equities Limited ; Spackman

Investment Corpo ration Lim ited ; Spackman Capital Group Limited. Bermuda: Spackman

Group Lim ited . Canada : Spackman Equities G roup Inc. Singapore: Spackman Enterta inm ent

Group Limited ; Spackman Enterta inment Group Pte. Limited. Korea: Spackman Entertainment

Korea In c. ;
Spackman Media Korea ; Spackman Associates Company Limited. The compan ies

incl ude two public companies listed on the Toronto and Singapore Stock Exchanges wOl1h a

combined market valuation of -US $50 million ; an investment company with - US $1.5 billi on under

management and a major entertai nment company that has produced worldwide blockbuster films

such as Snowpiercer-starring Academy Award winners T ilda Swinton and Octavia Spencer-and

The Manfrom Nowhere, one of the highest gross ing film s in Korean hi story. See Bloomberg quotes

for Spackman Equities Group and Spackman Entertainment Group, available at

https://www.b loombe rg.col11/guote/SQG :CN and https://www.bloomberg.com/guote/SEG:SP

(last accessed May 23, 2017), attached as Exhibit 15; Spackman Group Homepage, available at

http ://spackmangroup.com/ (last accessed on May 23 , 20 17), attached as Exhibit 16; Spackman

Entertai nment Gro up Past Releases webpage, avai lab le at

http ://www.s packmanenterta in mentgroup.com/past-re leases.html(last accessed on May 23,

2017) , attached as Exh ibit 17.

19. Spackman lives in an estate located in what Forbes magazine described as the

"wealthiest neighborhood on earth," which is home to "[Hong Kong's] richest residents, with an

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aggregate net worth of -US $123 billion." See The Wealthiest Neighborhood on Earth: Deep Wafer

Bay, Forbes Magazine, dated July 29, 20 IS , attached as Exhibit 18.

Spackman Plans Another Initial Public Offering

20. Spackman is planning an initialpubli c offering ("I PO") of another company that he

founded after Littauer called Spackman Media Group (the " IPO Company"). On August 24, 20 IS ,

the IPO Company announced that it intends to apply for listing on the Hong Kong Stock Exchange.

See Spackman Media ropes KG! for proposed HK listing, The Business Times, dated August 24,

20 IS , attached as Exhibit 19.

21. The same two BVI-registered entities that controlled Littauer (the company involved

in the Korean criminal fraud investigation) in 2000 changed their names approximately three years

later and now control the IPO Company. Littauer was owned by "Littauer Strategics" and "PML

Associates" (through a company called "Consolidated Science Corp. Ltd."). See Hong Kong Stock

Exchange Oiscloseable Transaction Form, dated October 7, 2003, attached as Exhibit 20 at 5-6.

Spackman incorporated Littauer Strategics in May 2008. See High Court Op. at 3. Ninety-nine

percent of PML Associates was owned by an individual named Chan Sio Peng. See Exhibit 8 at 6.

In 2003 , Littauer Strategics was renamed "OVG Limited." See Certificate of Incorporation for OVG

Limited , attached as Exhibit 21. In 2004, PML Associates was renamed "G O Enterprise Holdings

Ltd." See Certificate of Incorporation for GO Enterprise Holdings Ltd ., attached as Exhibit 22. As

of October 13,20 16, OVG Limited owned 2,783,333 shares of the IPO Company and GO Enterpri se

Holdings Ltd. owned 8,533,850 shares of the IPO Company. See Form NAR I ("Annua l Return")

for Spackman Med ia Group dated October 13, 20 16, attached as Exhibit 23 at 114-1 IS, 117 .

22. The [PO Company and Spackman Entertainment Group (another company

Spackman formed) have entered into transactions that have boosted the implied valuation of

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Spackman Media Group nearly ten times in approximately one year. In December 20 IS , the two

companies entered into a share swap that valued the IPO Company at - US $0.33 per share. See

Spackman Entertainment Group Proposed Share Swap, dated December 30, 20 IS , attached as

Exhibit 24 at 1,7 (exchanging 7.5 million shares of the IPO Company for shares valued at US $2.48

million) . In March 2017, the same two companies entered into Share Purchase Agreement that

valued the IPO Company at -US $3.00 per share. See Spackman Entertainment Group Share Sa le

and Purchase Agreement, dated March 2, 2017, attached as Exhibit 25 at I (purchasing I million

shares of the IPO Company at US $3 per share). The March 2017 share purchase announcement

stated that the va luation was based on the fact that "the Company has previousl y on 24 August 20 IS

announced a proposed li stin g ...
on The Stock Exchange of Hong Kong ... " See id.at 4.

23. One investor who invested - US $13,000 in the IPO Company will see a return of

more than US $29 million in less than two years. On October 15,20 IS , GO Enterprise Holdings Ltd .

(the company formerly known as Littauer Strategics) invested -US $13,000 into a company called

Crystal Planet Limited. See Form NSC I (" Return of Allotment") for Crystal Planet Limited

attached as Exhibit 26 at 73 , 75-76 (purchas ing 9,999,999 shares for - US $13,000). On

November 30, 20 IS , Crystal Planet shareholders became shareholders of the IPO Company

through a one-to-one stock swap. See Form NSC I, (" Return of Allotment") for Spackman

Media Group attached as Exhibit 27 at 26. In March 2017, GD Enterprise Holdings Ltd. ' s

shares in the IPO Co mpan y, purchased for - US $ 13 ,000, were valued at -US $29 million. See

Exhibit 25 at I (valuing each share of Spacklllan Media Group at US $3.00).

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24 . I declare under penalty of perjury the foregoing is true and correct.

Executed : May 23, 2017
New York, New York

By: _df:~1ib:..,..v-1_
John Han

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Motion-Secondary: Sang Cheol Woo v. Charles C. Spackman

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