arrow left
arrow right
  • Primus Pacific Partners 1, Lp v. Goldman Sachs Group, Inc., Goldman Sachs (Singapore) Pte., Tim Leissner Commercial Division document preview
  • Primus Pacific Partners 1, Lp v. Goldman Sachs Group, Inc., Goldman Sachs (Singapore) Pte., Tim Leissner Commercial Division document preview
  • Primus Pacific Partners 1, Lp v. Goldman Sachs Group, Inc., Goldman Sachs (Singapore) Pte., Tim Leissner Commercial Division document preview
  • Primus Pacific Partners 1, Lp v. Goldman Sachs Group, Inc., Goldman Sachs (Singapore) Pte., Tim Leissner Commercial Division document preview
						
                                

Preview

FILED: NEW YORK COUNTY CLERK 05/19/2020 04:51 PM INDEX NO. 653885/2016 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 05/19/2020 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. O. PETER SHERWOOD PART IAS MOTION 49EFM Justice ---------------------------------------------------------------------------------X INDEX NO. 653885/2016 PRIMUS PACIFIC PARTNERS 1, LP, MOTION DATE 12/23/2019 Plaintiff, MOTION SEQ. NO. 003 -v- GOLDMAN SACHS GROUP, INC., et al., DECISION + ORDER ON MOTION Defendants. ---------------------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 003) 195, 196, 197, 198, 199, 200, 201, 202, 203, 205, 206, 207 were read on this motion to/for RELIEF FROM JUDGMENT/AMEND . Upon the foregoing papers, it is ordered that this motion for relief from Judgment and to amend the complaint (Motion Sequence Number 003) is decided in accordance with the accompanying decision and order. 5/19/2020 $ DATE O. PETER SHERWOOD, J.S.C. CHECK ONE: X CASE DISPOSED NON-FINAL DISPOSITION GRANTED X DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE 1 of 8 FILED: NEW YORK COUNTY CLERK 05/19/2020 04:51 PM INDEX NO. 653885/2016 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 05/19/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 49 -------------------------------------------X PRIMUS PACIFIC PARTNERS 1, LP, DECISION AND ORDER Plaintiff, Index No.: 653885/2016 -against- Motion Seq. No.: 003 GOLDMAN SACHS GROUP, INC., GOLDMAN SACHS (SINGAPORE) PTE, and TIM LEISSNER, Defendants. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - -- -X O. PETER SHERWOOD, J.: Plaintiff Primus Pacific Partners 1, LP (“Primus”) moves pursuant to CPLR § 5015 for relief from this court’s November 9, 2017 Decision and Order on grounds that new evidence has been discovered enough to merit vacating that Order. In the alternative, plaintiff moves pursuant to CPLR § 3025 (b) for leave to file an amended complaint. The motion is DENIED. I. BACKGROUND Primus is a private equity firm organized under the laws of the Cayman Islands. Goldman Sachs Group, Inc (“GS Group” or “GSG”) is a global investment banking firm incorporated in Delaware and headquartered in New York with offices around the world. Goldman Sachs (Singapore) PTE (“GSS”) is a wholly owned subsidiary of GS Group organized under the laws of Singapore. Tim Leissner was co-President and Managing Director of GSS from December 2009 through September 2011. In December 2009, Hong Leong Bank (“HLB”) made an unsolicited bid to acquire EON Capital (“EON”), a publicly listed Malaysian company in which Primus was the largest shareholder. In January 2010, GSS was retained as a financial advisor to EON to evaluate and negotiate the offer. Leissner was a member of the GSS team advising EON. Based on the advice of GSS, the Board accepted the second offer in 2010. In June 2010, Primus brought a petition in the High Court of Malaysia seeking to set aside the sale of EON’s assets to HLB, alleging that the submission of the offer to shareholders for approval was rushed at the behest of certain shareholders seeking to divest their shares. The High Court dismissed the Petition. In July 2016, Primus commenced this action, prompted by press reports in March 2016 that Leissner and GSS were being investigated for misconduct in connection with their dealings with the then-Malaysian Prime Minister Najib Razak and the Malaysian state investment fund, 1 1 2 of 8 FILED: NEW YORK COUNTY CLERK 05/19/2020 04:51 PM INDEX NO. 653885/2016 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 05/19/2020 Malaysia Development Bhd. (“1MDB”). Primus alleges that GSS, while retained by EON, was an adviser to 1MDB and had a close relationship with the Malaysian Prime Minister who had close family and business ties to HLB. Primus claims that by concealing its relationship and dealings with the Prime Minister, GSS fraudulently induced EON to retain it. This court dismissed the complaint on the ground of forum non conveniens because (i) the events giving rise to the misconduct alleged in the complaint occurred in Malaysia, (ii) Primus presented no evidence that any activities relating to the EON sale occurred in New York, (iii) the majority of witnesses reside outside of New York, (iv) Malaysia had a greater interest in the transactions at issue, (v) the law of Malaysia would likely apply, and (vi) on balance, the litigation had no substantial nexus with New York. Primus now seeks relief from this judgment pursuant to newly unsealed documents from an Eastern District of New York criminal case pertaining to 1MDB. The Appellate Division affirmed (NYSCEF Doc. No. 193). The newly disclosed records include: (i) criminal information to which Leissner pleaded guilty on August 28, 2018; (ii) a criminal indictment of Roger Ng, a Managing Director of GSG, dated October 3, 2018; (iii) the transcript from Leissner’s allocution hearing dated August 28, 2018; and (iv) the sworn complaint and affidavit of an FBI agent describing the facts supporting charges against Leissner (Pl. Br. at 10 [NYSCEF Doc. No. 203]). Primus argues that Leissner pleaded guilty to critical information identifying him as an agent and employee of “U.S. Financial Institution #1,” which Primus argues is GSG, between 1998 and 2016 (Pl. Br. at 11; Pl. Aff. Ex. C [NYSCEF Doc. No. 199]). Primus argues that this admission establishes Leissner was acting as an agent for New York-based GSG at all relevant times during his work to gain favor with Prime Minister Razak, which Primus argues is “part and parcel” with the EON Capital engagement. Primus adds that the EDNY filings reveal that: (i) GSG’s scheme to curry favor with Malaysian officials began in 2009, the same year that Leissner and Ng took on the EON Capital engagement; (ii) between September 2009 and March 2011, Leissner and Ng supported several attempts to make a close friend of Razak a client of GSG because they believed that individual would work to deliver Malaysian business deals; (iii) Ng and Leissner worked to employ Razak’s children at GSB; and (iv) Leissner made payments to 1MDB officials and Razak’s family to obtain business from 1MDB and direct business to GSG (Pl. Br. at 12–13). Primus further argues that the EDNY documents reveal that Leissner and Ng coordinated a meeting in 2 3 of 8 FILED: NEW YORK COUNTY CLERK 05/19/2020 04:51 PM INDEX NO. 653885/2016 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 05/19/2020 New York to gain favor with the Prime Minister Razak. Primus argues the FBI affidavit reveals that transactions GSG engaged within Malaysia “were reviewed and approved by regional and firmwide committees at GSG,” implying the likely involvement in, and awareness of, the EON Capital Engagement of other New York-based GSG employees” (id., at 15). II. ARGUMENTS Primus argues that the newly discovered evidence provides grounds for vacating the November 2017 judgment as the evidence would not have been discoverable with due diligence and would probably have produced a different result (see Coastal Sheet Metal Corp. v RJR Mechanical, Inc., 85 AD3d 420, 421 [1st Dept 2011]; OneWest Bank FSB v Galloway, 148 AD3d 818, 819 [2d Dept 2017]; see also City of New York v OTR Media Grp., Inc., 175 AD3d 1163 [1st Dept 2019] [a court may vacate its own judgment for sufficient reason and in the interests of substantial justice]). Plaintiff argues that the facts set forth in the unsealed criminal court record clearly existed at the time of the court’s 2017 decision but were unavailable to Primus in the absence of discovery which Primus sought but was denied (Pl. Br. at 16). Plaintiff argues that the unsealed records confirm New York has a substantial nexus to Primus’s claims and is an appropriate forum for this action based on the role of employees of New York-based GSG in the matter, including relevant events that took place in New York, key witnesses who are located in New York, and New York’s interest in regulating the conduct at issue (id.). Plaintiff argues that if this motion is denied, Primus will be deprived of justice as New York is the only forum in which this lawsuit can be prosecuted against these defendants (id. at 16–17; Smith v Pataki, 150 AD3d 460 [1st Dept 2017]; Goldman v Cotter, 10 AD3d 289, 293 [1st Dept 2004]; Appalachians Ins. Co. v Gen. Elec. Co., 8 AD3d 109, 109 [1st Dept 2004]). Plaintiff further argues that the newly discovered evidence shows that New York has a substantial nexus to this action (Pl. Br. at 17). First, in dismissing Primus’s complaint, this court held that plaintiff “presents no evidence that any of the activities surrounding the EON sale occurred in New York” and that “most, if not all, of the events . . . occurred in Malaysia” but the FBI Affidavit reveals that Leissner set up a meeting to “discuss 1MDB” in New York on November 22, 2009 between the Malaysian Prime Minister and a “high-ranking executive of GSG” who was later reported to be then-GSG CEO Lloyd Blankfein. Plaintiff argues that this meeting laid the groundwork for a relationship with the Prime Minister to funnel business to GSG and that the records show that the EON Capital Engagement would have been reviewed by 3 4 of 8 FILED: NEW YORK COUNTY CLERK 05/19/2020 04:51 PM INDEX NO. 653885/2016 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 05/19/2020 numerous firm-wide committees and high-level executives at GSG in New York because it involved a “high-risk” jurisdiction. Plaintiff argues that these records confirm that employees of New York-based GSG were directly involved in the fraudulent conduct at issue. Coupled with the fact that this conduct was part of a larger scheme to benefit GSG, this establishes that New York has a substantial nexus to this action (see Reid v Ernst & Young Global, Ltd., No. 604028/2005, 2006 WL 3455259, at *3 [Sup Ct New York County 2006]; see also Hong Leong Fin. Ltd. (Singapore) v Morgan Stanley, No. 653894/2014, 2014 WL 4650238, at *5 [Sup Ct New York County 2014]; Basis Yield Alpha Fund (Master) v Goldman Sachs Group, Inc., No. 652996/2011, 2012 WL 5187653, at *5 [Sup Ct New York County 2012]). Second, plaintiff argues that the new evidence shows that there are numerous witnesses integral to Primus’s claims in New York, contrary to the court’s decision. The new information obtained from the criminal proceedings reflect that numerous key witnesses and information are available in New York that would not be available in Malaysia or Singapore, in particular Leissner and Ng who have both been extradited to New York. Plaintiff argues it would seek discovery from “high-level executives at” GSG’s headquarters in New York who participated on the firm-wide committees that would have reviewed the EON Capital Engagement. Plaintiff argues that the presence of such crucial witnesses in New York supports the conclusion that New York has a substantial nexus with this action (see Reid, 2006 WL 3455259, at *3). Finally, plaintiff argues that New York has an interest in regulating the conduct reflected by the newly discovered information. The fraudulent conduct was undertaken by employees of New York- based GSG and was approved by high level executives in New York. Such conduct implicates New York’s interest in regulating the conduct of New York-based banks operating in New York (see Licci v Lebanese Canadian Bank, Sal, 672 F3d 155, 158 [2d Cir 2012]). Plaintiff argues that, should this court not grant relief from the November 2017 decision, it should instead grant Primus leave to amend its complaint (Pl. Br. at 21–22). In opposition, defendants argue that Primus’s “new evidence” does not justify revisiting this court’s forum non conveniens dismissal as plaintiff fails to show the evidence would have produced a different result (Def. Br. at 9 [NYSCEF Doc. No. 205]; see Evergreen Bank N.A. v Dashnaw, 262 AD2d 737, 738 [3d Dept 1999]; see also Nichols v Curtis, 104 AD3d 526, 529 [1st Dept 2013]; Zaretsky v Berlin, 2011 WL 3983180, at *2 [Sup Ct Nassau County 2011]; Hunter v Hunter, 43 NYS3d 881, 883 [Sup Ct Essex County 2016]). Defendants argue that the 4 5 of 8 FILED: NEW YORK COUNTY CLERK 05/19/2020 04:51 PM INDEX NO. 653885/2016 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 05/19/2020 EDNY Filings do not establish a substantial nexus to New York because they are irrelevant to the EON Bank Transaction, failing to even mention the transaction once, and Primus assumes, without evidence, that Leissner and Ng’s efforts to ingratiate themselves with the Malaysian Prime Minister began before the EON Bank transaction (Def. Br. at 10–11). Defendants argue that plaintiff fails to make any allegation that Leissner manipulated the EON Capital transaction for the benefit of the Prime Minister or his family (id. at 11). Defendants further argue that plaintiff’s attempt to find a New York nexus in this matter is based on a mischaracterization of the EDNY filings as (i) the filings do not implicate GS Group directly but, instead, plaintiff bases its allegations on the assumption that U.S. Financial Institution #1 is GS Group when, in fact, the filings define “U.S. Financial Institution #1” to include GS Group’s affiliates; (ii) there is nothing in the EDNY filings that shows the EON Capital engagement would be reviewed in New York as the location of the firmwide committees is never identified by plaintiff or the EDNY filings; and (iii) Judge Brodie’s statement during Leissner’s plea hearing that “most of the conduct took place in [SDNY]” is made in the context of the 1MDB matter, having no relation to the EON engagement (Def. Br. at 11–13). Defendants argue that, even if the EDNY filings were found to be relevant here, it would not matter as the action remains fundamentally about alleged misconduct in Asia and Primus still does not allege that it or EON had any dealings with GS Group or its employees in New York (id. at 14; see Rakuten Bank, Ltd. v Royal Bank of Canada, 136 AD3d 481, 481 [1st Dept 2016]). Defendants also argue that the EDNY filings “underscore” that New York is not an appropriate forum for this litigation as Malaysia has a greater interest than New York in a matter regarding Malaysian banks and nothing in the EDNY filings alters that conclusion (Def. Br. at 16–17; see Bluewaters Commc’ns Holdings, LLC v Ecclestone, 2014 WL 220779, at *14 [Sup Ct New York County 2014]; Fin. & Trading Ltd. v Rhodia S.A., 28 AD3d 346, 347 [1st Dept 2006]; see also Mashreqbank PSC v Ahmed Hamad Al Gosaibi & Bros. Co., 23 NY3d 129, 137 [2014]). Defendants further argue that, the EDNY filings notwithstanding, the remaining forum non conveniens factors still weigh in favor of dismissal, including: (i) the applicability of Malaysian, or possibly Singaporean, law in this matter, (ii) the potential availability of Malaysia or Singapore as an alternative forum, and (iii) the availability of most witnesses outside of New York (Def. Br. at 17–19; Decision and Order, at 12–13, 15–16 [NYSCEF Doc. No. 156]). To the 5 6 of 8 FILED: NEW YORK COUNTY CLERK 05/19/2020 04:51 PM INDEX NO. 653885/2016 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 05/19/2020 third point, defendants note that Leissner and Ng are the only witnesses involved in the EON Capital engagement who plaintiff claims are in the United States (Def. Br. at 18; Pl. Br. at 19). Finally, defendants argue that plaintiff’s proposed amended complaint is improper and futile (Def. Br. at 19). They argue that plaintiff cites no authority allowing it to seek amendment as a vehicle to challenge the basis of a judgment. The outcome of plaintiff’s motion to amend should turn on whether it has met the standard applicable to motions for relief from judgment (see Washington v State, 188 Misc2d 155, 157 [New York Ct Cl 2001] [finding a motion styled as a motion to amend fell “under the aegis of CPLR 5015 (a)” governing motions for relief from judgment]). Defendants argue that even if plaintiff’s request to amend were proper, the proposed amendment cannot survive a motion to dismiss because “none of the defects [that led to dismissal] are cured by the proposed amended complaint” (Scott v Bell Atl. Corp., 282 AD2d 180, 186 [1st Dept 2001]; Meimeteas v Carter Ledyard & Milburn LLP, 105 AD3d 643, 643 [1st Dept 2013]). III. DISCUSSION CPLR § 5015 (a)(2) provides, a “court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of newly discovered evidence which, if introduced at the trial, would probably have produced a different result and which could not have been discovered in time to move for a new trial . . .”. Here, plaintiff has failed to show that the proffered newly discovered evidence would have produced a different result. Nothing in the EDNY filings mentions or relates to the EON Capital Engagement which is at the heart of this matter; instead, the EDNY case concerns 1MDB. While plaintiff argues that it has alleged that the EON Capital Engagement was part of the 1MDB scheme due to its “temporal and substantive connection” to the parties, it has failed to show how the EDNY filings would have substantively changed the circumstances leading to this court’s decision. Instead it argues that its allegations should be sufficient at this stage without the benefit of discovery. However, nothing in the EDNY filings has changed the principal reasons this court dismissed the complaint—the events giving rise to this matter primarily occurred in Asia, the majority of witnesses reside outside of New York, Malaysia has a greater interest in this matter, and Malaysian law would likely apply. 6 7 of 8 FILED: NEW YORK COUNTY CLERK 05/19/2020 04:51 PM INDEX NO. 653885/2016 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 05/19/2020 Although plaintiff argues that firmwide committees would have reviewed GSG’s conduct in Malaysia, numerous witnesses integral to the claims are in New York, and New York has an interest in regulating the conduct reflected by the newly discovered information undertaken by employees of New York-based GSG, none of these arguments bear fruit. As defendants note, the “committees” revealed by the EDNY filings were not reviewing the EON Capital Engagement, but instead the 1MDB transactions, and nothing suggests that these committees “directly involved employees of New York-based GSG including high level executives based in New York.” Further, plaintiff fails to name any witnesses that may now be available in New York aside from Roger Ng and Tim Leissner. Finally, as stated in this court’s prior decision, while New York’s interest in the integrity of its banks is compelling, New York’s interest is “in protecting the banking system as a whole, rather than individual investors” (NWG Invs. Inc. v Fronteer Gold, Inc., 40 Misc3d 1230[A], at *6 [2013]) and in “regulating the conduct of New York-based banks operating in New York” (Licci v Lebanese Canadian Bank, SAL, 672 F3d 155, 158 [2d Cir 2012]). No “systematic compelling interest” is triggered by the alleged fraud arising from a transaction between two foreign banks occurring outside of New York (see Mashreqbank PSC, 23 NY3d at 137). Consequently, the motion for relief from judgment must be DENIED. Similarly, plaintiff’s motion to amend its complaint is DENIED, as the proposed amended complaint realleges the same causes of action as the original complaint and the proposed factual amendments are based solely on the newly discovered EDNY filings which, as discussed above, do not substantively change the posture of this matter or the court’s previous decision. This constitutes the decision and order of the court. DATED: May 19, 2020 E N T E R, O. PETER SHERWOOD J.S.C. 7 8 of 8