Motion for Writ in Kevin X Lu v. Cheer Holding, Inc. (f/k/a Glory Star New Media Group Holdings Limited)| Trellis.Law

On December 18, 2023 a Exhibit,Appendix was filed involving a dispute between Kevin X Lu, and Cheer Holding, Inc., for Commercial - Other (shareholder direct claim) in the District Court of New York County.

Preview
iD: YORK OUN PK 74d DM INDEX NO. 656345/2023
NYSCEF BOC. NO. 4 RECEIVED NYSCEF: 01/22/2024

Exhibit 1
INDEX NO. 656345/2023
NYSCEF BOC. NO. 4 ADRECPE GED NYSCEF: 01/22/2024

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

KEVIN. X. LU,
Civil Action No.:
Plaintiff,

~against- DEFENDANT CHEER HOLDING INC’S
NOTICE OF REMOVAL TO FEDERAL
CHEER HOLDING, INC. (f/k/a Glory Star COURT
New Media Group Holdings Limited),

Defendant.

TO: ‘THE HONORABLE JUDGES OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK:

Defendant Cheer Holding, Inc. (“Defendant’ or “Cheer Holding’), pursuantto 28 U.S.C.

§§ 1332, 1441(b), and 1446 and Local Civil Rule 81.1 of the Local Rules of United States District

Courts for the Southem and Eastem Districts of New York, and without waiver of any defenses

and objections, hereby removes this action, originally commenced in the Supreme Court of New

York County, State of New York, Number 656345/2023, to the United States District Court for

the Southem District of New
Y ork, on the following grounds:

I COMMENCEMENT OF THE ACTION

1 On December 18, 2023, Plaintiff Kevin X. Lu (“Plaintiff’ or “Mr. Lu’) filed a

complaint against Defendant in the Supreme Court of New
Y ork County, State of New
Y ork (the

“State Court’) which bears index number 656345/2023. A true and correct copy of Mr. Lu’s

Complaint is attached to this Notice as ExhibitA.

2. Mr. Lu purportedly served the Complaint and summons on Defendant in the

Cayman Islands on December 21, 2023. A true and correct copy of Mr. Lu’s affidavit of service

is annexed hereto as Exhibit B.
INDEX NO. 656345/2023
NYSCEF BOC. NO. 4 ADRECPEGED NYSCEF: 01/22/2024

3. Consistent with 28 U.S.C. § 1446, this diversity action is being removed within 30

days of claimed service of processon Defendant and within one year of the commencement of the

State Court action.

4. Venue is proper in this Court because the United States District Court for the

Southem of New
Y ork includes the place, i.e., the County of New
Y ork, in which
the State Court

actionis pending. See 28 U.S.C. § 1441(a); 28 U.S.C. § 112(b).

I THE JURISDICTIONAL REQUIREMENTS FOR REMOVAL ARE SATISFIED.

5. Removal is proper because pursuantto 28 U.S.C. § 1441(b) this Court has original

subject matter jurisdiction over this action on the basis that diversity of citizenship exists between

the parties and the amount in controversy exceeds the sum of $75,000, exclusive of interest and

costs. See 28 U.S.C. § 1332(a)(2).

A. Complete Diversity of Citizenship
Exists.

6. Cheer Holding is informed and believes that at all relevant times, Plaintiff was and

is acitizen of the State of Califomia and a citizen of the United States of America.

7. Plaintiff lists a Califomia residential address in the Complaint: 2361 Brandini

Drive. Dublin, Califomia. Public records show that Plaintiff purchased this property in or around

2012 and has been residing there ever since. Public records further show that Plaintiff was issued

a U.S. Social Security Number in Wisconsin in the early 1990's. According to public records,

Plaintiff resided in various locations in the United States from that time until settling down in

Dublin, Califomia. Therefore, upon information
and belief, Mr. Luis
a citizen of the United States

and a citizen of Califomia.

8. Cheer Holding is incorporated in the Cayman Islands and headquartered in the

Peoples’ Republic of China. See Exhibit A, 411.
INDEX NO. 656345/2023
NYSCEF BOC. NO. 4 AORECPEGED NYSCEF: 01/22/2024

9. Pursuant to 28 U.S.C. § 1332(c), “a corporation shall be deemed to be a citizen of

every . . . foreign state by which it has been incorporated and of the . . . foreign
state where it has

its principal place of business.” For the purposes of federal diversity jurisdiction, Cheer Holding

is therefore both a citizen of the Cayman Islands and a citizen of the People’s Republic of China.

Cheer Holding is not a citizen of the United States or any state of the United States.

10. Therefore, there is complete diversity of citizenship between the parties to this

action because it is an action between a United States and Califomia Citizen (Mr. Lu) anda foreign

citizen (Cheer Holding). See 28 U.S.C. § 1332(a)(2) (providing that a district court shall have

original subject matter jurisdiction over a case between a foreign citizen and a citizen of a state in

the United States). As a result, this action may be removedto this Court pursuant to 28 U.S.C. §

1441.

B ‘The Amount in Controversy
Exceeds $73,000.

11. Tt appears
that Mr. Lu is a serial litigant
in both the United States and the Cayman

Islands. Mr. Lu, a purported shareholder of Cheer Holding, alleges in his Complaint that the

purported misconduct of Cheer Holding and others led to shareholder value destruction of $100

million. See Exhibit A, 139. In addition, Mr. Lu claims that under the proposed going-private

transaction as alleged in the Complaint, each share of Cheer Holding common stock would be

entitled to a payment of $1.27 upon the consummation of that transaction. Id. at 29. Mr. Lu

further claims that he owned 405,003 shares of Cheer Holding common stock. Id. at 110. As also

alleged
in the Complaint, the transaction
was not completed
due to the purported misconduct of

Defendant and others, and Cheer Holding shareholders did not receive any payment on account of

the going private transaction. Id. at 39. Mr. Lu also alleges that the improper termination of the
INDEX NO. 656345/2023
NYSCEF BOC. NO. 4 AOGRAPE RED NYSCEF: 01/22/2024

going: private transaction resulted in the payment of a fee of $1.05 million. Id Mr. Lu further

alleges that there was apost-termination “shareholder dilution campaign.” Id. at 142.

12. Accordingly, through Plaintiff’ s own assertions, there is areasonable and good faith

basis to conclude that Mr. Lu is asserting damages that are in excess of $75,000.00, exclusive of

interest, costs, and fees.

13. Based on the foregoing, while Defendant vigorously denies liability to Mr. Lu and

expressly reserves the right to assert any and all available defenses, the amount in controversyof

this litigation exceeds the jurisdictional threshold of $75,000.

Il. THE PROCEDURAL REQUIREMENTS FOR REMOVAL ARE SATISFIED.

14. Pursuant to 28 U.S.C. §1446(b), a Notice of Removal shall be filed in a federal

district court within thirty days after receipt by defendant, by service or otherwise, of a pleading

from which federal jurisdiction
may be ascertained. The date of service is excluded
from the date

computation. See F.R.C.P 6(a)(1)(A). Here, Plaintiff allegedly served his Complaint on Defendant

in the Cayman Islands on December 21, 2023. See Exhibit B. Because January 20, 2024 (the date

that is 30 days after the claimed service or process) fell on a Saturday, the deadline
to effectuate

removal is the next business day, January 22, 2024. See FR.C.P 6(a)(1)(C). Ritchie Capital

Mgnt, LLC v. GE Capital Corp., 87 F. Supp. 3d 463, 465 n.2 (S.D.N-Y. 2015) (when 30-day

deadline for removal was on a Saturday, it was automatically extended to following Monday).

Therefore, this Notice of Removal is timely filed within the meaning of 28 U.S.C. §1446(b).

15. Pursuantto 28 U.S.C. §1446(a), a copy of all process, pleadings, orders and other

documents on the docket of the State Court are attached hereto.

16. Tn accordance with 28 U.S.C. §1446(d), Cheer Holding will promptly file a copy

of this Notice of Removal with the State Court and serve a copy of the same on Mr. Lu.
INDEX NO. 656345/2023
NYSCEF BOC. NO. 4 AORECPEGED NYSCEF: 01/22/2024

17. Cheer Holding reserves any and all rights to assert any and all defenses and

objections, including the defenses of lack of personal jurisdiction and forum non conveniens.

18. Cheer Holding further reserves the right to amend or supplement this Notice of

Removal.

19. If any question arises as to the propriety of the removal of this action, Cheer

Holding respectfully requests the opportunity to present a brief and oral argument
in support of its

position that this case is removable.

WHEREFORE, Defendant Cheer Holding Inc. prays that this action
be removed from the

Supreme Court of the State of New
Y ork, County of New
Y ork, to the United States District Court

for the Southem District of New
Y ork.

Dated: New Y ork, New York
January 22, 2024

LEWIS BRISBOIS BISGAARD & SMITH LLP

ly lin nal
Wang, Esq,
3.
l CE
=

77 Water Street, Suite
New York, NY 10005
646-989-942,
Attomeys for Defendant CHEER HOLDING, INC.
INDEX NO. 656345/2023
NYSCEF BOC. NO. 4 AGREEGED NYSCEF: 01/22/2024

CERTIFICATE OF SERVICE

I hereby certify that on January 22, 2024, the NOTICE OF REMOVAL was served via
electronic mail and first class mail upon the following parties and participants:

Mr. KevinX. Lu
2361 Brandini Dr.
Dublin, CA 94568
klu@chicagobooth.edu

Pursuant to U.S.C. § 1746(2), I declare under penalty of perjury that the foregoing is true
and correct.

Dated: New Y ork, New York
January 22, 2024

} Wn
VA

i
Minyao Wang, Esq
FILED: NEW YORK COUNTY K_01722 24.0334 INDEX NO. 656345/2023
IYSCEF DOC. NO. 4 Pagedeolen NYSCEF: 01/22/2024
JS 44C/SDNY
REV.
CIVIL COVER SHEET
10/01/2020 The JS-44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or
other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the
United States in September 1974, is required for use of the Clerk of Court for the purpose of initiating the civil docket sheet.

PLAINTIFFS DEFENDANTS
KEVIN X. LU CHEER HOLDING, INC. (f/k/a Glory Star New Media Group Holdings Limited

ATTORNEYS (FIRM NAME, ADDRESS, AND TELEPHONE NUMBER ATTORNEYS (IF KNOWN)
Pro Se Kevin X, Lu LEWIS BRISBOIS BISGAARD & SMITH LLP, by Minyao Wang
2361 Brandini Dr. 77 Water Street, Suite 2100
Dublin, CA 9468 New York. NY 10005
CAUSE OF ACTION (CITE THE U.S, CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE A BRIEF STATEMENT OF CAUSB
(DO NOT CITE JURISDICTIONAL STATUTES UNLESS DIVERSITY)

Judge Previously Assigned
Has this action, case, or proceeding, or one essentiallythe same been previously filed in SDNY at any time? No| yes]
If yes, was this case Vol.["] Invol. [] Dismissed. No[-] Yes [[] _Ifyes, give date & Case No.

IS THIS AN INTERNATIONAL ARBITRATION CASE? No [x] Yes [J
(PLACE AN [x] IN ONE BOX ONLY) NATURE OF SUIT
TORTS ACTIONS UNDER STATUTES

CONTRACT PERSONAL INJURY SONAL INJURY. FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES
[]367 HEALTACAR:
1) 110 INSURANCE, [1310 AIRPLANE PHARMACEUTICAL PERSONAL | } 625 DRUG RELATED [1422 APPEAL [1375 FALSE CLAIMS
[J120 MARI [1318 AIRPLANE PRODUCT INJURY/PRODUCT LIABILITY SEIZURE OF PROPERTY 2B USC 158 11376 QUITAM
(1130 MILLER ACT [1965 PERSONAL INJURY 11423 WITHORAWAL [ 1400 STATE
1} 140 NEGOTIABLE
INSTRUMENT
(120 ASSAULT,
LBEL 8 PRODUCT LIABILITY 21 USC 881
1890 OTHER 2B USC 157 REAPPORTIONMENT,
11150 [1368 ASBESTOS PERSONAL [] 410 ANTITRUST
RECOVERY OF [1990 FEDERAL INJURY PRODUCT |] 430 BANKS & BANKING
OVERPAYMENT & EMPLOYERS’ LABILITY PROPERTY RIGHTS [ 1450 COMMERCE,
ENFORCEMENT LIABILITY | ]480 DEPORTATION
OF JUDGMENT [1340 MARI PERSONAL PROPERTY { ]820 COPYRIGHTS [ 1880 DEFEND TRADE SECRETS ACT 1 1470 RACKETEER INFLU-
(1181 MEDICARE ACT [1345 MARINE PRODUCT [1830 PaTt ENCED & CORRUPT
[1152 RECOVERY OF u HL [ 1370 OTHER FRAUD [ ] 835 PATENT-ABBREVIATED NEW DRUG APPLICATION ORGANIZATION ACT
DEFAULTED [ ]350 MOTOR VEHICLE [1371 TRUTH IN LENDING
‘STUDENT LOANS
(EXCL VETERANS)
[1355 MOTOR VEHICLE
PRODUCT LIABILITY
[ 1840 TRADEMARK
SOCIAL SECURITY
1480 CONSUMER cREDIT
13153 RECOVERY OF [1360 OTHER PERSONAL [1485 TELEPHONE CONSUMER
OVERPAYMENT [1380 OTHER PERSONAL LABOR |] 881 HIA (1395) PROTECTION ACT
OF VETERANS {1962 PERSONAL INJURY- PROPERTY DAMAGE, [ 1882 BLACK LUNG (923)
BENEFITS 0 MALPRACTICE [ 1385 PROPERTY DAMAGE [1710 FAIR LABOR [1863 DIWC/DIWW (405(9)) []490 CABLE/SATELLITETV
x] 160 STOCKHOLDERS PRODUCT LIABILITY DARDS ACT |] 864 SSID TITLE XVI [850 SECURTTIES/
[1720 LABORMGMT [1865 RSI (405(g)) ‘COMMODITIES!
11190 OTHER PRISONER PETITIONS EXCHANGE
(1195
CONTRACT
CONTRACT
463 ALIEN DETAINEE [1740 RALWAY LABOR ACT [ ]890 OTHER STATUTORY
[1510 MOTIONSTe FEDERAL TAX SUITS
PRODUCT ACTIONS UNDER STATUTES: VACATE SENTENCE, 1]LEAVE751 ACT
FAMILY MEDICAL
(FMLA)
‘ACTIONS
i ILITY 28 USC 2255 11870 TAXES (U.S. Plant or | ]891 AGRICULTURAL ACTS
[196 FRANCHISE CIVIL RIGHTS [1530 HABEAS CORPUS {1780 0THER LABOR
(er
[1535 DEATH PENALTY [1893 ENVIRONMENTAL,
PARTY
[1440 OTHER CIVIL RIGHTS [1540 MANDAMUS & OTHER (1791 EMPL RET INC
‘SECURITY ACT (ERISA)
09 [1895 FREEDOM O
REAL PROPERTY (Non Prisoner) MATION ACT
[1441 VOTING IMMIGRATION [ ] 896 ARBITRATION
1 ]210 1442 EMPLOYMENT PRISONER CIVIL RIGHTS |] 899 ADMINISTRATIVE
CONDEMNATION (.]443 HOUSING’ [1462 NATURALIZATION PROCEDURE ACT/REVIEW OR
{ ]220 FORECLOSURE ACCOMMODATIONS, 550 CIVIL RIGHTS: ‘APPLICATION ‘APPEAL OF AGENCY DECISION
(3230 RENT LEASE & [1445 AMERICANS WITH | ] 555 PRISON CONDITION 1408 OTHER MMORATION [1 950 CONSTITUTIONALITY OF
EJECTMENT DISABILITIES - 1560 CIVIL DETAINEE
{)240 TORTS TO LAND EMPLOYMENT IDITIONS OF CONFINEMENT STATE STATUTES
[3245 TORT PRODUCT [1446 AMERICANS WITH
ABILITY DISABILITIES -OTHER,
[1290 ‘ALL OTHER [1448 EDUCATION
REAL PROPERTY

Check if demanded in complaint:
DO YOU CLAIM THIS CASE IS RELATED TO A CIVIL CASE NOW PENDING IN S.D.N.Y.
CHECK IF THIS IS ACLASS ACTION AS DEFINED BY LOCAL RULE FOR DIVISION OF BUSINESS 13?
UNDER F.R.C.P. 23 IF SO, STATE:

DEMAND $. OTHER JUDGE DOCKET NUMBER.
Check YES only if demanded in complaint
JURY DEMAND: LI] yes NOTE: You must also submit at the time of filing the Statement of Relatedness form (Form IH-32).
(FILED:
NYSCEF DOC.
NEW
NO.
YORK
4 Case
COUN LY - K_O1 22 24.0334 INDEX
PageéOlep NYSCEF: 01/22/2024
NO. 656345/2023

(PLACE AN x IN ONE BOX ONLY)
ORIGIN
011 original O3 Remanded
Proceeding
a 2 Removed from
State Court
[]4 Reinstaedor [7] 5 transfered trom [] 6 Multsistrict o7 Appeal to District
Reopened (Specify District) Litigation Judge from
O. a. allpartios represented Appellate (Transferred) Magistrate Judge
Court
[x] b. At least one party 18 Muttiaistrict Litigation (Direct Filey
is pro se.
(PLACE AN x IN ONE BOX ONLY)
O1us. PLAINTIFF BASIS OF JURISDICTION
[2 U.S. DEFENDANT O03 Fe
IF DIVERSITY, INDICATE
DERAL QUESTION KJ4 Diversity CITIZENSHIP BELOW,
(U.S. NOT A PARTY)

CITIZENSHIP OF PRINCIPAL PARTIES (FOR
DIVERSITY CASES ONLY)
(Place an [X] in one box for Plaintiff and one box for Defendant)
CITIZEN OF THIS STATE PTF DEF PTF DEF
oi (11 CITIZEN OR SUBJECT OF A (13183 INCORPORATED and PRINCIPAL PLACE PTF DEF
FOREIGN COUNTRY OF BUSINESS IN ANOTHER STATE (15 (15
CITIZEN OF ANOTHER STATE [x2 [ ]2 INCORPORATED or PRINCIPAL PLACE
OF BUSINESS IN THIS STATE (14014 FOREIGN NATION (16 116
PLAINTIFF(S) ADDRESS(ES) AND COUNTY(IES)
Kevin X. Lu
2361 Brandini Dr.
Dublin, CA 9468

DEFENDANT(S) ADDRESS(ES) AND COUNTY (IES)
Cheer Holding, Inc (f/k/a Glory Star New Media
Group Holdings Limited)
Maples Coprorate Services Limited, Ugland Hous
e
South Church Street
Grand Cayman, Cayman Islands
DEFENDANT(S) ADDRESS UNKNOWN
REPRESENTATION IS HEREBY MADE THAT, AT
THIS TIME, | HAVE B EEN UNABLE, WITH REASON
THE RESIDENCE ADDRESSES OF THE FOLLO ABLE. DILIGENCE, TO ASCERTAIN
WING DEFENDANTS:

COURTHOUSE ASSIGNMENT
' hereby certify that this case should be assigned to
the courthouse indicated below Pursuant to Local Rule
for Division of Business 18, 20 or 21.

Check one: THIS ACTION SHOULD BE ASSIGNED TO: 0 WHITE PLAINS [x] MANHATTAN
VV LEE
DATE hs
aby Cf ATURE OF ATTORNEY OF RECORD
ADMITTED TO PRACTICE IN THIS DISTRICT
[] NO
i YES (DATE ADMITTED Mo.01
RECEIPT #
Attorney Bar Code # mw2009a—— Yr. 2010

Magistrate Judge is to be designated by the Clerk
of the Court,
Magistrate Judge
is $o Designated,
Ruby J. Krajick, Clerk of Court by
Deputy Clerk, DATED
UNITED STATES DISTRICT COURT (NEW YORK SOUTH
ERN)

Clear Form Save Print
NEW YO OUNTY «0172272024, 03:44 PM) INDEX NO. 656345/2023
NYSCEF BOC. NO. 4 Case IZ4-TV-UU4. Docu ed U
Paget Piveb nyScEF: 01/22/2024

EXHIBIT A
INDEX NO. 656345/2023
K 017227 [=27
2924Fit 03 Z2t
NY.
YORK
b24-cv-t
COUNTY CLERK 12 Pagket
Pf vebomyscEr 556242272024
NYSCEF Doc. NO. RECEIVED NYSCEF: 12/18/2023

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

ee
KEVIN X. LU
Plaintiff,
V. Index No.

Cheer Holding, Inc (f/k/a Glory Star New Media
Group Holdings Limited)

Defendant.

Cheer Holding, Inc
Maples Corporate Services,
PO Box 309, Ugland House,
Grand Cayman, KY 1-1104,
Cayman Islands
PLEASE TAKE NOTICE THAT YOU ARE HEREBY SUMMONED to answer
the complaint of the Plaintiff herein and to serve a copy of your answer on the Plaintiff at the
address indicated below within 20 days after the service of this Summons, or within 30 days
after service is complete if the summons is not delivered personally to you within the State of
New York.
YOU ARE HEREBY NOTIFIED THAT should you fail to answer, a judgment
will be entered against you by default for the relief demanded in the complaint.

Dated: December 18, 2023

br Lb
Kevin X. Lu
2361 Brandini Dr.
Dublin, CA 9468
(408) 598-1892

Pro Se Plaintiff

1 of 16
INDEX NO. 656345/2023
tryt ¢017227202403
NYG PAGER
Of ebony seer :6:8/2272024
NYSCEF DOC. NO. 1 RECEIVED NYSCEF 12/18/2023

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

Spe aaa a aa acerca ae ren
KEVIN X. LU
Plaintiff,
Index No.:

Cheer Holding, Inc (f/k/a Glory Star New Media
Group Holdings Limited)

Defendant.
SoeeeSeeeSec ares c SSE anITNNN eaeSSeS en)

Plaintiff Kevin X. Lu ("Plaintiff’), allege as follows as and for the Complaint

herein against Cheer Holding, Inc., also known as Glory Star Media Group Holdings

Limited (“Glory Star” or “Company”, for (i) aiding and abetting breach of fiduciary duties;

and (ii) negligence and gross negligence.

NATURE OF ACTION

1 This action arises from a shareholder-approved Agreement and Plan of

Merger (the “Take-Private”) pursuant to which Glory Star entered into with Cheers, Inc

(“Parent”) and GSMG, Ltd (“Merger sub) on July 11, 2022; and the subsequent termination

of the Take-Private transaction on April 11, 2023.

2 The Take-Private transaction was a management buyout. The Buyer

Group, led by the CEO and Chairman Bing Zhang and director Jia Lu (“Controlling

Stockholders”), along with their affiliates held a 73% ownership in the Company throughout

the relevant period.

3 On April 11, 2023, nine months subsequent to the execution of the

2 of 16
INDEX NO. 656345/2023
CO1/2272 924, 03:4
NY. YORK
Ecy=t
COUNTY C LERK 12/18/ AO RECEL VEboAYSGEF 90142212024
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/18/2023

definitive agreement of the Take-Private and six months following the shareholder meeting

approving it, the Company terminated the transaction citing Buyer Group’s refusal to close it.

The truth is, however, Controlling Stockholders never genuinely intended to go through with

the Take-Private transaction; it was simply a trial run for them.

4 Management buyout transactions involving Cayman-incorporated Chinese

companies often carry a risk of facing lawsuits. Such insider-controlled transactions are often

confronted with shareholder appraisal litigation notices between the time of shareholder

meeting and closing of the transaction. In the instance of Glory Star, the Controlling

Stockholders entered into the agreement as Buyer Group to buyout Glory Star, intending to

terminate the transaction if such merger dispute were to arise.

5 Glory Star, controlled by the same key persons, was aware of Buyer

Group’s intent while the parties were negotiating terms of the transaction.

6 The subsequent termination of the transaction was the alternative scheme

orchestrated by the Controlling Stockholders to exploit the Company’s damaged corporate

governance and the resulting depressed stock price to engineer share consolidation and

dilutive share issuance campaign.

Z The Controlling Stockholders breached their fiduciary duties owed to the

Company by engaging self-serving actions that led to the termination of the transaction. The

breach was facilitated by Glory Star and the special committee members hand-picked by

Chairman Zhang. The special committee failed to act independently and safeguard the

Company’s interests.

8 This action is not a derivative action as it currently stands. Rather, it is a

direct action against Glory Star for: (i) aiding and abetting breach of fiduciary duty; and (ii)

3 of 16
INDEX NO. 656345/2023

NYSPSELED: WEW! YORK” COUNTY CLERK” ADRES
Of VEbON STEF 550842270024
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/18/2023

negligence and gross negligence.

9. Plaintiff believes that after a reasonable opportunity for discovery,

substantial evidentiary support will exist for the allegations set forth herein.

PARTIES AND MATERIAL NON-PARTIES
10. Plaintiff Kevin X. Lu is an individual residing in California. At all

relevant times, the Plaintiff
was a registered and beneficial shareholder of Glory Star. As of

April 11, 2023, the Plaintiff’s shareholding consists of 260,708 shares as owner of record and

144,295 shares as beneficial owner.

1); Defendant is a Cayman Islands incorporated company with its operating

base located in China. At all relevant times, its stock was listed on the Nasdaq under the

symbol GSMG; and the warrant was traded under the symbol GSMGW.

12. Bing Zhang holds the positions of Chairman of the Board and Chief

Executive Officer. As the central figure of the Buyer Group, Bing Zhang owned 29% of the

Company throughout the relevant times.

13. Jia Lu holds the positions of director and senior vice president, serving on

both the Board of Directors and currently in a management capacity. He was a member of the

Buyer Group. Jia Lu owned 10% of the Company throughout the relevant times.

14, Cheers Inc., an exempted company incorporated with limited liability

under the laws of the Cayman Islands (“Parent”), and GSMG Ltd., an exempted company

incorporated with limited liability under the laws of the Cayman Islands and a wholly-owned

subsidiary of Parent (“Merger Sub”). Subject to the terms and conditions of the Merger

Agreement, at the effective time of the merger (the “Effective Time”), Merger Sub was to

4 of16
INDEX NO. 656345/2023
.O1/2272 24, 03:4
YORK
Ecy=t
COUNTY CLERK 12 Page?
Pf vebawsoEr 650172272024
NYSCEF DOC. NO. RECEIVED NYSCEF: 12/18/2023

merge with and into the Company, with the Company continuing as the surviving company

and a wholly-owned subsidiary of Parent (the “Merger”). The Controlling Stockholders,

Parent, and Merger Sub are collectively referred to herein as the Buyer Group.

15; Shah Capital Management, Inc., a North Carolina corporation which

serves as the investment adviser to Shah Capital Opportunity Fund LP; Shah Capital was an

affiliate of the Controlling Stockholders, and was a member of the Buyer Group.

16. Ke Chen was the independent director of the board and the chairperson of

the special committee that evaluated, negotiated, recommended and ultimately terminated the

Take-Private transaction on behalf of the Company.

JURISDICTION AND VENUE

Ti. Defendant Glory Star is subject to jurisdiction pursuant to CPLR §

302(a)(1) and the venue is proper because the Merger Agreement was governed by New

York law. The pertinent parts of the Merger agreement state following:

* Section 10.8 Governing Law, Jurisdiction.

This Agreement shall be interpreted, construed and governed by and in accordance

with the Laws of the State of New York without regard to the conflicts of Law

principles thereof that would subject such matter to the Laws of another

jurisdiction, except that the following matters arising out of or relating to this

Agreement shall be interpreted, construed and governed by and in accordance

with the Laws of the Cayman Islands in respect of which the Parties hereby

irrevocably submit to the nonexclusive jurisdiction of the courts of the Cayman

Islands: the Merger, the vesting of the undertaking, property and liabilities of

5 of 16
INDEX NO. 656345/2023
€017227202403
YORK
i24-cv-t
COUNTY CLERK 12 Paget
Pf vefoaw seer 556242272024
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/18/2023

Merger Sub and the Company in the Surviving Entity, the cancellation of the

Shares, the rights provided for in Section 238 of the CICA with respect to any

Dissenting Shares, the fiduciary or other duties of the Company Board and the

directors of Merger Sub and the internal corporate affairs of the Company and

Merger Sub.

18. Defendant Glory Star is subject to jurisdiction pursuant to CPLR §§

302(a)(1), 302(a)(2) because it was transacting business within the State of New York

directly and through its agents and the causes of action asserted herein arise from such

transaction of business, and/or because it has committed tortious acts within the State of

New York, and the causes of action asserted herein arise from such tortious acts.

19. The proceeds from the Initial Public Offering of Glory Star’s predecessor,

TKK Symphony Acquisition Corporation was used to fund the business operation of Glory

Star. The initial public offering took place in New York via the help of New York bankers

and attorneys.

20. The proceeds of follow-on public equity offering of Glory Star in 2021

was used to fund the business operation of Glory Star. The follow-on offering occurred in

New York, and the Company hired a New York firm Universal Securities LLC as its book

nning manager for the offering.

Case Info

Case No.

(Subscribe to View)

Document Filed Date

January 22, 2024

Case Filing Date

December 18, 2023

County

Parties

For full print and download access, please subscribe at https://www.trellis.law/.

Exhibit,Appendix: Kevin X Lu v. Cheer Holding, Inc. (f/k/a Glory Star New Media Group Holdings Limited)

Preview

Related Topics

Case Info

Parties