Deutsche Bank AG v. Devon Park Bioventures, L.P., Devon Park Associates, L.P., Sebastian Holdings, Inc., and Universal Logistic Matters, S.A.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

DEUTSCHE BANK AG, )
)
Plaintiff, )
)
v. ) C.A. No. 2017-0822-SG
)
DEVON PARK BIOVENTURES, L.P., )
DEVON PARK ASSOCIATES, L.P., )
SEBASTIAN HOLDINGS, INC., and )
UNIVERSAL LOGISTIC MATTERS, )
S.A., )
)
Defendants. )
)
DEVON PARK BIOVENTURES, L.P., )
)
Counterclaim )
Plaintiff, )
)
v. )
)
DEUTSCHE BANK AG, )
)
Counterclaim )
Defendant, )
)
and )
)
SEBASTIAN HOLDINGS, INC. and )
UNIVERSAL LOGISTIC MATTERS, )
S.A., )
)
Cross-Claim )
Defendants. )
MEMORANDUM OPINION

Date Submitted: October 16, 2024
Date Decided: January 29, 2025

Stephen C. Norman and Aaron R. Sims, of POTTER ANDERSON & CORROON
LLP, Wilmington, Delaware; OF COUNSEL: David G. Januszewski, Sheila C.
Ramesh, and Sesi V. Garimella, of CAHILL GORDON & REINDEL LLP, New
York, New York, Attorneys for Plaintiff and Counterclaim Defendant Deutsche Bank
AG.

James M. Yoch, Jr. and Kevin P. Rickert, of YOUNG CONAWAY STARGATT &
TAYLOR, LLP, Wilmington, Delaware; OF COUNSEL: Kevin C. Maclay, Todd E.
Phillips, Quincy M. Crawford, and Nathaniel R. Miller, of CAPLIN & DRYSDALE,
CHARTERED, Washington, DC, Attorneys for Defendant, Counterclaim Plaintiff,
and Cross-Claim Plaintiff Devon Park Bioventures, L.P. and Defendant Devon Park
Associates, L.P.

William M. Kelleher and Phillip A. Giordano, of GORDON, FOURNARIS &
MAMMARELLA, P.A., Wilmington, Delaware, Attorneys for Defendant Sebastian
Holdings, Inc.

K. Tyler O’Connell, Albert J. Carroll, R. Eric Hacker, and Samuel E. Bashman, of
MORRIS JAMES LLP, Wilmington, Delaware, Attorneys for Defendant CPR
Management, S.A., f.k.a. Universal Logistic Matters, S.A.

GLASSCOCK, Vice Chancellor (retired, sitting by Supr. Ct. Order 1, 2025
(January 8, 2025))
This is the latest installment in this long-running Delaware action in which

Plaintiff Deutsche Bank AG (“Deutsche”) seeks to collect a judgment against

Defendant Sebastian Holdings, Inc. (“Sebastian”). That very substantial judgment

was awarded by an English court more than a decade ago. In the interim, Sebastian

and its owner, Alexander Vik, have led Deutsche on a merry chase through several

jurisdictions in an attempt to satisfy the judgment. This action represents one such

effort. Briefly, Sebastian held, at the time of the judgment, a limited partnership

interest in Defendant Devon Park Bioventures, L.P. (“Devon LP”), a partnership

created in Delaware and doing business in Pennsylvania. Sebastian purported to

transfer this interest to Defendant CPR Management, S.A. (“CPR”), an entity

supposedly controlled by Alexander Vik’s father. The gravamen of this action

involves Plaintiff’s contention that the transfer was fraudulent, designed to avoid

satisfaction of Plaintiff’s judgment against Sebastian, from which fraudulent transfer

various remedies, per Plaintiff, flow.

I never reached these substantive issues, because I determined I lacked

jurisdiction over Sebastian and CPR, both foreign entities.

Remaining is Plaintiff’s claim that the Defendant entities over which

jurisdiction does exist, Devon LP and its general partner, are implicated in, and liable

to Plaintiff for, their role in the transfer of the partnership interest from Sebastian to

CPR, and for distributions made to CPR, under theories of common-law fraud and

1
civil conspiracy. Currently before me is the motion to dismiss of Devon LP and

Devon Park Associates, L.P. (“Devon GP,” together with Devon LP, the “Devon

Park Entities”), for failure to state a claim.

It was a truism impressed upon me in the long-ago world of Twentieth

Century litigation that a money judgment was only a part of vindication of a

successful plaintiff’s claim, and that collection of the judgment could be the steeper

half of the effort. Still true, as the litigation arising from the original judgment here

attests. I am sympathetic to Plaintiff’s frustration as it tries to salvage, from litigation

in this jurisdiction, some type of satisfaction of that judgment against the parties over

whom jurisdiction may be established. Even given the plaintiff-friendly inferences

obtaining, however, I cannot find that Deutsche has stated a claim against the Devon

Park Entities. Accordingly, the Devon Park Entities’ motion to dismiss is granted.

My reasons are laid out, below.

2
I. BACKGROUND 1

A. The Parties and Relevant Non-Parties

Plaintiff and Counterclaim Defendant Deutsche is a corporation organized

under the laws of Germany. 2 Deutsche maintains a branch office in New York, New

York, and has consented to personal jurisdiction. 3

Defendant Devon LP is a Delaware limited partnership with its principal

office in Pennsylvania. 4 Devon LP has also filed counterclaims and cross-claims for

interpleader in this action.5

Defendant Devon GP is a Delaware limited partnership and the general

partner of Devon LP. 6

Defendant Sebastian is a corporation organized under the laws of the Turks

and Caicos Islands. 7 It is an “exempted company,” which cannot do business in the

Turks and Caicos Islands beyond a de minimis level.8

1
This memorandum opinion includes a brief recitation of facts, which are drawn from the
Plaintiff’s Verified Amended Complaint, and incorporates only those necessary to my analysis.
Dkt. No. 326 (“Am. Compl.”). A fuller explanation of the facts is laid out in Deutsche Bank AG
v. Devon Park Bioventures, L.P., 2021 WL 2711472 (Del. Ch. June 30, 2021) (“Deutsche Bank
I”) and Deutsche Bank AG v. Devon Park Bioventures, L.P., 2023 WL 7159921 (Del. Ch. Oct. 31,
2023) (“Deutsche Bank II”).
2
Am. Compl. ¶ 8.
3
See id.
4
Id. ¶ 9.
5
See Def. Devon Park Bioventures, L.P.’s Answer to the Verified Compl. and Verified
Countercls.–Cross-Cls. for Interpleader, Dkt. No. 15 (“Interpleader”).
6
Am. Compl. ¶¶ 10, 20.
7
Id. ¶ 11.
8
Id.
3
Defendant CPR is a corporation organized under the laws of Panama. 9 CPR

formally changed its name from Universal Logistic Matters, S.A. to CPR

Management, S.A. in 2015.10

Non-party Alexander Vik (“Vik Jr.”) is a Norwegian billionaire.11 He was, at

all relevant times, the sole shareholder and director of Defendant Sebastian. 12

Non-party Per Johansson was, at relevant times, an agent, consultant, and/or

employee of Sebastian and/or Vik Jr.13 He was also an agent, consultant, and/or

employee of CPR.14

Non-party VBI Corporation (“VBI”) is a corporation organized under the laws

of the Turks and Caicos Islands whose sole shareholder is, and was at all relevant

times, Alexander Vik, Sr. (“Vik Sr.”), Vik Jr.’s father. 15 VBI is an is an “exempted

company,” which cannot do business in the Turks and Caicos Islands beyond a de

minimis level. 16

9
Id. ¶ 12.
10
Id. CPR appears to have been formerly known as both Universal Logistic Matters, S.A. and
Universal Logistics Matters, S.A. Id. ¶ 5.
11
Id. ¶¶ 2, 13.
12
Id. ¶ 11.
13
Id. ¶ 15.
14
Id.
15
Id. ¶ 14.
16
Id.
4
B. Factual Background

1. Deutsche Prevails in an English Legal Action Against Sebastian

In 2008, Sebastian failed to satisfy margin calls Deutsche made to recoup

losses it incurred trading on Sebastian’s behalf. 17 Deutsche filed suit against

Sebastian in an English court on January 21, 2009 (the “English Action”) seeking

amounts owed in connection with those unpaid margin calls, as well as interest and

costs. 18 Deutsche prevailed in that action, obtaining a judgment for $235,646,345

on November 8, 2013 (“English Judgment”). 19 Sebastian has not paid Deutsche any

portion of the amount due under the English Judgment.20 Deutsche seeks to satisfy

the English Judgment from Sebastian’s remaining assets—in particular a 23%

limited partnership interest in Devon LP (“the Devon Interest”). 21

2. The Devon Interest Prior to the Assignment Agreement in 2014

Neither Devon LP’s business nor the date on which Sebastian became a

limited partner of Devon LP is disclosed in the Amended Complaint. Devon LP,

Sebastian and non-party JP Morgan Chase Bank, N.A. (“JP Morgan”) entered into

an escrow agreement dated July 13, 2012, whereby Sebastian deposited funds into

17
Id. ¶¶ 35–36.
18
Id. ¶¶ 3, 44. The English Action is captioned Deutsche Bank AG v. Sebastian Holdings, Inc.,
Claim No. 2009 Folio 83. Id. ¶ 3.
19
Id. ¶¶ 1, 3, 49–51.
20
See id. ¶ 53.
21
Id. ¶¶ 4, 228–29.
5
an escrow account (with JP Morgan as escrow agent) to cover future capital calls

made by Devon LP.22

On or around September 26, 2012, during the pendency of the English Action

and another related action, and unbeknownst to Deutsche, Sebastian purported to

transfer the majority of its remaining non-cash assets to non-party VBI, including

the Devon Interest. 23 The transfer of the Devon Interest was never approved by

Devon LP’s general partner, Devon GP, as would have been required by Devon LP’s

Partnership Agreement.24 Presumably, this attempted transfer was not effective.

3. Sebastian Purports to Assign the Devon Interest to CPR

On August 29, 2014, Sebastian purported to transfer the Devon Interest to

CPR via an Assignment and Assumption Agreement (the “Assignment

Agreement”).25 Deutsche did not learn of this transfer until 2016, in connection with

another lawsuit seeking to collect amounts owed under the English Judgment. 26 The

Assignment Agreement does not include any information on what CPR provided to

22
Id. ¶¶ 16, 149. Deutsche defines “Devon Park” in the Amended Complaint as Devon GP
together with Devon LP, and alleges that “Devon Park” entered into this escrow agreement. Id. ¶¶
6, 16. However, only Devon LP is a party to the escrow agreement. Ex. B. to Am. Compl. (the
“Escrow Agreement”). Additionally, the Amended Complaint states the amounts deposited in the
escrow account were “intended to cover future capital calls made by Devon Park.” Am. Compl. ¶
6. I assume that Deutsche intended to reference Devon LP, not both Devon LP and Devon GP, as
it is not alleged that Sebastian was a limited partner of Devon GP.
23
Id. ¶¶ 83–85, 90.
24
Id. ¶¶ 90–94, 102–03.
25
Id. ¶¶ 133, 241; see Ex. D to Am. Compl. (“Assignment Agreement”).
26
Am. Compl. ¶¶ 112–13.
6
Sebastian, if anything, in consideration for the assignment and no contemporaneous

documentation evidences what consideration CPR provided to Sebastian. 27

In the Assignment Agreement, CPR represented that the Devon Interest was

being acquired for CPR’s own account, that no one other than CPR has any interest

or right to acquire the Devon Interest, and that CPR was not solely formed for the

purpose of making an investment in Devon LP.28 Sebastian also made

representations in the Assignment Agreement, including, among others, that:

[the transfer to CPR would not] result in the creation of any pledge,
claim, security interest, encumbrance, charge, restriction, claim of
fraudulent transfer or limitation of any kind, whether arising by
agreement, operation of law or otherwise (“Lien”) upon the [Devon]
Interest

and

[t]here is no (i) action, suit, claim, proceeding or investigation pending
or threatened against [Sebastian], at law or in equity, or before or by
any federal, provincial, state, municipal or other governmental
department, commission, board, bureau, agency, court, or
instrumentality, domestic or foreign . . . which, if adversely determined,
would question the validity of, or prevent the consummation of, the
transactions contemplated by this [Assignment] Agreement.29

According to the Assignment Agreement, Sebastian’s representations

constituted “a material inducement to the General Partner to approve the assignment

of the [Devon] Interest and the admission of [CPR] as a substituted Limited

27
Id. ¶¶ 160–62.
28
Id. ¶ 139.
29
Id. ¶ 140; Assignment Agreement at 2–3.
7
Partner.”30 Sebastian did not disclose to the Devon Park Entities at the time of the

transfer of the Devon Interest from Sebastian to CPR that Sebastian had purported

to sell the Devon Interest to VBI in 2012.31

Devon GP did not test or investigate Sebastian’s representations in the

Assignment Agreement.32 Sebastian represented to the Devon Park Entities that

CPR was ultimately controlled by Vik Sr. 33 CPR, as part of the Assignment

Agreement, submitted a Confidential Investor Questionnaire to the Devon Park

Entities which identified “Carmelo Polanco Rondon” as the owner of CPR and

“Rolando Castillo” as director of CPR.34 Devon GP approved the transfer of the

Devon Interest from Sebastian to CPR. 35 As part of the Assignment Agreement,

CPR granted Devon GP a power of attorney with respect to certain documents

related to the limited partnership.36

30
Am. Compl. ¶ 141; Assignment Agreement at 2.
31
Am. Compl. ¶ 144.
32
Id. ¶ 143.
33
Id. ¶ 145.
34
Id. ¶ 146.
35
Id. ¶ 147.
36
Id. ¶ 135. The Amended Complaint alleges that “[t]he Assignment Agreement grants Devon
Park, as the Delaware General Partner, a power of attorney to act on behalf of CPR,” however, the
Assignment Agreement does not grant a general power of attorney, but rather the power to act on
behalf of CPR with respect to certain listed types of documents related to Devon LP. Compare id.,
with Assignment Agreement ¶ 6. Additionally, as noted above, Deutsche defines “Devon Park”
in the Amended Complaint as both Devon GP and Devon LP, but the Amended Complaint alleges
that the “Assignment Agreement grants Devon Park, as the Delaware General Partner, a power of
attorney.” Am. Compl. ¶¶ 6, 135. “Devon Park” in this allegation must be Devon GP alone, not
both Devon LP and Devon GP (both because the allegation notes as much, and because the
Assignment Agreement states it is Devon GP that was granted the power of attorney). This is one
of numerous instances in the Amended Complaint where Deutsche makes an allegation about
8
Prior to the Assignment Agreement, with respect to the Devon Interest, the

Devon Park Entities had dealings with Johansson, including during the negotiation

of the Escrow Agreement. 37 Johansson also negotiated the transfer of the Devon

Interest on behalf of both Sebastian and CPR.38 Following the Assignment

Agreement, the Devon Park Entities continued to copy Vik Jr. and Johansson on

correspondence related to the Devon Interest, 39 who both continued to take an

“active role” in the Devon Interest.40

4. The Escrow is Released and CPR Makes Further Pre-Payment

Following the date of the Assignment Agreement, on September 29, 2014,

Sebastian and the Devon Park Entities sent joint written instructions to JP Morgan

authorizing the release of the escrow funds to the Devon Park Entities.41 The

instructions noted that Sebastian’s transfer of the Devon Interest was to be deemed

“Devon Park,” but context suggests that Deutsche is alluding to only one of the two entities it has
defined as “Devon Park.” See, e.g., id. ¶ 168 (alleging that “Devon Park wired $5,589,574 to CPR
as part of a distribution to Devon Park’s limited partners”) (emphasis added). For purposes of this
Memorandum Opinion and the allegations being made in the Amended Complaint, there is no
meaningful difference, and any confusion caused is not material. I do not hereafter note these
inconsistencies, and where Deutsche has alluded in the Amended Complaint to “Devon Park,” I
too have used the defined term in the Memorandum Opinion for both entities together, the “Devon
Park Entities” (that is, except in the following background section regarding distributions and
winding down, which are clearly meant to mean distributions to Devon LP’s limited partners and
that Devon LP is winding, not distributions to Devon GP’s limited partners and Devon GP’s
winding down).
37
Id. ¶¶ 149–50.
38
Id. ¶¶ 15, 148.
39
Id. ¶ 157.
40
Id. ¶ 156.
41
Id. ¶ 151.
9
a “Termination Event” (as defined in the escrow agreement).42 As part of the

Assignment Agreement, all remaining funds in the escrow account were released

directly to the Devon Park Entities as a “prepayment” on future capital

contributions.43 Additionally, CPR agreed to pay directly to the Devon Park Entities

$2,528,305.18 as a further “prepayment” on future capital contributions. 44 The

release of the escrow and agreement by CPR to make an additional direct payment

meant, per Plaintiff, that the Devon Park Entities received assurances that all future

capital contributions related to the Devon Interest were pre-paid.45

5. Devon LP Begins to Make Distributions

On or about March 26, 2015, the Devon Park Entities wired $5,589,574 to

CPR as part of a distribution to Devon LP’s limited partners (the “First

Distribution”).46 On or about May 13, the Devon Park Entities attempted a second

payment to CPR as part of a second distribution to Devon LP’s limited partners, this

time the wire transfer was rejected by Deutsche in its capacity as an intermediary

42
Id.
43
Id. ¶ 153.
44
Id. ¶ 154.
45
Id. ¶ 155. It is not clear from the Amended Complaint that CPR did anything other than agree
to make future capital contributions. Deutsche alleges that CPR “agreed to pay” an amount directly
to the Devon Park Entities as a “prepayment,” but an agreement to pay is not a prepayment. The
Assignment Agreement itself states that CPR will “contribute to [Devon LP] $2,528,305.18 (the
‘Prepayment’) as a prepayment of [CPR]’s future Capital Contributions” (this amount would not
be used to calculate partnership ownership percentages until the general partner issues a
“Drawdown Notice”). Assignment Agreement ¶ 5(c). However, the Assignment Agreement does
not state a date or time period for CPR to make this “prepayment,” nor does Deutsche allege in the
Amended Complaint that it was in fact made.
46
Am. Compl. ¶ 168.
10
bank (the “Failed Second Distribution”). 47 On or about May 15, the Devon Park

Entities attempted to use new wire instructions to make the distribution to CPR; this

wire transfer was also rejected.48 Vik Jr. and Johansson (and others on their behalf)

then took certain steps and made certain proposals in an attempt to have this second

distribution wired to CPR, including changing CPR’s corporate name from

Universal Logistics Matters, S.A. to CPR, suggesting alternative banks to receive

the wire transfer, and suggesting further transfers of the Devon Interest (these further

attempts to make distributions, together with the First Distribution and Failed

Second Distribution, the “Distribution and Attempted Distributions”).49 The Devon

Park Entities pointed out irregularities with the proposal, but continued to work with

Johansson to clear anti-money laundering requirements and process distributions to

CPR.50

In December 2015, Devon LP made another distribution to its limited

partners, but not including Sebastian or CPR. 51 Aside from the First Distribution,

Devon LP has not made further distributions to CPR. 52 Devon LP is in the process

47
Id. ¶ 169.
48
Id. ¶ 170.
49
Id. ¶¶ 172–73.
50
Id. ¶ 176. The Devon Park Entities questioned the validity of one of the entities that CPR
proposed to further transfer the Devon Interest to and also noted that “[t]wo major banks have
likely already filed suspicious activity reports” in connection with attempts to process the
distributions.” Id.
51
Id. ¶¶ 177, 179.
52
Id. ¶ 179.
11
of winding up its affairs pursuant to the terms of its partnership agreement and

Delaware Law. 53

6. The Devon Park Entities Attempt to Intervene in Other Actions

and CPR Seeks Arbitration

After prevailing in the English Action, Deutsche attempted to collect on the

English Judgment with a series of actions in various courts, which are now either

pending or stayed. 54 This included an action filed by Deutsche in the Supreme Court

of the State of New York, New York County, against Vik Jr., Vik Sr., Sebastian and

VBI on April 21, 2016 (the “2016 New York Enforcement Action”).55 On

September 21, 2016, the Devon Park Entities filed a motion to intervene in the 2016

New York Enforcement Action. 56

On March 15, 2017, CPR initiated an arbitration proceeding against the Devon

Park Entities in Pennsylvania, in which CPR prevailed as the holder of the Devon

Interest.57 This arbitration award was affirmed by the United States District Court

53
Id. ¶ 180.
54
See Deutsche Bank AG v. Vik et al., Index No. 161257/2013 (Sup. Ct. N.Y. Co.); Deutsche Bank
AG v. Sebastian Holdings, Inc. and Alexander Vik, Dkt. No. X08-FST-CV13-5014167-S (Conn.
Super. Ct.), amongst others.
55
Id. ¶ 112.
56
Id. ¶ 113.
57
Id. ¶¶ 119, 121. CPR initiated the arbitration to recover the value of unpaid capital distributions
from the Devon Interest, and the Devon Part Entities asserted a counterclaim against CPR seeking
declaratory judgment on the enforceability of the Assignment Agreement. See id. ¶¶ 119–21.
12
for the Eastern District of Pennsylvania and, subsequently, the Third Circuit.58

However, a subsequent decision of an English court concluded that Sebastian is the

rightful owner of the Devon Interest. 59 Neither of these decisions involved all parties

who claim ownership of the Devon Interest, therefore the parties’ conflicting

contentions have not yet been heard by a court of competent jurisdiction that can

afford all parties their due process rights.

C. Procedural History

Deutsche initiated this action on November 16, 2017, asserting claims for (1)

recognition and (2) enforcement of the English Judgment against Sebastian, (3) a

charging order against the Devon Interest pursuant to 6 Del. C. § 17-703, and (4)

fraud and (5) conspiracy against all Defendants.60 Devon LP answered the

complaint on December 21, 2017, and asserted counterclaims and cross-claims for

interpleader against Deutsche, Sebastian, and CPR, requesting this Court determine

the rightful owner of the Devon Interest and the distributions associated with it.61

This Court then entered a temporary restraining order on January 29, 2018 (the

58
See CPR Mgmt., S.A. v. Devon Park Bioventures, L.P., 19 F.4th 236, 240 (3d Cir. 2021). For
procedural reasons not pertinent here, Deutsche was not able to participate in the arbitration.
59
See Ltr. to Hon. Sam Glasscock III Ex. A, Dkt. No. 400 (the “English Decision”).
60
Am. Compl. ¶¶ 212–59 (asserting same causes of action as the original Complaint); see Verified
Compl. ¶¶ 151–97, Dkt. No. 1.
61
Interpleader ¶¶ 65–69.
13
“TRO”), to prevent Devon LP from making any distributions associated with the

Devon Interest during the pendency of this action.62

Deutsche filed an Amended Complaint on October 12, 2020. 63 Sebastian,64

CPR 65 and the Devon Park Entities, 66 in each case, filed Motions to Dismiss on

November 13, 2020. After oral argument on February 17, 2021, 67 I issued a

Memorandum Opinion on June 30, 2021 (“Deutsche Bank I”) granting Motions to

Dismiss filed by Sebastian and CPR (together, the “Jurisdictional Defendants”),

which had challenged the jurisdictional basis under the Delaware long-arm statute

and jurisdiction under the conspiracy theory. 68

62
Tr. of Jan. 29, 2018 Oral Arg. on Pl.’s Mot. for TRO and Rulings of the Ct. 101:23–112:13, Dkt.
No. 96.
63
Am. Compl.
64
Def.-Crosscl. Def. Sebastian Hldgs., Inc.’s Mot. to Dismiss, Dkt. No. 329. Sebastian had
previously filed a Motion to Dismiss the original Complaint and Devon LP’s cross-claims on
January 19, 2018. Def.-Crosscl. Def. Sebastian Hldgs. Inc.’s Mot. to Dismiss, Dkt. No. 59.
65
Def. CPR Mgmt., S.A. fka Universal Logistic Matters, S.A. Renewed Mot. to Dismiss, Dkt. No.
332. Like Sebastian, CPR had previously filed a Motion to Dismiss the original Complaint and
Devon LP’s cross-claims on January 19, 2018. Def. CPR Mgmt., S.A., fka Universal Logistic
Matters, S.A.’s Mot. to Dismiss the Compl. and Cross-Cls. pursuant to Ct. Ch. R. 12(b)(1), (2),
(4)-(6), Dkt. No. 61. CPR had amended its original Motion to Dismiss on February 14, 2018. Def.
CPR Mgmt., S.A. fka Universal Logistic Matters, S.A.’s Am. Mot. to Dismiss, Dkt. No. 97.
66
Def. Devon Park Bioventures, L.P. and Devon Park Assocs., L.P.’s Mot. to Dismiss the Am.
Compl., Dkt. No. 330. The Devon Park Entities had previously filed a Motion to Dismiss the
original Complaint on December 21, 2017. Def. Devon Park Bioventures, L.P. and Devon Park
Assocs., L.P.’s Mot. to Dismiss, Dkt. No. 16.
67
See Tr. of February 17, 2021, Oral Arg. on Defs.’ Mots. to Dismiss the Am. Compl. and the
Crosscls. for Interpleader, Dkt. No. 368.
68
Deutsche Bank I, 2021 WL 2711472, at *7–11. In that Memorandum Opinion, I held that the
Jurisdictional Defendants did not subject themselves to Delaware long-arm service and did not
have sufficient minimum contacts with this state to satisfy due process in exercise of jurisdiction
over them. Id. at *8, 10–11.
14
Following a hearing on September 22, 2021, 69 I directed the parties to submit

supplemental briefing to address only the jurisdictional issues regarding Deutsche’s

request for a charging order or Devon LP’s interpleader claim, which were

characterized as in rem or quasi in rem and supported by statutory jurisdiction. 70 I

heard oral argument on April 25, 2022,71 but a development in the litigation in

England72 necessitated further supplemental memorandums of law. 73

On August 26, 2022, Deutsche filed a Motion for Sanctions against Sebastian

and CPR. 74

After receiving the supplemental memorandums, I heard supplemental oral

argument on the Motions to Dismiss on July 31, 2023.75 On October 31, 2023, I

issued a Memorandum Opinion (“Deutsche Bank II”) addressing the motions of the

69
Tr. of 9.22.21 Tel. Scheduling Conf., Dkt. No. 376.
70
Granted (Stipulation and [Proposed] Order Regarding Suppl. Br.), Dkt. No. 377.
71
Tr. of 4-25-2022 Oral Arg. on Defs.’ Mots. To Dismiss, Dkt. No. 391.
72
Deutsche submitted a letter to this Court that attached a decision and order from an English court
providing inter alia that the purported transfer of the Devon Interest from Sebastian to CPR was a
pretense because Sebastian retained beneficial ownership of the Devon Interest at all times. See
English Decision.
73
I directed the parties to submit supplemental memorandums of law addressing the effect of the
English court’s decision on the Jurisdictional Defendants’ remaining motions relating to in rem or
quasi in rem jurisdiction regarding Deutsche’s request for a charging order, Devon LP’s
interpleader claim, and Motions to Dismiss. Tr. of 9.27.22 Tel. Status Conf. on Pl.’s Mot. Suppl.
Compl. 5:20–6:3, Dkt. No. 421.
74
Deutsche Bank AG’s Mot. for Sanctions, Dkt. No. 404 (“Mot. for Sanctions”).
75
Tr. of 7-31-2023 Tel. Supplemental Oral Arg. Concerning Defs.’ Mots. To Dismiss – Held via
Zoom, Dkt. No. 447.
15
Jurisdictional Defendants to dismiss for lack of in rem and quasi in rem jurisdiction

and granted their motions. 76

On December 11, 2023, Deutsche filed a Motion for Entry of Partial Final

Judgment Under Rule 54(b), or in the alternative, an Application for Certification of

Interlocutory Appeal Under Rule 42.77 By Letter Opinion on January 2, 2024, I

reserved on Deutsche’s Motion for Entry of Partial Final Judgment, and denied

Certification of Interlocutory Appeal.78 Deutsche appealed to our Supreme Court.79

Our Supreme Court refused Deutsche’s application for interlocutory review on

February 9, 2024. 80 In the interim, on December 22, 2023, CPR filed a Motion to

Dissolve Temporary Restraining Order and Recover Damages Against the Bond.81

I granted an order governing supplemental briefing relating to the outstanding

motions on July 17, 2024. 82 These outstanding motions are: (1) the Devon Park

Entities’ Motion to Dismiss, (2) Deutsche’s Motion for Entry of Partial Final

Judgment, (3) Deutsche’s Motion for Sanctions, and (4) CPR’s Motion to Dissolve

76
See Deutsche Bank II.
77
Deutsche Bank AG’s Mot. for Entry of a Partial Final J. Under R. 54(B) or in the Alternative,
Appl. for Certification of Interlocutory Appeal Under Rule 42, Dkt. No. 458.
78
Deutsche Bank AG v. Devon Park Bioventures, L.P., 2024 WL 18244 (Del. Ch. Jan. 2, 2024).
79
Notice of Appeal from Interlocutory Order, Dkt. No. 467; Amended Notice of Appeal from
Interlocutory Order, Dkt. No. 469.
80
Deutsche Bank AG v. Sebastian Holdings, Inc., 2024 WL 513708 (Del. Feb. 9, 2024) (TABLE).
81
CPR Mgmt. S.A.’s Mot. to Dissolve Temporary Restraining Order and Recover Damages
Against the Bond, Dkt. No. 463.
82
Granted (Stipulated [Proposed] Order Governing Supplemental Briefing Relating to
Outstanding Mots., filed on behalf of the parties), Dkt. No. 483.
16
the TRO (and recover damages against the bond). 83 Following supplemental

briefing, I heard oral argument on the outstanding motions on September 9, 2024.84

I allowed Deutsche to provide, post-oral argument, certain citations to an action in

England related to its Motion for Sanctions, 85 which I received on October 8, 2024.86

After receiving responsive letters from Sebastian and CPR,87 I considered the

matters submitted as of October 16, 2024.

II. ANALYSIS

Sebastian and CPR have been dismissed, on jurisdictional grounds, from the

claims brought in the Amended Complaint and from the cross-claims brought by the

Devon Park Entities. Of the claims brought in the Amended Complaint, the only

ones that now remain are fraud and conspiracy against Devon LP and Devon GP.

The Devon Park Entities previously moved to dismiss these claims under Court of

Chancery Rule 12(b)(6), failure to state a claim. Following the dismissal of the

claims (and cross-claims) against Sebastian and CPR, I allowed the Devon Park

Entities to make additional submissions with respect to their Motion to Dismiss,

wherein the Devon Park Entities asserted (as a separate basis for dismissal) that

83
Id.
84
Tr. of 9-9-2024 Oral Arg. on Outstanding Mots., Dkt. No. 509.
85
Id. at 103:10–104:1.
86
Ltr. to the Honorable Sam Glasscock III from Stephen C. Norman Regarding the Sept. 9, 2024
Hr’g, Dkt. No. 511.
87
Ltr. from William M. Kelleher, Esq. to V.C. Sam Glasscock III Responding to Deutsche Bank’s
Ltr. of Oct. 8, 2024, Dkt. No. 512; Correspondence to The Honorable Sam Glasscock III from K.
Tyler O’Connell, Esq. Regarding Deutsche’s Oct. 8, 2024 Ltr., Dkt. No. 513.
17
Sebastian and CPR are necessary and indispensable parties and their absence merits

the dismissal of the claims against the Devon Park Entities under Court of Chancery

Rule 12(b)(7). 88

In the interim, the litigation has continued. Deutsche requests an Entry of

Partial Final Judgment, presumably so that it can begin an appeal. Sebastian and

CPR are now both dismissed from this action; CPR has therefore moved for the

TRO—that currently prevents distributions related to the Devon Interest to flow to

CPR—to be dissolved. Lastly, during the pendency of this litigation, Deutsche

brought a Motion for Sanctions against Sebastian and CPR for discovery abuses

(alleging, among other things, spoliation); while the mandated discovery in this case

has concluded, Deutsche bases its Motion for Sanctions on an order related to Vik

Jr. from an English court that was issued after discovery concluded. Deutsche

requests either default judgment or an adverse inference in favor of jurisdiction

against Sebastian and CPR.

I find below that Deutsche has “fail[ed] to state a claim upon which relief can

be granted” 89 against Devon LP and Devon GP, which resolves all the claims

brought by Deutsche in its Amended Complaint. As a result, Deutsche’s Motion for

88
Dismissal under Court of Chancery Rule 12(b)(7) is for “failure to join a party under Rule 19.”
Ct. Ch. R. 12(b)(7). Court of Chancery Rule 19 in turn governs the required joinder of parties (if
joinder is feasible and if joinder is not feasible). Ct. Ch. R. 19.
89
Ct. Ch. R. 12(b)(6).
18
Entry of Partial Final Judgment is moot. The Motion for Sanctions is not resolved

per se by granting the Devon Park Entities’ Motion to Dismiss, but I find the Motion

for Sanctions is not warranted, and deny it.

A. The Devon Park Entities’ Motion to Dismiss the Fraud and Conspiracy
Claims Under Rule 12(b)(6)

1. Standard of Review

I begin with the Devon Park Entities’ Motion to Dismiss under Court of

Chancery Rule 12(b)(6). The standard of review for such a motion is well

established:

(i) all well-pleaded factual allegations are accepted as true; (ii) even
vague allegations are well-pleaded if they give the opposing party
notice of the claim; (iii) the Court must draw all reasonable inferences
in favor of the non-moving party; and (iv) dismissal is inappropriate
unless the plaintiff would not be entitled to recover under any
reasonably conceivable set of circumstances susceptible of proof. 90

The Court should not, however, “accept every strained interpretation of the

allegations, credit conclusory allegations that are not supported by specific facts, or

draw unreasonable inferences in the plaintiff’s favor.” 91

90
Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002) (footnotes omitted) (internal
quotations omitted).
91
City of Fort Myers Gen. Emps.’ Pension Fund v. Haley, 235 A.3d 702, 716 (Del. 2020) (internal
quotations omitted); see also Crescent/Mach I P’rs, L.P. v. Turner, 846 A.2d 963, 972 (Del. Ch.
2000) (explaining that the court may “disregard allegations which are merely conclusory and lack
factual support”).
19
2. Deutsche Has Failed to Plead a Claim of Fraud Against the Devon
Park Entities

Under Delaware law, to state a claim for fraud, a plaintiff must allege:

(1) a false representation made by the defendant; (2) the defendant
knew or believed the representation was false or was recklessly
indifferent to its truth; (3) the defendant intended to induce the plaintiff
to act or refrain from acting; (4) the plaintiff acted or refrained from
acting in justifiable reliance on the representation; and (5) damage
resulted from such reliance. 92

Fraud consists not “merely of overt representations,” but “may also occur through

deliberate concealment of material facts, or by silence in the face of a duty to

speak.”93 When basing a fraud claim on active concealment, a plaintiff:

must show that a defendant took some action affirmative in nature
designed or intended to prevent, and which does prevent, the discovery
of facts giving rise to the fraud claim, some artifice to prevent
knowledge of the facts or some representation intended to exclude
suspicion and prevent inquiry. 94

Court of Chancery Rule 9(b) provides heightened pleading standards for fraud, that

is “in alleging fraud or mistake, a party must state with particularity the

circumstances constituting fraud or mistake.” 95 A complaint alleging fraud must

therefore allege: “(1) the time, place, and contents of the false representation; (2) the

identity of the person making the representation; and (3) what the person intended

92
Valley Joist BD Hldgs., LLC v. EBESCO Indus., Inc., 269 A.3d 984, 988 (Del. 2021) (internal
citation omitted).
93
Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1074 (Del. 1983).
94
Transdigm Inc. v. Alcoa Global Fasteners, Inc., 2013 WL 2326881, at *6 (Del. Ch. May 29,
2013) (internal citation omitted).
95
Ct. Ch. R. 9(b).
20
to gain by making the representations.” 96 “Malice, intent, knowledge, and other

conditions of a person’s mind may be alleged generally.”97

Deutsche’s fraud claim against the Devon Park Entities is based on Devon

GP’s approval of the transfer of the Devon Interest from Sebastian to CPR, the First

Distribution from Devon LP to CPR, and the subsequent (failed) efforts by the

Devon Park Entities to make further distributions from Devon LP to CPR. These

actions, Deutsche alleges, were taken by the Devon Park Entities to aid Sebastian in

avoiding paying the English Judgment, which the Devon Park Entities either knew

of or were recklessly indifferent to.

Plaintiff’s flagship claim in this action is that Sebastian and CPR engaged in

a fraudulent transfer of the Devon Interest, to avoid satisfaction of (a portion of) the

English Judgment from the Devon Interest. I assume that this allegation was well-

pled, but its pursuit in Delaware has been frustrated by lack of jurisdiction over

Sebastian and CPR here. The fraud alleged against the Devon Park Entities, on the

other hand, must be based on actions of those entities themselves. There is, as the

Devon Park Entities point out, a critical flaw in Deutsche’s theory of fraud

committed by the Devon Park Entities; no pre-existing relationship has been pled

between the Devon Park Entities and Deutsche at the time of the Assignment

96
Abry P’rs V, L.P. v. F & W Acq. LLC, 891 A.2d 1032, 1050 (Del. Ch. 2006) (citing H-M Wexford
LLC v. Encorp, Inc., 832 A.2d 129, 145 (Del. Ch. 2003)).
97
Ct. Ch. R. 9(b).
21
Agreement or the Distribution and Attempted Distributions. The Amended

Complaint is devoid of contact between Deutsche and the Devon Park Entities

during which the Devon Park Entities could have made false representations to

Deutsche. 98 Neither has Deutsche alleged a duty owed to it by the Devon Park

Entities to speak, in other words, that the Devon Park Entities had an obligation to

inform Deutsche of the transfer of the Devon Interest or of the Distribution and

Attempted Distributions. Deutsche avers that for a claim of fraud based on active

concealment there is no requirement that a defendant have a pre-existing duty to

speak.99 Assuming this to be a correct statement of the law, however, in such case

the Devon Park Entities would still have had to taken an “action affirmative in nature

designed or intended to prevent”100 the discovery of the facts underlying the fraud

claim. Such action is not pled here.

If Deutsche’s fraud claim against the Devon Park Entities is that they actively

concealed the transfer of the Devon Interest and the subsequent Distribution and

98
Deutsche writes in briefing that “CPR’s and [the Devon Park Entities’] roles in concealing the
purported transfer and/or their silence in the face of their knowledge of the sham transaction,
English Judgment, and [Sebastian]’s efforts to squirrel away funds constitutes a false
representation for the purposes of pleading fraud.” Deutsche Bank AG’s Answering Br. in Opp.
To Defs.’ Mot. to Dismiss 33, Dkt. No. 339 (“Deutsche Answering Br.”). However, it cannot be
that the Devon Park Entities’ alleged concealment is an overt false representation when the Devon
Park Entities did not make any overt representations to Deutsche. As such, I understand
Deutsche’s argument to be that a “false representation” can be made not only overtly, but also by
concealment (which I analyze below).
99
Transdigm Inc., 2013 WL 2326881, at *6 (“A claim of fraud based on active concealment does
not require a showing that the defendant had a pre-existing duty to speak.”).
100
Id.
22
Attempted Distributions, this argument again suffers from a lack of nexus with

Deutsche. For a properly pled claim, Deutsche would have to allege an action taken

by the Devon Park Entities to conceal the transfer of the Devon Interest and the

distributions to CPR (prerequisite to the next requirement that such action was taken

with the intention to conceal). Deutsche states in briefing that the Devon Park

Entities have concealed from Deutsche “[Sebastian]’s continued ownership of the

Devon Interest and facts concerning the Assignment Agreement,” 101 but for support

Deutsche cites to its allegations in the Amended Complaint that Devon GP approved

the transfer of the Devon Interest (without testing or investigating representations

made by Sebastian, knowing that Johansson represented both Sebastian and CPR,

and knowing that conflicting statements had been made about CPR’s ownership), as

well as the fact that the Devon Park Entities made and attempted to make

distributions to CPR. I fail to find in those allegations (or elsewhere in the Amended

Complaint) any action taken by the Devon Park Entities to conceal the Assignment

Agreement or the Distribution and Attempted Distributions.

Deutsche’s remaining argument is that the actions of the Devon Park Entities

in approving the transfer of the Devon Interest and in the Distribution and Attempted

Distributions amounted to actions of concealment. First, I note that Deutsche does

not allege any action in connection with the approval that had the effect of

101
Deutsche’s Answering Br. 33.
23
concealment, or represented the intent to conceal anything from Deutsche. The

English Judgment was awarded prior to the Assignment Agreement and to the

Distribution and Attempted Distributions; however, the Devon Park Entities were

not parties to the English Action. Deutsche makes a purely conclusory allegation

that the Devon Park Entities knew or were recklessly indifferent to the English

Judgment at the time of the transfer, but fail to point to an act of concealment.

The Devon Park Entities argue strenuously that the other elements of

common-law fraud are lacking from the well-pled allegations of the Amended

Complaint. But since Plaintiff has failed to plead with specificity a false

representation or intentional act of concealment on the part of the Devon Park

entities, I decline to consider the matter further.

3. Deutsche Has Failed to Plead a Claim of Conspiracy Against the
Devon Park Entities

Deutsche also brings a claim that the Devon Park Entities were members in a

civil conspiracy with Sebastian and CPR. The elements of civil conspiracy are: “(1)

[a] confederation or combination of two or more persons; (2) [a]n unlawful act done

in furtherance of the conspiracy; and (3) [a]ctual damage.”102 To prevail at trial, a

plaintiff would have to prove “knowing participation” in the conspiracy103 (in other

102
Nicolett, Inc. v. Nutt, 525 A.2d 146, 149–50 (Del. 1987).
103
OptimisCorp v. Waite, 2015 WL 5147038, at *57 (Del. Ch. 2015), aff’d, 137 A.3d 970 (Del.
2016) (TABLE).
24
words, that a defendant was in an actual “confederation” with another conspirator),

but to survive a motion to dismiss, Plaintiff here need only “allege well-pleaded facts

from which I can infer that the alleged [tort] ‘was knowable’ and that [the Devon

Park Entities] were ‘in a position to know it.’”104 This pleading-stage requirement,

I note, requires “well pled” facts supporting an inference that a defendant was in a

position to know of the wrongful conduct. It is not a license to plead parties into the

conspiracy based purely upon conclusory allegations of knowledge or ability to

know.

Deutsche argues that it has stated a claim for fraudulent transfer against

Sebastian and CPR as the underlying unlawful act, and that, in approving the

transfer, the Devon Park Entities were involved. Fair enough. The issue remaining,

however, is whether Deutsche has adequately pled knowing participation in the tort,

even at this pleading stage. In order for an inference to arise that the Devon Park

Entities assisted the shielding of Sebastian’s assets from recovery against the English

Judgment—by Devon GP approving the transfer of the Devon Interest and Devon

LP making and attempting to make distributions to CPR, an entity not subject to the

English Judgment—Deutsche alleges that the Devon Park Entities knew or were

104
Great Hill Equity P’rs IV, LP v. SIG Growth Equity Fund I, LLP, 2014 WL 6703980, at *21
(Del. Ch. Nov. 26, 2014) (quoting Iotex Commc’ns. Inc. v. Defries, 1998 WL 914265, at *4 (Del.
Ch. Dec. 21, 1998)).
25
recklessly indifferent to the English Judgment, 105 but this is simply a conclusory

allegation. As “material inducement” to Devon GP to approve the transfer (and

admit CPR as a limited partner), Sebastian represented to CPR in the Assignment

Agreement that the transfer would not frustrate vested interests or otherwise be

tortious.106 This representation is not itself conclusive, of course, but is significant

in light of the purely conclusory allegations to the contrary. Plaintiff fails to explain

how it was knowable to an entity doing business in Pennsylvania that one of its

limited partners was subject to a money judgment in England. Plaintiff points to (1)

the lack of testing or investigation into the representations made in the Assignment

Agreement, (2) the conflicting statements on who owned CPR, (3) the presence of

Johansson as an agent for both Sebastian and CPR (and Vik Jr.’s continued role after

the transfer) and (4) the failure of wire transfers and the irregular proposals from

CPR for alternative methods, as evidence that the Devon Park Entities should have

been suspicious that the representations made in the Assignment Agreement were

bogus, but that does not make, to my mind, the English Judgment knowable to the

Devon Park Entities, or put the entities in a position to know. Even at the pleading

stage, the “knowable/in a position to know” requirement is designed to allow the

105
Am. Compl. ¶ 244 (“[Devon GP] joined the conspiracy by approving the transfer knowing or
being recklessly indifferent to [the English Judgment]”).
106
Id. ¶¶ 140–41. See representations from Assignment Agreement quoted supra p. 7.
26
court to make a reasonable inference of knowing participation. I find no such

inference justifiable here.

To begin with, Deutsche faults the Devon Park Entities for not testing the

representations made by Sebastian and CPR in the Assignment Agreement. As

noted, this lack of investigation, in the face of assurances to the contrary in the form

of representations, does not in my mind lead to a reasonable inference that the Devon

Park Entities knew of the English Judgment or were recklessly indifferent to it.

Deutsche has not alleged, for example, that the Devon Park Entities’ normal practice

was to conduct such investigation, and it deviated from that practice here.

Deutsche next argues that the conflicting statements on ownership of CPR and

the continued presence of Johansson and Vik Jr. as representatives of CPR should

have given the Devon Park Entities reason to be suspicious. However, Deutsche

does not allege that the Devon Park Entities were told that the Devon Interest was

being transferred to a third party with no connection to Sebastian or Vik Jr.107 In

fact, Deutsche alleges that the Devon Park Entities were told CPR was controlled by

Vik Sr. A more innocuous rendition (at least for the Devon Park Entities) of the

allegations is that a general partner of limited partnership was approached by one of

107
I acknowledge that, as Deutsche notes in its Amended Complaint, Sebastian and CPR claim to
be unrelated entities. Am. Compl. ¶ 15. For purposes of the Devon Park Entities’ Motion to
Dismiss, the relevant facts are what the Devon Park Entities were allegedly told (or not told) about
any connection between Sebastian and CPR, not the position that Sebastian and CPR have taken
in this or other actions.
27
its limited partners, who, for its own reasons, requested to transfer its limited

partnership interest to an entity that appeared to be “related” in some way, and the

general partner granted the request. This does not imply, to my mind, knowing

participation in the tort.

Before turning to the failed distributions, I note that Deutsche conjectures that

the Devon Park Entities participated in the conspiracy for monetary reasons, the

release of the escrow to Devon LP and pre-payment of capital contributions not

already covered by the escrow. The escrow was established in 2012, two years prior

to the Assignment Agreement, and per the Amended Complaint was intended to

cover pre-payment of future capital contributions. The Amended Complaint

contains no allegation as to why the parties deemed an escrow necessary for this

purpose at that time.108 From the immediate release of those escrow funds in 2014

(as opposed to, I assume, the gradual release as capital contributions became due)

and agreement to pre-pay any other capital contributions, I may infer some benefit

to the Devon Park Entities.109 However, I do not find it reasonable to infer from the

fact that the transfer worked a benefit to the Devon Park Entities, that the benefit

was compensation for complicity in a tort. That the Devon Park Entities received

108
The Escrow Agreement itself notes that Devon LP and Sebastian entered in an agreement on
June 18, 2012, which resolved certain disputes between them, and in connection with that
settlement, Sebastian agreed to deposit in escrow certain funds. See Escrow Agreement.
109
But see supra note 45.
28
funds from the release of the escrow and received assurances for any capital

contributions not already covered by that escrow, without more, is unpersuasive. It

appears to reflect only that the Devon Park Entities had pre-existing concerns with

Sebastian’s ability to make capital contributions when due, and when Sebastian

requested to transfer the Devon Interest to what appeared to be a related, but new,

entity, the Devon Park Entities sought to make sure those concerns were still

addressed.

This leaves the Distribution and Attempted Distributions, by which point in

time the Devon Park Entities had already received the release of the escrow and the

additional pre-payment of capital contributions. That is to say, there is no alleged

monetary incentive at the time of the Distribution and Attempted Distributions for

the Devon Park Entities to aid Sebastian and CPR in their tort. The fact that the

distributions (other than the First Distribution) to CPR failed and the Devon Park

Entities were, for a time, willing to engage with CPR to find alternative solutions to

make distributions, despite the red flags of denied wire transfers and suspect

alternative proposals, does not raise a reasonable inference that the Devon Park

Entities did so intending to aid Sebastian and CPR in tortious action against

Deutsche. That Devon LP made one distribution and attempted others, without

more, leads only to the reasonable inference that Devon LP was winding down and

29
making distributions in its normal course to all of its limited partners, of which it

considered CPR one, albeit a problematic one.

I have above analyzed the Devon Park Entities participation in the Assignment

Agreement and the Distribution and Attempted Distributions and found that the

Amended Complaint does not support a reasonable inference that the Devon Park

Entities engaged in those actions with knowledge (or reckless indifference) to the

English Judgment. In other words, Deutsche has insufficiently pled that the Devon

Park Entities acted to aid Sebastian and CPR’s efforts to hide assets from Deutsche.

As a result, I cannot draw a reasonable inference that the Devon Park Entities were

confederates of Sebastian and CPR. Without this first element of civil conspiracy, I

find that Deutsche has failed to state a claim for civil conspiracy against the Devon

Park Entities.

Having dismissed the fraud and conspiracy claims against the Devon Park

Entities on Court of Chancery Rule 12(b)(6) grounds, I need not reach the Devon

Park Entities’ argument on Court of Chancery Rule 12(b)(7). 110

B. Deutsche’s Motion for Sanctions is Denied

Deutsche has, pursuant to Court of Chancery Rule 37, moved to impose

sanctions against Sebastian and CPR for discovery abuses. This Court previously

110
Nor do I need to consider whether the charging order statute, 6 Del. C. § 17-703, provides the
sole remedy against the Devon Park Entities.
30
permitted limited discovery in the case related to jurisdiction over Sebastian and

CPR. That discovery process was marred by dispute, but was completed. Deutsche

seeks to revisit the abuses it alleged in discovery, relying on an English court’s June

24, 2022 Judgment and Order111 and July 15, 2022 Sentencing Judgment (together,

the “English Orders”). 112 The relevant substance of the English Orders is that Vik

Jr. was found to have failed to comply with the English court’s discovery order.

That court found that he did so deliberately, in the English court case against him

(not this instant matter). Deutsche also claims that it first learned of Vik Jr.’s practice

of not retaining emails when it was described in the proceedings for the English

Orders. Per Deutsche, Sebastian and CPR are simply conduits of Vik Jr. and it

reasons, based on the English Orders, that Sebastian and CPR have therefore also

suppressed and altered evidence during the discovery process in this matter.

Deutsche asks that I either award it default judgment against Sebastian and CPR or

find an adverse inference on jurisdiction in its favor and set aside Deutsche Bank I

and Deutsche Bank II.

Sebastian and CPR both argue that Deutsche is simply rehashing the discovery

issues it raised previously, which this court resolved. Sebastian also disputes that

Deutsche was not previously aware of Vik Jr.’s email retention practices.

111
Ex. 1 to Mot. for Sanctions.
112
Ex. 2 to Mot. for Sanctions.
31
I note that discovery was complete in this matter, and importantly such

discovery was limited to jurisdiction. I do not fault Deutsche for bringing its Motion

for Sanctions,113 but I do not find a basis in the English Orders to revisit the alleged

shortcomings in discovery on jurisdiction (much less one that warrants the extreme

measure of awarding default judgment or even an adverse inference that would set

aside Deutsche Bank I and Deutsche Bank II). I fail to find (and Deutsche has not

provided) a nexus between the spoliation that Deutsche alleges is reflected in the

English Orders and the jurisdictional issue that was the only subject of discovery in

this case. In other words, I fail to find evidence related to jurisdiction over Sebastian

and CPR that would have been spoliated (as opposed to evidence that goes toward

the merits of the fraud claim against Sebastian and CPR, which was not the subject

of discovery and which this Court has not reached because I have found that I do not

have jurisdiction over those entities).

Deutsche argues that I should find Harris v. Harris 114 persuasive; in that case,

at the pleading stage, the court found an adverse inference that certain defendants

“participated in [an action] to a degree where it is fair to attribute that Delaware-

directed act to them for jurisdictional purposes,” 115 because their phones, when

imaged, contained no texts (one of the defendants admitted to deleting all texts and

113
And I decline to shift fees under Court of Chancery Rule 37(a)(4)(B) as requested by Sebastian.
114
2023 WL 193078 (Del. Ch. Jan. 16, 2023).
115
Id. at *21.
32
the other refused to answer questions regarding the existence of text messages).116

The court in Harris v. Harris found it was reasonable to infer from the deletion of

the texts that those texts “would show extensive communications that would bolster

the allegations regarding the involvement of [those defendants] in the [Delaware-

directed act].”117 In other words, participation in the action at issue in Harris v.

Harris was the basis to establish personal jurisdiction over those defendants.

However, that is not the case here. Assuming that Vik Jr. purposefully deleted or

concealed emails, it might be reasonable to infer at this pleading stage that those

emails demonstrated that the transfer of the Devon Interest from Sebastian to CPR

was a fraud committed by Sebastian and CPR to conceal Sebastian’s assets from

recovery by Deutsche. However, participation in that fraud by itself (if established

by the foregoing adverse inference) does not confer jurisdiction to this Court over

Sebastian and CPR, under the rationale of Deutsche Bank I and Deutsche Bank II.

And I do not find it reasonable to infer that the alleged spoliated evidence would

otherwise bolster the jurisdictional arguments against Sebastian and CPR (nor was

Deutsche able to provide at oral argument any convincing hypothetical example of

an email or document that was spoliated and would go towards jurisdiction).118

116
Id. at *20. This was in addition to evidence that others allegedly involved also deleted their
texts and where logs showed that the group of individuals exchanged tens of thousands of texts,
including the day before and after an event critical to the action. Id.
117
Id.
118
Tr. 9-9-2024 Oral Arg. on Outstanding Mots. 86:22–89:22, Dkt. No. 509.
33
The issue of spoliation, it appears, has been properly litigated in another

jurisdiction, but the result therefrom does not provide a sufficient basis for reopening

the discovery issues in this case.

C. The Motion for Entry of Partial Final Judgment is Moot

As previewed above, the dismissal of the claims against the Devon Park

Entities now means all claims in the Amended Complaint (and cross-claims) have

been dismissed; the Motion for Entry of Partial Final Judgment is therefore moot as

a full judgment has now been rendered.

III. CONCLUSION

For the reasons stated above, I conclude that Deutsche has failed to state a

claim for fraud or for civil conspiracy against the Devon Park Entities. Therefore,

the Devon Park Entities’ Motion to Dismiss under Court of Chancery Rule 12(b)(6)

is GRANTED. As reasoned above, Deutsche’s Motion for Sanctions is DENIED.

As noted above, Sebastian’s and CPR’s Motions to Dismiss (both against the

Amended Complaint and against Devon LP’s cross-claim) were previously granted.

As a result, no claims remain in Deutsche’s Amended Complaint. Deutsche’s

Motion for Entry of Partial Final Judgment is therefore MOOT.

With regards to the TRO, the relevant parties should confer and agree (or

disagree) on the action to now be taken regarding the Devon Interest, and the extent

34
to which, and how, that interest should be preserved pending an appeal. I will

schedule a brief conference on this issue.

The parties should also submit an appropriate form of order.

35