theory generally is unavailable where the parties' rights and liabilities are governed by an express contract, DePinto v. Ashley Scott, Inc., A.D.2d , , 635 N.Y.S.2d 215, 216-17 (1st Dep't 1995), Johnson v. Michigan Mut. Life Ins. Co., 183 Mich. App. 277, 454 N.W.2d 128, 130 (Mich. Ct. App. 1989), that claim is not viable. AA does not otherwise challenge any of the other state common law claims on their individual merits. Accordingly, summary judgment is granted in favor of AA as to the claim for unjust enrichment, and is denied as to the rest of the state common law claims, except to the extent stated above in Part II of this opinion.
B. Securities Fraud under Rule 10b-5
The Trustee's claim under Rule 10b-5 is based on the sale of DMCL preferred stock in conjunction with the Master Agreement and the sale of the DRLP limited partnership interests. The Trustee has dropped his claim based on the March 1980 modification of the NIDA put. (Pl. Mem. at 146 n.60)
For the reasons stated in the DED Opinion, Slip Op. at 17-22, the Rule 10b-5 claim is foreclosed with respect to DED's purchase of DMC shares pursuant to the Master Agreement.
To recover damages based on the September 1978 sale of the DRLP limited partnership interests, DMC must be either a purchaser or a seller of those interests. Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 749-755, 44 L. Ed. 2d 539, 95 S. Ct. 1917 (1975). In Capri v. Murphy, 856 F.2d 473 (2d Cir. 1988), the Second Circuit held that the general partners of a limited partnership could be deemed the "sellers" of the limited partnership interests under § 12(2) of the Securities Act of 1933, 15 U.S.C. § 771(2). Section 12(2) is an anti-fraud provision reaching "any person who . . . offers or sells a security." Rule 10b-5 is a similar provision promulgated under the 1934 Act that imposes liability for fraud "in connection with the purchase or sale of any security." Although the language in the two provisions is not identical, there is no reason to believe that the concept of who is a "seller" for purposes of federal securities fraud liability in the 1934 Act is any different from the same concept for similar purposes under the 1933 Act.
However, even if DMC can be deemed a seller of the DRLP limited partnership interests, DMC still was not defrauded "in connection with" the sale of those interests. In fact, DMC received nearly $ 18 million as a result of that securities transaction. The Trustee's complaint is not that as the seller, DMC was defrauded into accepting less than fair market value for the DRLP limited partnership interests. The Trustee argues that "the DRLP proceeds which were raised by DMC to use for research and development were embezzled instead." (Pl. Mem. at 153; Compl. P 38) The Trustee relies heavily on Superintendent of Ins. of State of N.Y. v. Bankers Life & Cas. Co., 404 U.S. 6, 30 L. Ed. 2d 128, 92 S. Ct. 165 (1971). In Bankers Life, the successor to an insolvent insurance company sued a different insurance company that had purchased securities from the insolvent firm. The plaintiff claimed that even though the purchasers had paid the fair market value of the securities at the time of the sale, the selling company had been defrauded because the company never received the proceeds of the sale. Through a complex series of transactions, the purchasers managed to pay for the securities "not with their own funds, but with [the insolvent company's] assets." Id. at 7. The Supreme Court permitted recovery under Rule 10b-5 because "the seller was duped into believing that it, the seller, would receive the proceeds." Id. at 9. Thus, the company was "injured as an investor through a deceptive device which deprived it of any compensation for the sale of its valuable block of securities." Id. at 10.
Bankers Life is distinguishable. Unlike the seller in Bankers Life that never received the proceeds of the sale, DMC here did receive the proceeds of the DRLP offering on September 22, 1978. The Trustee's complaint is that DeLorean later embezzled some of the proceeds in November 1978 and January 1979. This situation bears more resemblance to the facts of In re Investors Funding Corp. of New York Secs. Litig., 523 F. Supp. 533 (S.D.N.Y. 1980). There, a bankruptcy trustee sued the bankrupt company's former auditors under Rule 10b-5 to recover funds received in a securities offering that the company's management subsequently misappropriated. The Court explained that "such a claim is essentially a state law claim of corporate mismanagement and breach of fiduciary obligations, and  the connection to a securities transaction is too tenuous to form the basis for a claim under the federal securities laws." Id. at 539; Bloor v. Carro, Spanbock, Londin, Rodman & Fass, 754 F.2d 57, 62 (2d Cir. 1985) (injury suffered by bankrupt corporation allegedly in connection with securities transaction "occurred later, after the securities transactions were completed, when the proceeds of those transactions were allegedly funneled into unwise investments or diverted to the personal use" of the company's controlling stockholders); Rochelle v. Marine Midland Grace Trust Co. of New York, 535 F.2d 523, 528-29 (9th Cir. 1976) (bankruptcy trustee cannot sue company's accountants to recover proceeds of securities offering that later were "frittered away").
Because the injury the Trustee complains of was not suffered "in connection with" the only remaining securities transactions on which the Rule 10b-5 claim might be premised, AA is entitled to summary judgment on that claim.
C. Aiding and Abetting Securities Fraud under Rule 10b-5
In view of the Supreme Court's recent holding that there is no private civil liability under Section 10(b) and Rule 10b-5 for aiding and abetting securities fraud, summary judgment is granted in favor of AA on that claim. See Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 128 L. Ed. 2d 119, 114 S. Ct. 1439, 1455 (1994).
D. Violation of 18 U.S.C. § 1962(c) (RICO)
For the reasons stated in the DED Opinion, Slip. Op. at 31-49, summary judgment is granted in favor of AA on the Trustee's RICO claim under 18 U.S.C. § 1962(c).
E. Violation of 18 U.S.C. § 1962(a) (RICO)
The Trustee informs the court in his Memorandum of Law that he "will not be pursuing his claim for a violation of 18 U.S.C. § 1962(a) at trial." (Pl. Mem. at 165 n.168) Accordingly, summary judgment is granted in favor of AA on that claim.
F. Aiding and Abetting RICO Violations
Because I have found that there is no private civil cause of action for aiding and abetting a RICO violation, see DED Opinion, Slip. Op. at 58-65, summary judgment is granted in favor of AA on that claim.
G. Violation of Mich. Comp. Laws § 600.2919a
Mich. Comp. Laws § 600.2919a provides: