The opinion of the court was delivered by: SWEET
Defendants Xerox Corporation, Xerox Venture Capital, ("Xerox"), Donald E. Riley, ("Riley"), Leroy W. Haythorn ("Haythorn"), and Microlytics, Inc., ("Microlytics") (collectively, "Defendants") move for summary judgment pursuant to Rule 56, Fed. R. Civ. P., in this securities fraud action filed by plaintiff Unterberg Harris Private Equity Partners, L.P., ("Unterberg"). For the reasons set forth below, Defendants' motion is hereby granted.
Unterberg is formed of a group of limited partnerships specializing in investing with principal places of business in New York and the Netherlands Antilles.
Xerox is a technology firm incorporated in the State of New York.
Microlytics is a now-bankrupt software start-up company funded in large part in the beginning of its existence by Xerox.
Riley, a former executive at Xerox, acted as Xerox's liaison to Microlytics and served on the Board of Microlytics from 1990 until June 19, 1995.
Haythorn, a former Xerox employee for 28 years, was Microlytics' CEO and Chairman from 1993 until February 1996.
Unterberg filed the complaint in this action on October 8, 1996, asserting claims under Section 10(b) ("Section 10(b)") of the Securities Exchange Act of 1934, (the "Act"), 15 U.S.C. § 78j(b), Securities and Exchange Commission ("SEC") Rule 10b-5, 17 C.F.R. § 240.10b-5, ("Rule 10b-5"), Section 20 of the Act, as well as common law claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraud, breach of contract, and civil conspiracy. The action claim arose out of the business failure of Microlytics, of which Unterberg purchased 32.5 million shares in June 1995.
On November 24, 1997, Defendants filed the instant motion for summary judgment. Oral argument was heard on December 17, 1997, at which time the motion was deemed fully submitted.
In June 1995, Unterberg invested $ 2.55 million in Microlytics, a company engaged in software research, development and marketing, which was backed by Xerox. Microlytics was founded in 1985 primarily as a software firm. Xerox gave Microlytics approximately $ 9 million over the first ten years of its existence as part of a larger project to fund small start-up companies whose orientation towards high technology fell outside of the usual business description of Xerox. In part to help the fledgling company grow and in part to keep an eye on its investment, Xerox placed Riley, a long-time Xerox employee, on Microlytics' Board in 1990. In June 1995, Riley resigned from Xerox, and thus from Microlytics' Board, and ...