The opinion of the court was delivered by: Scheindlin, District Judge.
Reiss is currently — and has been since at least 1990 — a
licensed real estate broker who has been engaged in the
commercial real estate business for more than fifteen years.
See Cmplt. at ¶ 8; Certificate of State of New York, Department
of State certifying Reiss' status as individual broker, attached
as Exh. B to Plaintiff's Memorandum of Law in Opposition to
Motion to Dismiss of Defendant UIS ("Pl's UIS Opp."). From 1989
to 1993, he was associated with the firm Sonnenblick-Goldman.
See Cmplt. at ¶ 21.
All of the defendants are corporations organized under the laws
of France.*fn1 UIS acquires commercial and industrial real
estate for lease back to other companies, and it is an approved
SICOMI (a company specializing in real estate investment for
business and industry) pursuant to French law. See id. at ¶ 12.
UIC, at the times relevant to this dispute, was a financial
institution that held a substantial real estate portfolio. See
id. at ¶ 14. Société is wholly owned by the government of
France. See Memorandum of Law in Support of the Motion to
Dismiss of Defendant Société ("Société Mem.") at 2. GAN S.A.,
a holding company, is currently the parent of a group of French
companies involved in the insurance business. See Exhibit A to
Memorandum of Law in Support of Motion to Dismiss GAN S.A. ("GAN
In 1992, the year that the alleged oral contract was formed,
GAN S.A. was a wholly owned subsidiary of Société. See Cmplt.
at ¶ 4. GAN S.A., in turn, wholly owned UIC. See id. GAN S.A.
also owned 94.47% of UIS — 4.47% directly, 47.30% through UIC and
47.17% through other affiliates. See id.*fn2 In 1997, prior to
the sale of UIC and UIS to GECC, GAN S.A.'s shares of UIC were
transferred to Société. See Plaintiff's Memorandum of Law in
Opposition to Motion to Dismiss of GAN S.A. ("Pl's GAN S.A.
Opp.") at 11 n. 8.
UIS, together with FINABAIL, another company owned by GAN S.A.,
and two other companies — all of which were involved in real
estate — were collectively known as Groupe Percier. See Cmplt.
at ¶ 4.
B. Reiss' Involvement in Sale of UIS and UIC
For purposes of this motion, the following facts, drawn from
the Amended Complaint, are assumed to be true. Reiss has had an
almost twenty-year personal and professional relationship with
Alain Juliard, the Chairperson of UIS. See id. at ¶ 19. In or
about April 1992, Reiss, on behalf of his firm's client United
States Surgical Corporation ("USSC"), arranged for UIS to provide
approximately 483,910,000 French francs in financing to USSC for
its European headquarters and distribution and training facility
near Paris. See id. at ¶¶ 26-28. During the transaction, Reiss
told Juliard that his firm, Sonnenblick-Goldman,
expected to receive from USSC a 1% fee — its customary
arrangement — for its work in that kind of transaction. See id.
at ¶ 27. At the close of the transaction, Reiss sent a copy of
Sonnenblick-Goldman's bill to Juliard, who assisted him in
collecting the fee from USSC. See id. at ¶¶ 28-29.
In or about July 28 or 29, 1992, Juliard visited New York in
connection with the USSC transaction. As Juliard, Reiss, and UIS'
Financial Director, Philippe Rosio ("Rosio"), rode back from a
meeting, Juliard advised Reiss that "GAN"*fn3 had authorized
Juliard to explore opportunities to reduce GAN's real estate
holdings in France, including GAN's position in UIS and/or
FINABAIL. See id. at ¶ 33. "Prior to this drive, Juliard had
repeatedly told Reiss that, before he undertook any actions with
respect to any important matters, GAN required him to obtain its
approval." See id. During the drive, Juliard explained that
defendants' goal was to have a United States corporation make a
"substantial investment" in UIS and/or FINABAIL. The best way to
accomplish this end, defendants believed, was to convince a U.S.
company to enter into a joint venture with defendants or make an
initial investment in UIS and/or FINABAIL, which would allow the
U.S. company to become familiar with GAN's holdings and the
French real estate market. See id. at ¶ 35. Juliard and Reiss
then entered into an oral contract:
Juliard told Reiss that defendants would like to
retain Reiss to find one or more United States
corporations to participate in transactions with
defendants and/or to acquire an interest in GAN's
holdings in UIS and/or FINABAIL.
The proposed engagement was broad and not limited to
any specific transaction or time period or type or
source of capital.
Reiss accepted the engagement upon defendants'
commitment that, if he succeeded in introducing a
company that resulted in any transaction with
defendants, defendants would pay his fee of 1% on any
large transaction, like the USSC deal, and 2%-3% on
any smaller transaction.
Juliard agreed that defendants would pay Reiss the
foregoing fees for a successful transaction.
Id. at ¶¶ 36-39. This agreement was never reduced to writing.
According to Reiss, he subsequently began performing services
that ultimately led to GECC's purchasing UIC and UIS. Initially,
Reiss contacted Richard Grimaldi ("Grimaldi"), an executive in
GECC's Real Estate Division with whom he had a relationship, in
an attempt to interest GECC in reentering the French commercial
real estate market by participating in transactions with, or
acquiring an interest in, Groupe Percier. See id. at ¶ 43.
Juliard and Rosio, in consultation with Reiss, decided to
encourage GECC, as an initial matter, to acquire GAN's shares in
FINABAIL, with the hope that such transaction would lead to other
deals or a more substantial investment by GECC in Groupe Percier.
See id. at ¶ 52.
In a subsequent conversation between Grimaldi and Reiss,
Grimaldi suggested that Groupe Percier submit a written
presentation for him to circulate within GECC. See id. at ¶¶
47-48. Rosio, in consultation with Reiss — who provided multiple
comments — prepared a written presentation relating to an
investment in FINABAIL by GECC. See id. at ¶¶ 53-58. Reiss
delivered the presentation to Grimaldi. See id. at ¶ 58. He
also provided Grimaldi a copy of UIS' annual report he received
from Rosio. In addition, around this time Reiss contacted
approximately two hundred other U.S. companies that had invested
or planned to invest in
France in an attempt to interest them in Groupe Percier's
activities. See id. at ¶¶ 61-62.
Around July 1993, Reiss joined Allied Partners, Inc., a company
formed to manage and invest in real estate. See id. at ¶ 66. In
September 1993, following Grimaldi's expression of GECC's
interest in pursuing a transaction with defendants, Reiss
arranged a meeting in New York among himself, Juliard, Rosio,
Grimaldi and Richard H. Powers ("Powers"), Managing Director of
Commercial Property Financing for GECC in Europe. See id. at ¶¶
75-79. Prior to the meeting, while Juliard, Rosio and Reiss
discussed strategy, Juliard informed Reiss that "he had spoken to
GAN about UIC, and GAN had communicated to Juliard that GAN
wanted Juliard, on behalf of GAN and UIC, to seek to interest
GECC in the acquisition of part or all of UIC," either for its
own business or as a means to acquiring UIS. Id. at ¶ 78.
"Juliard then explained that GAN would be extremely pleased with
any GECC interest in any part of UIC, and asked Reiss, pursuant
to Reiss' engagement, to help UIC, GAN, and Juliard stimulate
GECC's interest in an acquisition in UIC as well as UIS." Id.
At the meeting, Rosio and Juliard pitched to GECC the prospect of
acquiring an interest in UIS and FINABAIL, possibly through the
acquisition of an interest in UIC. See id. at ¶ 80.
A few months later, Reiss and Juliard agreed that Reiss, in
representing Groupe Percier's interests, would operate under the
joint name "Groupe Percier-Allied Partners," which listed its
address as Reiss' office in New York. Prior to agreeing to this
arrangement, Juliard and Rosio had informed Reiss that they had
obtained the required approval from GAN in order to proceed in
this manner. See id. at ¶¶ 67-72. Shortly thereafter, Juliard
informed Reiss that GAN had authorized Reiss to open a bank
account in the name of Group Percier-Allied Partners in New York,
which Reiss subsequently opened at Chase Manhattan Bank. See
id. at ¶ 73.
Between October 1993 and March 1994, defendants and GECC had
periodic discussions by telephone and at meetings in Europe
regarding a potential GECC acquisition of UIC and/or UIS stock.
See id. at ¶ 83. Juliard and Rosio kept Reiss apprised of these
dealings, sending him copies of correspondence between Groupe
Percier and GECC. See id. at ¶¶ 82-87. In April 1994, GECC
executed confidentiality letters relating to information about
UIS and UIC, which had been approved by GAN. See id. at ¶¶
88-93. During this time, Juliard and Rosio also instructed Reiss
to continue soliciting other potential investors and provided him
with UIS dividend information. See id. at ¶ 94.
On June 1, 1994, at the request of Rosio, Reiss attended a
meeting in New York among Michael Fraizer, a senior officer of
GECC's Real Estate Division, Juliard and Rosio. See id. at ¶¶
95-98. On September 13, 1994, Reiss attended a meeting at the
Hotel Vernet in Paris (the "Hotel Vernet Meeting") among Fraizer,
Powers, Juliard, Rosio and Guy de Chavanne, the Director General
of GAN S.A. and Director General of Société. At this meeting,
GECC's potential investment in UIS and UIC was discussed. See
Cmplt. at ¶¶ 107-110. Juliard, Rosio and Arline Gaujal, a
director of UIS, met with Reiss in New York in October 1994 to
discuss, among other things, matters involving GECC. See id. at
Reiss also continued to speak frequently with Grimaldi,
attempting to maintain GECC's interest in the UIS and UIC
transactions, and to speak regularly with Juliard and Rosio. See
id. at ¶¶ 123, 129-30, 132. According to Reiss, from 1993 to
February 1997, he "devoted a substantial portion of his time to
promoting defendants' interests and represented no other
clients." Id. at ¶ 131.
In mid-1996, as it appeared increasingly likely to Reiss and
Juliard that GEEC would acquire an interest in UIS and/or UIC,
Reiss arranged for Juliard and Rosio to meet with legal counsel
in New York. See id. at ¶¶ 124-25. On or about July 25, 1996,
while Juliard and Rosio were in New York, "Rosio acknowledged
that Reiss would be entitled to his fee when the deal was
accomplished." See id. at ¶ 126.
In February 1997, GAN publicly announced a restructuring plan
that included selling its interest in UIS and UIC; this plan was
approved in July 1997. See id. at ¶¶ 133-34. Pursuant to the
requirements of French law, GAN retained Lazard Freres as a
financial advisor to make information relating to UIS and UIC
available for inspection and to solicit bids for the sale of the
companies. See id.
Starting in July 1997, at Juliard's request, Reiss contacted
other potential investors, and was successful in generating
interest in the Blackstone Group, an investment firm. See id.
at ¶ 136. Blackstone sought reassurance from Reiss that any fee
arising from the transaction would be paid by defendants. Thus,
on September 17, 1997, Reiss wrote to Juliard and Rosio to
confirm that Reiss would be entitled to his fee of 1% if UIS
entered into a deal with Blackstone. See id. "Although Rosio
initially attempted to shift responsibility for payment of
Reiss's 1% fee to Blackstone, at no time did Juliard or Rosio
ever object to the amount of the fee or Reiss's entitlement
thereto. Shortly thereafter, Rosio and Juliard agreed that
because, as Reiss noted, he had `always represented UIS for the
past 4 years,' defendants, not Blackstone, were responsible for
Reiss's fee." Id. at ¶ 137.
In late 1997, Grimaldi informed Reiss that GECC had agreed to
acquire UIS. "In an attempt to be paid expeditiously and without
an adversarial process," Reiss sent an invoice, dated January 7,
1998, addressed to Juliard, Rosio, Powers, and Ronald Pressman,
President of Commercial Real Estate at GECC, for $1 million, a
"substantially discounted amount." At that time, Reiss was not
aware of the amount of the UIS transaction or the fact that GECC
was acquiring an interest in UIC in addition to UIS. See id. at
¶ 141. In response to the invoice, Juliard conceded that Reiss
had introduced him and Rosio to Powers in 1993 and that out of
courtesy, they had kept Reiss informed of their relationship with
GECC. He asserted, however, that Reiss' involvement was