United States District Court, Southern District of New York
March 27, 2003
MERRILL LYNCH INVESTMENT MANAGERS, PLAINTIFF,
OPTIBASE, LTD., DEFENDANT.
The opinion of the court was delivered by: Laura Taylor Swain, United States District Judge
By supplemental submission dated November 25, 2002, Plaintiff requests that the Court, notwithstanding its September 10, 2002 Order preliminarily enjoining Defendant from proceeding with arbitration of its claims against Plaintiff before the New York Stock Exchange and the pending appeal of that order, address the merits of Plaintiff's second cause of action and declare Defendant's claims against Plaintiff to be derivative claims under the law of the Cayman Islands. For the following reasons, Plaintiff's application is denied.
Arbitration against Plaintiff has been stayed. The claims Plaintiff argues are derivative are not currently being pressed in any arbitration or action to which Plaintiff is a party. It is therefore inappropriate to address Plaintiff's standing arguments now. If the Court's decision is upheld on appeal and the mismanagement claim is not being asserted by Optibase in any other forum there may not be a live case or controversy regarding the viability of the allegedly derivative causes of action as against Plaintiff. Furthermore, if the Court's decision is reversed, the question of whether the issue on which Plaintiff currently seeks a declaration is itself arbitrable may be raised.
The Court has addressed the discovery implications of the derivative claim controversy in connection with Defendant's ongoing arbitration against Merrill Lynch & Co., Inc. and Merrill, Lynch, Pierce, Fenner & Smith Incorporated in the Court's Memorandum Order, dated March 27, 2003, in Civil Action No. 02 Civ. 9813.
Accordingly, this case is hereby put on suspense pending the Second Circuit's decision on Defendant's appeal.
© 1992-2003 VersusLaw Inc.