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June 15, 2005.


The opinion of the court was delivered by: JED RAKOFF, District Judge


Plaintiff Eclaire Advisor Ltd. ("Eclaire") is Trustee for the Daweoo International (America) Corporation Creditor Trust (the "Creditor Trust"), which was established on March 13, 2002, by order of the Bankruptcy Court for the Southern District of New York, for the purpose of collecting and distributing certain assets of Daweoo International (America) Corporation ("DWA") to its creditors. Eclaire brings this action against defendant Daewoo Engineering & Construction Co., Ltd. ("DWEC") to recover approximately half a billion dollars worth of unpaid loans extended by DWA to Daewoo Corporation ("DWC"). Plaintiff alleges six causes of action: successor liability (Counts 1 and 2), unjust enrichment (Count 3), fraudulent conveyance pursuant to Section 276 of the New York Debtor and Creditor Law (Count 4), fraudulent conveyance pursuant to Section 274 of the New York Debtor and Creditor Law (Count 5), and fraudulent conveyance pursuant to Section 273 of the New York Debtor and Creditor Law (Count 6). See Am. Compl. ¶¶ 70-112. Shortly after this lawsuit was commenced, defendant moved to dismiss the Complaint based on (1) lack of personal jurisdiction, (2) lack of subject matter jurisdiction, (3) forum non conveniens, (4) international comity, (5) res judicata, (6) failure to state a claim under Korean law, and (7) failure to state a claim under New York law. On February 10, 2005, the Court held argument on these motions, during which it became apparent that further discovery and additional briefing would be required with respect to the issue of personal jurisdiction. See transcript, February 10, 2005. Following such discovery and further briefing, the Court, on May 20, 2005, denied defendant's motion in its entirety. See Order dated May 20, 2005. This Memorandum will set forth the reasons for that ruling.

While the aspects of the motion directed at alleged failures to state a claim must be decided on the pleadings, the Court may, and has, considered facts outside the pleadings as to the other aspects. The relevant facts are as follows:

  DWA, a New York corporation with its principal place of business in Ridgefield Park, New Jersey, was (prior to bankruptcy) the American trading arm and a wholly-owned subsidiary of DWC, one of the companies comprising the Daewoo Group, which itself is one of Korea's largest industrial conglomerates. See Corrected Amended Complaint ("Am. Compl.") ¶¶ 1-2, 43. Between 1998 and 1999, DWA made approximately fifty-nine separate loans totaling $533,817,368.06 to DWC, which at the time was facing severe financial difficulties in connection with the Asian financial crisis. See id. ¶¶ 46-47 & Ex. A. Each loan was to be repaid within one year of its disbursement. See id. ¶ 50 & Ex. A.

  In August 1999, it became apparent that DWC would not be able to make good on its loan commitments to DWA and other lenders. DWC and its affiliates, therefore, sought relief from the lenders through a "workout." See id. ¶ 51. DWC's subsequent failure to repay any of these loans in turn caused DWA to be faced with its own financial difficulties. See id. ¶ 55; Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Dismiss ("Pl. Mem.") at 3. Soon thereafter, on March 17, 2000, DWA filed for Chapter 11 bankruptcy. See In re Daewoo International (America) Corp., No. 00-11050 (Bankr. S.D.N.Y.).

  In July 2000, as part of a Workout Agreement entered into by DWC and its affiliates on March 15, 2000, see Exhibit E at 58 (Workout Agreement) attached to Affidavit of Jin Yeong Chung, December 22, 2004 ("Chung Aff."), the shareholders of DWC ratified a proposal to spin-off DWC's assets (the "Spin-Off"), pursuant to certain provisions of Korean Law (the "Commercial Act"), see Pl. Mem. at 3; Debtor's Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code for its Amended Plan of Reorganization ("Disclosure Statement") at 16, attached as Exhibit 11 to Declaration of James L. Bromley, December 23, 2004 ("Bromley Decl."). The Spin-Off resulted in DWC being split into two separate, newly formed companies, namely, (1) Daewoo International Corporation ("DWIC"), which took over certain assets and related liabilities of DWC's trading operations, and (2) Daewoo Engineering & Construction Co., Ltd. ("DWEC"), which took over certain assets and related liabilities of DWC's construction and engineering operations and businesses. See id.; Memorandum of Law in Support of Defendant's Motion to Dismiss ("Def. Mem.") at 4; Am. Compl. ¶¶ 59-62. As a result, DWC was no longer able to satisfy its financial obligations to DWA, and, DWA, in turn, was unable to satisfy the claims of its creditors. See Am. Compl. ¶¶ 53-62.

  On July 24, 2000, in accordance with the Commercial Act, DWC sent written notice of the approval of the Spin-Off, and gave its creditors until August 24, 2000 to object to the Spin-Off. See Notice to Creditors of Daewoo Corporation, July 24, 2000, attached as Exhibit 2 to Bromley Decl.; Commercial Act Arts. 232 & 527-5, attached as Exhibit D to Chung Decl. On August 23, 2000, DWA timely objected to the Spin-Off, pursuant to the Commercial Act. See Letter of Scott E. Ratner, Esq., August 23, 2000, attached as Exhibit 3 to Bromley Decl.; Disclosure Statement at 22. Nonetheless, the Spin-Off went forward on December 27, 2000, leaving DWA's objection unresolved. See Disclosure Statement at 22

  The Commercial Act provides that parties who timely file objections to a Spin-Off but whose objections are not resolved prior to the effective date of the Spin-Off may bring legal action to nullify the Spin-Off within six months of such date, here by June 27, 2001. See Commercial Act Arts. 529-2. Accordingly, in early March 2001, two trade creditors of the Creditors Committee from the DWA bankruptcy filed a lawsuit on behalf of DWA seeking an equitable order nullifying the Spin-Off on the ground that it had been completed in violation of Korean law (the "Objection Litigation"). See Complaint in Objection Litigation, attached as Exhibit 6 to Bromley Decl ("Complaint in Objection Litigation") at 3-4. In addition, they applied to the U.S. Bankruptcy Court for permission to commence adversary proceedings in the United States against future Trust beneficiaries. See Def. Mem. at 7.

  On March 20, 2001, after the commencement of the Korean litigation but before the Bankruptcy Court could rule on the aforesaid application, all legal challenges were resolved by stipulation (the "Spin-Off Settlement"). See Order Approving Stipulation By and Among Debtor, Official Committee of Unsecured Creditors, Daewoo International Corporation, Korean Asset Management Corporation and Korea Exchange Bank Regarding Plan Term Sheet, Plan Funding, and Exclusivity and Among Claims Issues, March 20, 2001 (Spin-Off Settlement), attached as Exhibit H to Affidavit of Robert A. Weiner, January 21, 2005 ("Weiner Aff."). Among other things, the Spin-Off Settlement provided that the parties would submit a Plan of Reorganization, pursuant to which (a) DWA's claims to trade creditors would be substantially paid and (b) a Creditor Trust would be created to pursue and collect assets to satisfy the claims of DWA's other creditors. The Spin-Off Settlement contained a release (the "Limited Release") of many of the claims asserted against DWC, DWEC and DWIC. In particular, the Limited Release not only provided that Creditors Committee would withdraw its objection to the Spin-Off and dismiss the entire Korean Litigation with prejudice, but also permitted one, specific carve-out, viz., the ability to collect monetary claims from DWC, DWEC, and DWIC:
[DWA, the Creditors Committee and each holder of an Unsecured Trade Claim] will release and waive all claims and causes of action relating to, or arising from, the restructuring and Spin-Off . . . provided, however, that such release and waiver will not extend to or cover collection claims, whether asserted under U.S. law or Korean law, that DWA has or may have against [DWC], DWIC or DWEC for monetary obligations that are due and owing. . . .
In addition, upon entry of an Order by the Court approving the Stipulation incorporating this Term Sheet and the funding of the Unsecured Trade Creditors Escrow Account, the Creditors Committee shall withdraw its objection to the listing of the stock of [DWC], DWIC and DWEC and discontinue its prosecution and dismiss with prejudice all litigation filed in Korea by the Creditors Committee against [DWC], DWIC, and DWEC. Not withstanding the foregoing, DWA's objections to the Spin-Off shall not be withdrawn.
Spin-Off Settlement at 17-18.*fn1 Thereafter, plaintiff then withdrew its lawsuit in Korea with prejudice, stating in its withdrawal papers, that DWA would not file "any lawsuit related to the Nullification of Spin-Off again." Weiner Aff. at Ex. J.

  In February 2002, the Bankruptcy Court confirmed DWA's Plan of Reorganization. See Confirmation Order, attached as Exhibit L to Weiner Aff. On March 22, 2002, as required by the Plan and the Confirmation Order, DWA entered into a "Creditor Trust Agreement" that, inter alia, created the Creditor Trust. See Lee Aff. Ex. B, § 1.1. The net effect of the creation of the Trust was that DWA transferred title and interest in its assets to the Creditor Trust in order to liquidate the assets of DWA. See Bromley Decl. Ex. 12 (DWA Plan), at 29 & Ex. 13 (Conf. Order) ¶ 18. This suit by the trustee, Eclaire, to collect on the still unpaid loans followed.

  Against this background, the Court considers each of the seven grounds of defendant's motion to dismiss:

  1. Personal Jurisdiction. Defendant DWEC first argues that the Court lacks personal jurisdiction over it. In response, Eclaire argues that this Court has personal jurisdiction because DWEC's New York-based subsidiary, Daewoo America Development, Inc. ("DADI"), is doing business in New York and DWEC controls and runs DADI as if it mere a mere department of DWEC and/or because DADI is serving as DWEC's New York agent. See Plaintiff's Supplemental Memorandum in Opposition to Defendant's Motion to Dismiss for Lack of Personal Jurisdiction, April 8, 2005, at 1, 30.

  As to the first alternative, under New York law, which governs this issue, the determination whether a subsidiary is a "mere department" of the parent requires examination of four factors. See Volkswagenwerk Aktiengesellschaft v. Beech Aircraft Corp., 751 F.2d 117, 120-122 (2d Cir. 1984):
The essential factor is common ownership. . . . The second factor is financial dependency of the subsidiary on the parent corporation. . . . The third factor is the degree to which the parent corporation interferes in the selection and assignment of the subsidiary's executive personnel and fails to observe corporate formalities. . . . The fourth factor is the degree of control over the marketing and operational policies of the subsidiary exercised by the parent.

  The first factor is clearly met, as DADI is a 100%-owned subsidiary of DWEC, with its principal place of business in New York City. See deposition of Chang-Mo Lee, March 10, 2005 ("C.M. Lee Dep."), at 26:4-27:7, 29:17-30:10, 82:14-16, attached as Exhibit 3 to Affidavit of B. Ted Howes, April 8, 2005; see also Beech Aircraft ...

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