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Rigroup LLC v. Trefonisco Mgmt., Ltd.

United States District Court, S.D. New York

June 7, 2013

RIGROUP LLC et al., Plaintiffs,

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For Rigroup LLC, Janna Bullock, Plaintiffs: Joel E. Abramson, New York, NY; Stuart A. Smith, Law Offices of Stuart A. Smith, New York, NY.

For Alexander Esin, Defendant: Bertrand Charles Sellier, Vandenberg & Feliu, LLP, New York, NY; Daniel Joseph Rothstein, Law Office of Daniel J. Rothstein, P.C, New York, NY.

For Gorsoan Limited, Vitaly Sirotkin, Defendants: Thomas John Quigley, LEAD ATTORNEY, Winston & Strawn LLP (NY), New York, NY; William Gordon Dobie, LEAD ATTORNEY, PRO HAC VICE, Nicholas Ryan Alioto, Winston & Strawn LLP, Chicago, IL.


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JESSE M. FURMAN, United States District Judge.

Plaintiffs Janna Bullock, a Russian national now living in New York, and RIGroup LLC (" RIGroup USA" ) bring this

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action for misappropriation and conversion, fraud, conspiracy to defraud, and breach of fiduciary duty, against Defendants, a group of Russian and Cypriot nationals and entities. At bottom, Plaintiffs allege that Defendants, virtually all of whom are Russian citizens living in Russia, conspired to loot a Russian corporation owned and controlled by Plaintiffs. Three Defendants -- Alexander Esin, Vitaly Sirotkin, and Gorsoan Limited -- now move to dismiss the complaint on the grounds of forum non conveniens, asserting that Russia is a more appropriate forum for litigation of Plaintiffs' claims. (Docket Nos. 22, 47). For the reasons discussed below, Defendants' motions are granted and the Complaint is dismissed.


On a motion to dismiss for forum non conveniens that is decided without a factual hearing, a court must accept the facts alleged in the complaint as true. See, e.g., Aguas Lenders Recovery Grp. LLC v. Suez, S.A., 585 F.3d 696, 697 (2d Cir. 2009). The court may, however, consider certain evidence outside the pleadings, including affidavits. See id. at 697-98 n.1. Accordingly, the following facts are drawn from the Complaint and assumed to be true or, where noted, from affidavits submitted by the parties.[1]

Bullock is a Russian national who previously lived or spent significant time in Moscow, but is now a naturalized United States citizen living in New York City. (Bullock Decl. ¶ ¶ 9, 11 (Docket No. 32); Rothstein Affirm. Ex. D ¶ 11 (Certified Translation to English of Esin Affidavit)).[2] Bullock's ex-husband, Alexei Kuznetsov, was formerly the Minister of Finance of the Moscow Region. (Bullock Decl. ¶ 11). RIGroup USA is a Delaware limited liability company, which was reactivated in 2009 after having become defunct. (Compl. ¶ 32; Rothstein Affirm. Ex. G). Its sole member is Bullock. (Compl. ¶ 32). Through RIGroup USA and other companies she owns, Bullock " engages in real property development and investment in various locations throughout the world." ( Id.). Most relevant here, until the events giving rise to this lawsuit, RIGroup USA owned a controlling interest in OOO RIGroup (" RIGroup Russia" ), a Russian real estate company. ( Id. ¶ ¶ 20-21, 33-34). RIGroup Russia, in turn, had " significant assets, including thousands of hectares of land real property [sic] assets valued at the close of 2007 at over 3 billion Russian Rubles," and " held significant real estate assets and development rights in and around Moscow." ( Id. ¶ ¶ 33-34). Bullock was also the " lawful and legitimate owner and shareholder of a number of additional corporate entities (and corporate assets) located in Russia," and RIGroup Russia " held a significant shareholder interest in a valuable subsidiary company." ( Id.).

Plaintiffs allege that, in 2008 and at all relevant times, Defendants Esin and A.V. Belov were both the " Director General (or Chief Executive Officer) of RIGroup Russia" and therefore owed fiduciary duties to Plaintiffs. ( Id. ¶ ¶ 35-36). Plaintiffs further allege that in August 2008, Esin and Belov, with their coconspirators, " fabricated a company-initiated 'buyout' in which Bullock (or the companies she controlled, including RIGroup USA) purportedly agreed to accept shares of an affiliated company Rosweb in exchange for her shares of RIGroup Russia." ( Id. ¶ 37). As a result of the " buyout," Esin, Belov, and their co-conspirators " wrested control of RIGroup Russia[ ] and looted its assets."

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( Id. ¶ 44). To formalize the takeover, the Complaint alleges, Esin and Belov filed false corporate disclosures with the Russian authorities indicating that a newly formed Cypriot entity, Amytal Holdings Ltd., was the owner of 98% of RIGroup Russia. ( Id.). Plaintiffs contend that this was an example of " corporate raiding," an activity that has allegedly become prevalent in Russia and that generally involves the falsification of corporate records, the theft of companies and assets, and the use of the criminal justice system to bring false charges against target companies and controlling owners. (Bullock Decl. ¶ ¶ 2-5); see also id . Exs. 12-17 (articles describing the practice of corporate raiding in Russia)).

According to the Complaint, Esin, Belov, and their co-conspirators further " created and falsified a number of purported loans, due and owing to RIGroup Russia, from Ms. Bullock and certain of her additional companies located outside of Russia." (Compl. ¶ 46). Esin, Belov, and their co-conspirators -- through their companies, Defendants Trefonisco Management Limited,, and Gorsoan -- " purported to buy these fraudulent loans . . . from RIGroup Russia for little or no consideration." ( Id. ¶ 47). On a number of occasions, Esin then attempted to extort Plaintiff to pay off a portion of the fraudulent loans on threat of enforcement of the loans. ( Id. ¶ ¶ 9-12, 49). The Defendants and their coconspirators allegedly also " stole and converted the assets of a number of Plaintiff's other companies, including Rosweb, a venture capital fund established in 2007 and worth hundreds of millions of Euros." ( Id. ¶ 50). The raiders illegally transferred control of Rosweb to the ORSI Group through false corporate documents, including " powers of attorney," and the ORSI Group then divested Rosweb of its assets. ( Id. ¶ ¶ 53-54).

On or about July 29, 2009, Esin, Belov, and their partners caused RIGroup Russia to initiate a civil action in the courts of Cyprus against RIGroup USA and others, seeking to enforce a purported loan agreement between RIGroup Russia and Laziar Holding Ltd., a Cypriot company. ( Id. ΒΆ 4). As Laziar Holding is controlled by Bullock, Plaintiffs contend that this lawsuit was in effect an effort to extend Defendants' corporate raiding to Cyprus and to illegally take possession of additional assets owned by Plaintiffs, ...

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