OPINION & ORDER
PAUL A. ENGELMAYER, District Judge.
This decision addresses a motion to transfer venue to Kentucky. Plaintiff SBAV LP ("SBAV") brought this lawsuit against Porter Bancorp, Inc. ("Bancorp"), PBI Bank, Inc. ("PBI"), J. Chester Porter ("Porter"), and Maria L. Bouvette ("Bouvette") (collectively, "defendants"), alleging negligent misrepresentation, breach of contract, and violation of Kentucky securities laws, all in connection with Bancorp's 2010 raise of capital from SBAV. Defendants move to dismiss for lack of personal jurisdiction, see Fed.R.Civ.P. 12(b)(2), and for failure to state a claim, see Fed.R.Civ.P. Rule 12(b)(6); in the alternative, they ask the Court to transfer this case to the United States District Court for the Western District of Kentucky, pursuant to 28 U.S.C. § 1404(a). For the following reasons, the motion to transfer venue is granted, and defendants' motion to dismiss is denied without prejudice.
A. The Parties
SBAV is a Delaware limited partnership with its principal place of business in New York, New York. Am. Compl. ¶ 5.
Bancorp is a Kentucky corporation with its principal place of business in Louisville, Kentucky. As a bank holding company, it is regulated by the Federal Reserve Bank of St. Louis. PBI, Bancorp's wholly-owned subsidiary, is also a Kentucky corporation with its principal place of business in Louisville. Id. ¶ 6. At all relevant times, Porter was chairman of the board of Bancorp and PBI, and Bouvette was president and chief executive officer ("CEO") of both companies. Bouvette Aff. ¶ 1.
B. Bancorp's Raise of Capital from SBAV
Beginning in 2010, Bancorp sought to raise capital, to enable it to comply with capital requirements imposed by federal and state law. Am. Compl. ¶¶ 14, 18. Bouvette and Porter engaged Sandler O'Neil & Partners, L.P. ("Sandler"), a New York-based investment bank, to identify potential investors for Bancorp. Id. ¶ 19. Sandler did so, and, as a result of its efforts, several investors, including some based in New York, acquired Bancorp securities, as part of a private placement which closed on June 30, 2010. Id. ¶ 22.
Before the private placement closed, SBAV was put in contact with Bancorp. Between July 1 and July 23, 2010, SBAV and representatives of Bancorp discussed a potential investment. Id. ¶ 24. While doing its due diligence, Bancorp provided SBAV with access to a "virtual due diligence room, " which SBAV accessed from New York. Id. ¶ 23. On or about July 13, 2010, representatives from SBAV's investment manager met with Bouvette, Porter, and other Bancorp executives in Bancorp's offices in Louisville, Kentucky. Id. ¶ 25.
On July 23, 2010, SBAV entered into a letter agreement with Bancorp. Id. ¶ 28; Tobias Aff. Ex. 2 (the "Letter Agreement"). The Letter Agreement incorporated the terms of several agreements that had been part of the private placement. These included a Securities Purchase Agreement ("SPA") (Tobias Aff. Ex. 3), the Voting and Support Agreement, and the Registration Rights Agreement. Am. Compl. ¶ 28.
C. Procedural History
On December 17, 2012, SBAV filed its initial Complaint in New York State Supreme Court, claiming, inter alia, that defendants made material misrepresentations to SBAV about Bancorp's stability and financial health in connection with their solicitation of capital from SBAV.
On January 16, 2013, defendants removed the action to this Court, based on diversity jurisdiction. Dkt. 1. On February 6, 2013, defendants moved to dismiss. Dkt. 15-19. On February 27, 2013, in response to that motion, SBAV filed an Amended Complaint. Dkt. 31 ("Am. Compl."). Its three causes of action allege: (1) a violation of the Kentucky Securities Act, Ky. Rev. Stat. Ann. § 292.480; (2) negligent misrepresentation; and (3) as to Bancorp, breach of contract.
On March 30, 2013, defendants moved to dismiss the Amended Complaint, for lack of personal jurisdiction and for failure to state a claim; in the alternative, they moved for a transfer of venue to the Western District of Kentucky. Dkt. 34-42. In challenging personal jurisdiction, defendants argued that they (and in particular, Porter and Bouvette) lacked sufficient contacts with New York. In seeking transfer, defendants argued that the underlying events and the location of potential witnesses disproportionately favored Kentucky over New York.
On April 10, 2013, SBAV filed its opposition to the motion. Dkt. 47-50. It argued that the defendants had substantial contacts with New York; and, as to the transfer motion, that the witnesses other than Bancorp's and PBI's employees are largely based in New York and Philadelphia, and that this Court is the "recognized expert in the securities laws at issue here" and has a "compelling interest in policing securities sellers seeking capital from New York." Pl. Br. 2. On April 24, 2013, defendants filed their reply. Dkt. 52-55. On May 16, 2013, the Court heard argument. See Dkt. 61.
A. Threshold Considerations
Although it is common to resolve challenges to personal jurisdiction before addressing motions to transfer venue, see Leroy v. Great W. United Corp., 443 U.S. 173, 180 (1979); Cavit Cantina Viticoltori Consorzio Cantine Sociali Del Trentino Societa' Cooperativa v. Browman Family Vineyards, Inc. (" Cavit Cantina "), 656 F.Supp.2d 421, 424 (S.D.N.Y. 2009) (citing Leroy, 443 U.S. at 180)), courts are not required to do so. Courts may instead address venue applications at the threshold, "when there is a sound prudential justification for doing so, " because "neither personal jurisdiction nor venue is fundamentally preliminary in the sense that subject-matter jurisdiction is." Leroy, 443 U.S. at 180; Cavit Cantina, 656 F.Supp.2d at 424.
Addressing a venue motion in lieu of first addressing personal jurisdiction is particularly sensible where there is a close question whether personal jurisdiction exists over a defendant. See, e.g., Everlast World's Boxing Headquarters Corp. v. Ringside, Inc., No. 12 Civ. 5297 (PAE), 2013 WL 788054, at *4 (S.D.N.Y. Mar. 4, 2013); Cavit Cantina, 656 F.Supp.2d at 424 (deciding venue first because "a substantial and genuine debate" existed over whether personal jurisdiction over defendant would be proper). To address a venue challenge does not require a preliminary finding that "the transferring court has personal jurisdiction over the defendants." Goldlawr, Inc. v. Heiman, 369 U.S. 463, 465 (1962). And where personal jurisdiction would likely exist in the transferee district over a defendant who contests personal jurisdiction in the Southern District of New York, it is "prudentially appropriate to address venue first since a decision to transfer would render personal jurisdiction analysis with respect to [the Southern District] irrelevant." Basile v. Walt Disney Co., 717 F.Supp.2d 381, 385-86 (S.D.N.Y. 2010); see also Corke v. Sameiet M.S. Song of Nor., 557 F.2d 77, 79-80 (2d Cir. 1978); Volk Corp. v. Art-Pak Clip Art Serv., 432 F.Supp. 1179, 1181 (S.D.N.Y. 1977) ("[The Court] has power to transfer the case even if there is no personal jurisdiction over the defendants, and whether or not venue is proper in [the] district, if a transfer would be in the interest of justice.").
These factors warrant addressing defendants' transfer motion first. As the parties' briefs and argument underscored, there is a substantial question whether personal jurisdiction exists over the individual defendants, especially Porter, in this district, whereas it is undisputed that personal jurisdiction would exist over both individuals in the Western District of Kentucky. There is no allegation that Porter ever himself did business in New York, and the allegations as to Bouvette's presence or involvement in New York are sparse. By contrast, the Western District of Kentucky assuredly has personal jurisdiction over all four defendants. Both Bancorp and PBI are Kentucky companies doing business in Kentucky; and both Bouvette and Porter are domiciled in Kentucky. It is, therefore, prudent for the Court first to address the motion to transfer venue.
B. The Motion to Transfer Venue
Under 28 U.S.C. § 1391, venue is proper in a judicial district "in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of that property that is the subject of the action is situated." Defendants do not contend that venue is improper in the Southern District of New York, but rather seek discretionary transfer under § 1404(a).
Section 1404(a) provides: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." Section 1404(a) gives district courts wide latitude to decide whether to transfer venue. In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992) (citing Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)); ...