United States District Court, S.D. New York
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
For Plaintiffs: Leonard Zack, LEONARD ZACK & ASSOCIATES, Lawrence Daniel O'Neill.
For National Asset Management Agency, Defendants: Richard A Beran, Thomas J. Goodwin, MCCARTER & ENGLISH, LLP.
For Arthur Michael Royal Aynsley and Allan Dukes, Defendants: Anthony P. Callaghan, Robert C. Brady, Jonathan D. Klein, GIBBONS P.C.
For Byrne Wallace, Defendant: Jean-Marie L. Atamian, Michelle J. Annunziata, MAYER BROWN LLP.
Lewis A. Kaplan, United States District Judge.
This is an action by five members of the Flynn family (the " Flynns" ) and fifteen or more entities to which they have some connection (the " Entities" ) against twenty three individuals and entities arising out of the Flynns' borrowing from an Irish bank of more than $200 million to finance the Flynn plaintiffs' real estate activities. The amended complaint asserts claims under the Racketeer Influenced and Corrupt Organizations Act (" RICO" ) and on theories of fraud, trespass to chattels, conversion, unjust enrichment, constructive trust, civil conspiracy, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and negligence. Now before the Court are the plaintiffs' motion for a preliminary injunction and motions by various defendants to dismiss the case for lack of subject matter and personal jurisdiction, on the ground of forum non conveniens, for failure to plead fraud with the requisite particularity, and for failure to state a claim upon which relief may be granted. As the Court has concluded that the action should be dismissed on the ground of forum non conveniens, it is unnecessary to address most of the defendants' arguments.
The Background of the Lawsuit
Beginning in or about 1994, plaintiffs borrowed over $200 million from the Anglo Irish Bank Corporation (the " Bank" ) in 84 loan transactions to purchase and develop real estate in Ireland, the United Kingdom, and the United States. Most were guaranteed by the Flynns personally.
Some allegedly were negotiated, at least in part, in the United States.
In 2008, at the time of the well known financial crisis, the Bank was failing. The Republic of Ireland (" Ireland" ) allegedly injected capital into it, guaranteed its liabilities and, in January 2009, became its sole shareholder.
Plaintiffs allege that the Bank in 2010 sold € 35 billion of loans -- including those of the plaintiffs -- to something they call NAMA/NAML, which they allege is a for-profit company created by the Irish National Asset Management Agency Bill of 2009. In fact, however, Ireland created the National Asset Management Agency (" NAMA" ) on December 21, 2009 pursuant to the National Asset Management Agency Act (Establishment Day) Order 2009 and the National Asset Management Agency Act, 2009 (the " NAMA Act" ). NAMA is an agency of the Irish government and has no private ownership. National Asset Management Limited (" NAML" ) is a special purpose vehicle that financed NAMA's acquisition of loans from Irish financial institutions.
Plaintiffs claim to have discovered in 2010 that the Bank -- which by then was or shortly thereafter became a predecessor in interest to NAMA upon NAMA's purchase of the plaintiffs' loans from the Bank -- had been overcharging them for interest for over a decade. They allege, on information and belief, that the Bank then entered into a conspiracy with " NAMA/NAML" and the Irish government " to cover up the fraudulent charges and intimidate the Flynn Plaintiffs into silence" in order to preserve the assets of the Bank and its successors. And the story goes on from there, the plaintiffs asserting broadly that NAMA and other defendants continue fraudulently to overcharge them and have mounted a campaign to coerce them into dropping their claims and keeping silent by suing them in Irish courts, threatening asset seizures, tampering with witnesses, and so on. According to plaintiffs, the defendants also are threatening to dispose of Flynn assets at inadequate prices and otherwise to take advantage of them.
The Irish Litigation
On February 19, 2013, and thus months before the commencement of this action, Leona Flynn commenced an action in the High Court in Dublin, seeking a declaration that she has no personal obligation under the so-called Belfield Park Loan, one of the loans that is the subject of this action. Her statement of claim asserted that she is " a lady with a residence" in Dublin.
On May 8, 2013, also well before the commencement of this action, National Asset Loan Management Limited, the relevant
NAMA subsidiary and the defendant in that action, filed a counterclaim against all five of the Flynns seeking recovery of € 22 million said to be ...