VA Mgt., LP v. Odeon Capital Group, LLC , 2020 NY Slip Op 07482 ( 2020 )

VA Mgt., LP v Odeon Capital Group, LLC (2020 NY Slip Op 07482)

VA Mgt., LP v Odeon Capital Group, LLC

2020 NY Slip Op 07482

Decided on December 10, 2020

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided and Entered: December 10, 2020
Before: Manzanet-Daniels, J.P., Mazzarelli, Gesmer, Moulton, Shulman, JJ.

Index No. 654492/19 Appeal No. 12611 Case No. 2020-02368

[*1]VA Management, LP, Plaintiff-Respondent,

v

Odeon Capital Group, LLC, et al., Defendants-Appellants.

Bressler, Amery & Ross, P.C., New York (Mark Knol, David Butler and Gregory S. Sparer of counsel), for Odeon Capital Group LLC, appellant.

Skadden, Arps, Slate, Meagher & Flom LLP, New York (Alexander C. Drylewski and James Carroll, of the bar of the State of Massachusetts, admitted pro hac vice, of counsel), for Janney Montgomery Scott LLC, appellant.

Duane Morris LLP, New York (Dana B. Klinges of counsel), for C&Co/PrinceRidge LLC and J.V.B. Financial Group, LLC, appellants.

Susman Godfrey LLP, New York (Beatrice C. Franklin of counsel), for respondent.

Order, Supreme Court, New York County (Andrew Borrok, J.), entered on or about April 29, 2020, which denied defendants' CPLR 3211(a) motions to dismiss the complaint, unanimously reversed, on the law, with costs, and the motions granted. The Clerk is directed to enter judgment accordingly.

The facts alleged in the complaint describe a fraudulent scheme between employees of plaintiff and employees of defendants in which plaintiff benefitted directly from its employees' fraud by way of inflated net asset values for the funds it managed. This benefit to plaintiff directly from the fraudulent acts of its employees renders the adverse interest exception to the in pari delicto defense unavailable (Kirschner v KPMG LLP, 15 NY3d 446, 466 [2010]). THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: December 10, 2020