Deutsche Bank AG v. Devon Park Bioventures, L.P.

COURT OF CHANCERY
OF THE
SAM GLASSCOCK III STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE
VICE CHANCELLOR 34 THE CIRCLE
GEORGETOWN, DELAWARE 19947
Date Submitted: December 21, 2023
Date Decided: January 2, 2024
Stephen C. Norman, Esquire Edwin J. Harron, Esquire
Aaron R. Sims, Esquire James M. Yoch, Jr., Esquire
POTTER ANDERSON & CORROON LLP Kevin P. Rickert, Esquire
1313 North Market Street YOUNG CONAWAY STARGATT &
Hercules Plaza, 6th Floor TAYLOR, LLP
Wilmington, Delaware 19801 1000 North King Street
Rodney Square
P. Clarkson Collins, Jr., Esquire Wilmington, Delaware 19801
K. Tyler O’Connell, Esquire
Albert J. Carroll, Esquire William M. Kelleher, Esquire
R. Erick Hacker, Esquire Neil R. Lapinski, Esquire
MORRIS JAMES LLP Phillip A. Giordano, Esquire
500 Delaware Avenue, Suite 1500 GORDON, FOURNARIS &
Wilmington, Delaware 19801 MAMMARELLA, P.A.
1925 Lovering Avenue
Wilmington, Delaware 19801
Re: Deutsche Bank AG v. Devon Park Bioventures, L.P., et al.,
C.A. No. 2017-0822-SG
Dear Counsel:
This brief Letter Opinion resolves a request for an interlocutory appeal.
Before me is the motion of Plaintiff Deutsche Bank AG (“Deutsche”) for a partial
final judgment or, in the alternative, certification of an interlocutory appeal of my
Memorandum Opinion of October 31, 2023 (the “Opinion”), under Supreme Court
Rule 42.1 Because the request to certify is subject to expedited review, I address it
here, and reserve on the Motion for Partial Final Judgment, which I consider
submitted herewith and which I will resolve separately.
This matter involves, inter alia, Deutsche’s attempt to collect a judgment by
attaching interests of its debtor, Sebastian Holdings, Inc. (“SHI”), in a Delaware
limited partnership, Devon Park Bioventures, L.P. (“Devon LP”). SHI has
transferred its interest in Devon LP (the “Devon Interest”) to another entity, CPR
Management, S.A. (“CPR”). SHI is a citizen of the Turks and Caicos Islands, CPR
is Panamanian. Deutsche seeks to set aside any transfer of SHI’s Devon Interest to
CPR as a fraudulent transfer designed to defeat satisfaction of Deutsche’s money
judgment, and to impose a charging order on SHI’s Devon Interest, in its favor.
Devon LP has a sum representing the distribution due to the partnership interest
currently or formerly held by SHI deposited in a bank account in Pennsylvania; this
Court has imposed an order restraining Devon LP from releasing those funds
pending resolution of the question of who owns the Devon Interest.
In an earlier Memorandum Opinion (the “2021 Opinion”),2 I concluded that
the interest of SHI and CPR in Devon LP, a Delaware limited partnership, was
1
The parties contest whether the proposed interlocutory appeal is timely. Consistent with my
understanding of my role under Supreme Court Rule 42, I do not address this dispute.
2
Deutsche Bank AG v. Devon Park Bioventures, L.P., 2021 WL 2711472 (Del. Ch. June 30,
2021).
2
insufficient to confer in personam jurisdiction over these entities and to apply the
Delaware Fraudulent Transfer Statute3 to them in a Delaware court. The Opinion
under consideration here considered whether, nonetheless, I may allow a procedure
in rem against the partnership interest, on Plaintiff’s theory that such an interest is
located in the state in which the limited partnership was formed. Plaintiff asserted
that the charging order statute provided at least in rem jurisdiction over a Delaware
partnership interest for the purpose of imposing a charging order.4 The parties
squared off on the location of the intangible interest in a limited partnership, a
question that appeared to be of first impression. I did not reach this question,
however. That is because any charging order would require litigation of the
underlying fraud claim. SHI caused Devon LP to transfer the partnership interest to
CPR. If that transfer was fraudulent, presumably, it can be set aside, but due process
would require CPR’s interest to be represented in the litigation of that issue. I had
already determined in the 2021 Opinion that the Court lacked jurisdiction over SHI
and CPR. I found that Plaintiff’s proposed in rem proceeding would be “simply a
backdoor way of obtaining jurisdiction over CPR in the substantive fraud
litigation.”5 Therefore, under the Opinion, Deutsche cannot proceed to vindicate its
3
Del. Unif. Fraudulent Transfer Act, 6 Del. C. §§ 1301, et seq.
4
6 Del. C. § 17-703.
5
Deutsche Bank AG v. Devon Park Bioventures, L.P., 2023 WL 71559921, at *1 (Del. Ch. Oct.
31, 2023).
3
judgment against SHI in this litigation via a charging order against the Devon
Interest.6
That did not conclude the litigation, however. Deutsche has brought fraud
and conspiracy claims against Devon LP itself in connection with the transfer of the
Devon Interest from SHI to CPR. Thus, the main relief Deutsche seeks in the
litigation has been stymied by my determination that jurisdiction is absent.
Notwithstanding this, the allegations by Deutsche against Devon LP remain to be
litigated.
Piecemeal appeals are inefficient and highly disfavored by our Supreme
Court. They are cognizable only in exceptional instances where circumstances
demonstrate that appeal may provide benefits that outweigh the substantial costs of
the appeal.7 A trial court presented with a request to certify an interlocutory appeal
must consider whether:
(A) The interlocutory order involves a question of law resolved for the
first time in this State; (B) The decisions of the trial courts are
conflicting upon the question of law; (C) The question of law relates to
the constitutionality, construction, or application of a statute of this
State, which has not been, but should be, settled by this Court in
advance of an appeal from a final order; (D) The interlocutory order has
sustained the controverted jurisdiction of the trial court; (E) The
interlocutory order has reversed or set aside a prior decision of the trial
court, a jury, or an administrative agency from which an appeal was
6
I did not definitively exclude the possibility of some relief via charging order. I expressly
indicated that I would consider a conditional charging order against any interest of SHI, the
judgment debtor, upon proper motion. Deutsche Bank AG, 2023 WL 71559921, at *9.
7
Supr. Ct. R. 42(b)(ii).
4
taken to the trial court which had decided a significant issue and a
review of the interlocutory order may terminate the litigation,
substantially reduce further litigation, or otherwise serve considerations
of justice; (F) The interlocutory order has vacated or opened a judgment
of the trial court; (G) Review of the interlocutory order may terminate
the litigation; or (H) Review of the interlocutory order may serve
considerations of justice.8
In reviewing these considerations, I find that the Opinion is not suitable for
interlocutory appeal. My findings in the 2021 Opinion and in the Opinion itself have
certainly curtailed Deutsche’s ability to vindicate its judgment, at least in this
jurisdiction. One cannot help being sympathetic to Plaintiff’s decade-long multi-
jurisdictional quest to vindicate its judgment, frustrated (according to Plaintiff) by
the machinations of Vik pere et fils9 and entities affiliated with those gentlemen.10
Set against this is the strong disinclination of our Supreme Court to the inefficiencies
of piecemeal litigation. If the Opinion had turned on the resolution of the locus of a
partnership interest under Delaware law, for purposes of applying a charging order
on the partnership, some of the factors mandated by rule might be applicable. But
the Opinion turned instead on lack of in personam jurisdiction over CPR for the
underlying predicate question of who owns the Devon Interest. This is not a novel
question; the legal path to resolution of questions of personal jurisdiction is well-
8
Supr. Ct. R. 42(b)(iii).
9
Alexander Vik, Sr. and Alexander Vik, Jr. Vik Jr. controls SHI; Vik Sr. controls CPR.
10
Mitigating this is the possibility of a conditional charging order against the Devon Interest, if
any, of the judgment creditor. See n.6, supra. Deutsche has not sought, and I have not
considered, whether such an order is contemplated by the statute.
5
worn. If I have wandered astray, that may be resolved by appeal, but does not qualify
the matter for interlocutory appeal under Rule 42.
I have attached an Order in the form mandated by Rule 42(c)(4) and Official
Form L.
Sincerely,
/s/ Sam Glasscock III
Vice Chancellor
6
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR SUSSEX COUNTY
DEUTSCHE BANK AG, )
)
Plaintiff, )
)
v. )
) C.A. No. 2017-0822-SG
DEVON PARK BIOVENTURES, L.P., DEVON )
PARK ASSOCIATES, L.P., SEBASTIAN )
HOLDINGS, INC., and UNIVERSAL LOGISTIC )
MATTERS, S.A., )
)
Defendants. )
)
DEVON PARK BIOVENTURES, L.P., )
)
Counterclaim-Plaintiff, )
)
v. )
)
DEUTSCHE BANK AG, )
)
Counterclaim-Defendant, )
)
and )
)
SEBASTIAN HOLDINGS, INC. and UNIVERSAL )
LOGISTIC MATTERS, S.A., )
)
Cross-Claim Defendants. )
)
ORDER DENYING LEAVE TO APPEAL FROM INTERLOCUTORY
ORDER
This second day of January, 2024, the Plaintiff Deutsche Bank AG having
made application under Rule 42 of the Supreme Court for an order certifying an
7
appeal from the interlocutory order of this Court dated October 31, 2023; and the
Court having found that such order determines a substantial issue of material
importance that merits appellate review before a final judgment, but that none of
qualifying criteria of Supreme Court Rule 42(b)(iii) applies;
IT IS ORDERED that the certification of the Court’s ruling of October 31,
2023, to the Supreme Court of the State of Delaware for disposition in accordance
with Rule 42 of that Court is DENIED.
/s/ Sam Glasscock III
Vice Chancellor
8