- News & Publications
- Court Dismisses Lawsuit Claiming Litigation Funding Abuse Against Carter Ledyard Clients
Court Dismisses Lawsuit Claiming Litigation Funding Abuse Against Carter Ledyard Clients
New York Supreme Court Justice Leon Ruchelsman issued a decision on April 9, 2019 in Influx Capital LLC et al. v. Pershin et al., dismissing all claims against Carter Ledyard’s merchant cash advance (MCA) industry clients, Fox Capital Group Inc. and Commonwealth Merchant Advance Inc., for allegedly providing third-party litigation funding to the plaintiffs’ customers to sue the plaintiffs. The plaintiffs are competing MCA companies and their principals.
The third-party litigations – in which Carter Ledyard’s clients are not parties – were brought against the plaintiffs by their small business customers (merchants). The merchants claim that the plaintiffs engaged in fraudulent conduct, and in some cases sought injunctions to prevent the plaintiffs from entering confessions of judgment against the merchants.
In the Influx Capital matter, the plaintiffs claimed that an individual from the MCA industry used Fox and Commonwealth to fund the merchant litigations and cause the merchants to default on their MCA agreements with the plaintiffs. The plaintiffs also sued that individual and one of the law firms involved in the merchant actions. Carter Ledyard moved together with the other defendants to dismiss the lawsuit.
In granting dismissal, Justice Ruchelsman found “[t]he complaint does not describe how the defendants interfered, what ‘nefarious and improper’ conduct they undertook to harm any business relations and how they encouraged and funded [merchants] to sue the plaintiffs.” He further ruled that “claims for tortious interference cannot be based upon litigation filings” unless “the litigation is a ‘sham’ that was ‘objectively baseless.’ At this stage, there is no basis to conclude any of the four lawsuits fall within the exception [under which] tortious interference claims can be based upon litigation.”
Justice Ruchelsman issued a February 25, 2019 decision denying the plaintiffs’ motion for a preliminary injunction, which sought to prohibit the defendants from providing funding to the merchants to sue the plaintiffs.
Carter Ledyard attorneys Jacob H. Nemon and Jeffrey S. Boxer represented Fox and Commonwealth.
Surrogate Nora Anderson rejected an attempt to dismiss the Petition of our client Radio Drama Network, to invalidate testamentary instruments that deprived it of a $100 million bequest from its founder Himan Brown.
In an article recently published in Think Advisor, Guy Lander, Alex Malyshev and Matt Schwartz survey the advantages and risks of investing in the Cannabis industry.
Our new blog delivers news and commentary on the unique issues facing the nonprofit sector. For more information, and to subscribe, visit teobulletin.com.
Known as the “Tombs Angel,” Ms. Foster was a volunteer in the court’s criminal justice system who devoted much of her adult life to serving imprisoned New Yorkers.
The conference highlighted the bridges of progress and prosperity being built between the New York and Belfast business communities.
Despite legalization in numerous states, the use of marijuana for any purpose remains barred by federal law, and the ban still has considerable power to damage businesses with activities that are otherwise legal.
Our 2018 Year in Review highlights the cutting-edge work of our clients and the ways we helped them succeed.
Matt Dunn, Ted McDonough and Steve Glusband outline the basic principles of individual liability under the Foreign Corrupt Practices Act (FCPA), specifically as it relates to directors and officers.
The NY Supreme Court dismissed all claims against Carter Ledyard clients Fox Capital Group Inc., and Commonwealth Merchant Advance Inc.
The women lawyers of Carter Ledyard hosted a lively evening at the Center for Book Arts featuring filmmaker and visual artist Zeva Oelbaum and author, photographer, and collector Dr. Alice Kandell.
As the the cannabis industry continues to grow, investment interest is unmistakable. Alex Malyshev identifies precautionary signs that may help investors' awareness of Risk Factors in various disclosure documents.
Karen's article identifies portability as a useful estate planning tool, but suggests it is no substitute for thoughtful estate planning.
The firm is a proud partner of the Food Bank for New York City’s 2019 Justice Served Campaign.
PCG closed a multi-million dollar capital investment in Independent Financial Partners (IFP), facilitating IFP’s launch of a new online platform.
Client Advisory: Jeff Boxer and Alex Malyshev discuss the Supreme Court's recent unanimous decision in Henry Schein, Inc. v. Archer & White Sales, Inc., and what it means for arbitration.