RECEIVED NYSCEF: 12/15/2021
`NYSCEF DOC. NO. 848
`2021-04695
`FILED: APPELLATE DIVISION - 1ST DEPT 12/17/2021 02:16 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 12/17/2021
`
`INDEX NO. 653594/2018
`
`
`
`IN RE RENREN, INC.
`
`DERIVATIVE LITIGATION
`
`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
`__________________________________________________________ x
`
`Index No. 653594/2018
`:
`
`:
`NOTICE OF APPEAL
`:
`
`:
`Hon. Andrew Borrok
`:
`Part 53
`:
`
`:
`Mot. Seq. No. 021
`:
` __________________________________________________________ x
`
`
`
`
`
`
`PLEASE TAKE NOTICE that Plaintiffs Heng Ren Silk Road Investments LLC, Oasis
`
`Investment II Master Fund Ltd., and Jodi Arama hereby appeal to the Appellate Division of the Supreme
`
`Court of the State of New York, First Department, from the Order of the Supreme Court of the State of New
`
`York, County of New York (Borrok, J.S.C.), dated December 10, 2021, and from each and every part
`
`thereof. A copy of the Order with Notice of Entry dated December 15, 2021 (NYSCEF No. 847)
`
`is attached hereto.
`
`Dated: New York, New York
`December 15, 2021
`
`
`
`
`
`
`
`1 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`
`
`REID COLLINS & TSAI LLP
`
`By: /s/ William T. Reid, IV
`William T. Reid, IV
`Jeff Gross
`Yonah Jaffe
`330 West 58th Street, Ste. 403
`New York, NY 10019
`Tel: (212) 344-5200
`
`-and-
`
`Nathaniel J. Palmer
`W. Tyler Perry
`Dylan Jones
`1301 S. Capital of Texas Hwy., Ste. C300
`Austin, TX 78746
`Tel: (512) 647-6100
`
`-and-
`
`Michael Yoder
`1601 Elm Street, Ste. 4250
`Dallas, TX 75201
`Tel: (214) 420-8900
`
`GANFER SHORE LEEDS &
`ZAUDERER LLP
`
`By: /s/ Jason T. Cohen
`Mark C. Zauderer
`Jason T. Cohen
`360 Lexington Avenue
`New York, NY 10017
`Tel: (212) 412-9523
`jcohen@ganfershore.com
`
`
`
`
`To: All Counsel (via ECF)
`
`
`
`
`
`
`
`
`
`
`GRANT & EISENHOFER P.A.
`
`By: /s/ Michael D. Bell
`Jay W. Eisenhofer
`Michael D. Bell
`485 Lexington Avenue, 29th Floor
`New York, NY 10017
`Tel: (646) 722-8500
`
`-and-
`
`Christine M. Mackintosh
`123 Justison Street, 7th Floor
`Wilmington, DE 19801
`Tel: (302) 622-7000
`
`GARDY & NOTIS, LLP
`
`By: /s/ James S. Notis
`James S. Notis
`Jennifer Sarnelli
`126 East 56th Street, 8th Floor
`New York, NY 10022
`Tel: (212) 905-0509
`
`
`
`
`
`
`
`
`
`
`
`
`to Plaintiffs Heng Ren Silk Road
`Counsel
`Investments LLC, Oasis Investment II Master Fund
`Ltd., and Jodi Arama
`
`
`
`
`
`2
`
`2 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`Informational Statement (Pursuant to 22 NYCRR 1250.3 [a]) - Civil
`
`Case Title: Set forth the title of the case as it appears on the summons, notice of petition or order to
`show cause by which the matter was or is to be commenced, or as amended.
`
`For Court of Original Instance
`
`- against -
`
`Date Notice of Appeal Filed
`
`For Appellate Division
`
`Case Type
`
`Filing Type
`
`Civil Action
`CPLR article 75 Arbitration
`
`CPLR article 78 Proceeding
`Special Proceeding Other
`Habeas Corpus Proceeding
`
`Appeal
`Original Proceedings
`CPLR Article 78
`Eminent Domain
`Labor Law 220 or 220-b
`Public Officers Law § 36
`Real Property Tax Law § 1278
`
`Transferred Proceeding
`CPLR Article 78
`Executive Law § 298
`CPLR 5704 Review
`
`Nature of Suit: Check up to
`
` of the following categories which best reflect the nature of the case.
`
`Administrative Review
`Declaratory Judgment
`Family Court
`Real Property
`(other than foreclosure)
`
`Business Relationships
`Domestic Relations
`Mortgage Foreclosure
`Statutory
`
`Commercial
`Election Law
`Miscellaneous
`Taxation
`
`Contracts
`Estate Matters
`Prisoner Discipline & Parole
`Torts
`
`3 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`Paper Appealed From (Check one only):
`
`Appeal
`
`Amended Decree
`Amended Judgement
`Amended Order
`Decision
`Decree
`Court:
`Dated:
`Judge (name in full):
`Stage:
` Interlocutory
`
`Determination
`Finding
`Interlocutory Decree
`Interlocutory Judgment
`Judgment
`
` Final
`
` Post-Final
`Prior Unperfected Appeal
`
`If an appeal has been taken from more than one order or
`judgment by the filing of this notice of appeal, please
`indicate the below information for each such order or
`judgment appealed from on a separate sheet of paper.
`Order
`Resettled Order
`Order & Judgment
`Ruling
`Partial Decree
`Other (specify):
`Resettled Decree
`Resettled Judgment
`County:
`Entered:
`Index No.:
` No If Yes:
`Trial:
` Yes
`Information
`
` Non-Jury
`
` Jury
`
`Are any appeals arising in the same action or proceeding currently pending in the court?
`If Yes, please set forth the Appellate Division Case Number assigned to each such appeal.
`
`Yes
`
` No
`
`Where appropriate, indicate whether there is any related action or proceeding now in any court of this or any other
`jurisdiction, and if so, the status of the case:
`
`Original Proceeding
`
` Writ of Habeas Corpus Date Filed:
` Notice of Petition
`Commenced by: Order to Show Cause
`Statute authorizing commencement of proceeding in the Appellate Division:
`
`Court:
`Judge (name in full):
`
`Court:
`Judge (name in full):
`
`Proceeding Transferred Pursuant to CPLR 7804(g)
`
`County:
`Order of Transfer Date:
`CPLR 5704 Review of Ex Parte Order:
`
`County:
`Dated:
`Description of Appeal, Proceeding or Application and Statement of Issues
`
`Description: If an appeal, briefly describe the paper appealed from. If the appeal is from an order, specify the relief
`requested and whether the motion was granted or denied. If an original proceeding commenced in this court or transferred
`pursuant to CPLR 7804(g), briefly describe the object of proceeding. If an application under CPLR 5704, briefly describe the
`nature of the ex parte order to be reviewed.
`
`4 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`Issues: Specify the issues proposed to be raised on the appeal, proceeding, or application for CPLR 5704 review
`
`Party Information
`
`Instructions: Fill in the name of each party to the action or proceeding, one name per line. If this form is to be filed for an
`
` appeal, indicate the status of the party in the court of original instance and his, her, or its status in this court, if any. If this
`form is to be filed for a proceeding commenced in this court, fill in only the party’s name and his, her, or its status in this
`court.
`
`Party Name
`
`Original Status
`
`Appellate Division Status
`
`No.
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`
`5 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`Attorney Information
`
`Instructions: Fill in the names of the attorneys or firms for the respective parties. If this form is to be filed with the
`notice of petition or order to show cause by which a special proceeding is to be commenced in the Appellate Division,
`only the name of the attorney for the petitioner need be provided. In the event that a litigant represents herself or
`himself, the box marked “Pro Se” must be checked and the appropriate information for that litigant must be supplied
`in the spaces provided.
`
`State:
`
`Zip:
`
`State:
`
`Zip:
`
`State:
`
`Zip:
`
`Attorney/Firm Name:
`Address:
`City:
`E-mail Address:
` Government
` Assigned
`Retained
`Attorney Type:
`Party or Parties Represente (set forth party number(s) from table above :
`Attorney/Firm Name:
`Address:
`City:
`E-mail Address:
` Government
` Assigned
`Retained
`Attorney Type:
`Party or Parties Represented (set forth party number(s) from table above :
`Attorney/Firm Name:
`Address:
`City:
`E-mail Address:
` Government
` Assigned
`Retained
`Attorney Type:
`Party or Parties Represented (set forth party number(s) from table above :
`Attorney/Firm Name:
`Address:
`City:
`E-mail Address:
` Government
` Assigned
`Retained
`Attorney Type:
`Party or Parties Represented (set forth party number(s) from table above :
`Attorney/Firm Name:
`Address:
`City:
`E-mail Address:
` Government
` Assigned
`Retained
`Attorney Type:
`Party or Parties Represented (set forth party number(s) from table above :
`Attorney/Firm Name:
`Address:
`City:
`E-mail Address:
`Government
`Assigned
`Retained
`Attorney Type:
`Party or Parties Represented (set forth party number(s) from table above :
`
`State:
`
`Zip:
`
`State:
`
`Zip:
`
`State:
`
`Zip:
`
`Telephone No:
`
` Pro Se
`
` Pro Hac Vice
`
`Telephone No:
`
` Pro Se
`
` Pro Hac Vice
`
`Telephone No:
`
` Pro Se
`
` Pro Hac Vice
`
`Telephone No:
`
` Pro Se
`
` Pro Hac Vice
`
`Telephone No:
`
` Pro Se
`
` Pro Hac Vice
`
`Telephone No:
`
`Pro Se
`
`Pro Hac Vice
`
`6 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`
`
`APPENDIX A:
`
`Attorney Information
`
`7 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`1. Attorneys Representing Parties 1, 2, and 3 from Party Information Table (Plaintiffs)
`
`Michael Yoder
`1601 Elm Street, Ste. 4250
`Dallas, TX 75201
`(214) 420-8900
`myoder@ reidcollins.com
`
`
`
`
`
`
`
`
`
`REID COLLINS & TSAI LLP
`William T. Reid, IV
`Marc Dworsky
`Jeffrey E. Gross
`Yonah Jaffe
`330 West 58th Street, Ste 403
`New York, NY 10019
`(212) 344-5200
`wreid@ reidcollins.com
`mdworsky@reidcollins.com
`jgross@reidcollins.com
`yjaffe@reidcollins.com
`
`
`
`
`
`Nathaniel J. Palmer
`Dylan E. Jones
`W. Tyler Perry
`1301 S. Capital of Texas
`Hwy., Ste. C300
`Austin, TX 78746
`Tel: (512) 647-6100
`npalmer@reidcollins.com
`djones@reidcollins.com
`tperry@reidcollins.com
`
`GANFER SHORE LEEDS & ZAUDERER LLP
`Mark C. Zauderer
`Jason T. Cohen
`360 Lexington Avenue
`New York, NY 10017
`Tel: (212) 412-9523
`mzauderer@ganfershore.com
`jcohen@ganfershore.com
`
`
`
`Christine M. Mackintosh
`123 Justison Street, 7th Floor
`Wilmington, DE 19801
`Tel: (302) 622-7000
`CMackintosh@gelaw.com
`
`GRANT & EISENHOFER, P.A
`Jay W. Eisenhofer
`Michael D. Bell
`485 Lexington Avenue,
`29th Floor
`New York, NY 10017
`Tel: (646) 722-8500
`mbell@gelaw.com
`
`GARDY & NOTIS LLP
`James S. Notis
`Jennifer Sarnelli
`126 East 56th Street, 8th Floor
`New York, NY 10022
`Tel: (212) 905-0509
`jnotis@gardylaw.com
`jsarnelli@gardylaw.com
`
`8 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`2. Attorneys Representing Party 4 from Party Information Table (Nominal Defendant Renren, Inc.)
`
`
`
`
`
`
`
`
`SKADDEN ARPS SLATE MEAGHER & FLOM LLP
`Christopher P. Malloy
`Amanda C. Strauss
`One Manhattan West
`New York, NY 10001
`Tel: (212) 735-3000
`Christopher.malloy@skadden.com
`Amanda.strauss@skadden.com
`
`
`
`HOLLAND & KNIGHT LLP
`Stosh M. Silivos
`31 West 52nd Street
`New York, NY 10019 Tel: (212)
`513-3533
`Stosh.Silivos@hklaw.com
`
`KATTEN MUCHIN ROSENMAN
`Chase E. Galerman
`575 Madison Avenue
`New York, NY 10022
`Tel: (212) 940-8800
`Chase.galerman@katten.com
`
`
`
`9 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`3. Attorneys Representing Parties 5, 6, 7, and 8 from Party Information Table (Defendants Joseph
`Chen, Oak Pacific Investment, Renren Lianhe Holdings, and Renren SF Holdings, Inc.)
`
`
`
`
`
`
`
`
`
`
`
`McDERMOTT WILL & EMERY LLP
`Andrew B. Kratenstein
`M. Elias Berman
`J. Greer Griffith
`Timothy Cramton
`340 Madison Avenue New York, NY
`10173 Tel: (212) 547-5400
`akratenstein@mwe.com
`eberman@mwe.com
`ggriffith@mwe.com
`tcramton@mwe.com
`
`PAUL WEISS RIFKIND WHARTON & GARRISON LLP
`Allan J. Arffa
`Andrew G. Gordon
`Gregory F. Laufer
`Jonathan H. Hurwitz
`Johan E. Tatoy
`1285 Avenue of the Americas
`New York, NY 10019
`Tel: 212-373-3000
`aarffa@paulweiss.com
`agordon@paulweiss.com
`glaufer@paulweiss.com
`jhurwitz@paulweiss.com
`jtatoy@paulweiss.com
`
`
`4. Attorneys Representing Parties 9, 10, 11, 12, 13 from Party Information Table (Defendants David
`Chao, DCM III, L.P., DCM III-A, L.P., DCM Affiliates Fund III, L.P., and DCM Investment
`Management III, LLC)
`
`
`
`Adam Slutsky
`100 Northern Avenue
`Boston, MA 02210
`Tel: (617) 570-1000
`ASlutsky@goodwinlaw.com
`
`GOODWIN PROCTER LLP
`Brian E. Pastuszenski
`620 Eighth Avenue
`New York, NY 10018
`Tel: (212) 813-8800
`BPastuszenski@goodwinlaw.com
`
`Ezekiel Hill
`1900 N Street, N.W. Washington,
`DC 20036
`Tel: (202) 346-6000
`ehill@goodwinlaw.com
`
`
`10 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`5. Attorneys Representing Party 14 from Party Information Table (Defendant Duff & Phelps, LLC)
`
`
`
`
`
`
`
`
`
`
`
`WINSTON & STRAWN LLP
`James P. Smith III
`Frank Restagno
`Michelle D. Tuma
`200 Park Avenue
`New York, NY 10016
`Tel: (212) 294-6700
`jpsmith@winston.com
`frestagno@winston.com
`mtuma@winston.com
`
`6. Attorneys Representing Party 15 from Party Information Table (Defendant Social Finance, Inc.)
`
`ORRICK HERRINGTON & SUTCLIFFE LLP
`William J. Foley
`51 West 52nd Street
`New York, New York 10019
`Tel: (212) 506-5000
`wfoley@orrick.com
`
`James N. Kramer
`405 Howard Street
`San Francisco, CA 94105
`Tel: (415) 773-5923
`jkramer@orrick.com
`
`7. Attorneys Representing Parties 16, 17, and 18 from Party Information Table (Defendants
`SoftBank Group Corp., SoftBank Group Capital Ltd., and SB Pan Pacific Corp.)
`
`MORRISON & FOERSTER LLP
`Andrew L. Meyer
`Shin-Marunouchi Building 5-1,
`Marunouchi 1-chome
`Chiyoda-ku, Tokyo 100-6529
`Tel: 81 (3) 3214-6771
`amyer@mofo.com
`
`
`
`
`David Fertig
`Lauren M. Gambier
`250 West 55th Street
`New York, NY 10019-9601
`Tel: (212) 336-4408
`dfertig@mofo.com
`lgambier@mofo.com
`
`
`
`11 of 20
`
`

`

`NYSCEF DOC. NO. 848
`
`INDEX NO. 653594/2018
`
`RECEIVED NYSCEF: 12/15/2021
`
`
`
`
`
`
`
`
`
`
`
`8. Attorneys Representing Party 19 from Party Information Table (Altimeo Asset Management)
`
`POMERANTZ LLP
`Michael Grunfeld
`600 Third Avenue, 20th Floor
`New York, New York 10016
`Tel: (212) 661-1100
`mgrunfeld@pomlaw.com
`
`9. Attorneys Representing Party 20 from Party Information Table (Two Seas Global (Master) Fund LP)
`
`GLENN AGRE BERGMAN & FUENTES LLP
`Andrew K. Glenn
`55 Hudson Yards, 20th Floor
`New York, New York 10001
`Tel: (212) 358-5600
`aglenn@glennagre.com
`
`
`12 of 20
`
`

`

`FILED: NEW YORK COUNTY CLERK 12/15/2021 02:55 PM
`
`NYSCEF DOC. NO. 847NYSCEF DOC. NO. 848
`
`
`
`INDEX NO. 653594/2018INDEX NO. 653594/2018
`
`
`
`RECEIVED NYSCEF: 12/15/2021RECEIVED NYSCEF: 12/15/2021
`
`
`
`IN RE RENREN, INC.
`
`DERIVATIVE LITIGATION
`
`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
`__________________________________________________________ x
`
`Index No. 653594/2018
`:
`
`:
`NOTICE OF ENTRY
`:
`
`:
`Hon. Andrew Borrok
`:
`Part 53
`:
`
`:
`Mot. Seq. No. 021
`:
` __________________________________________________________ X
`
`
`
`
`
`
`PLEASE TAKE NOTICE that annexed hereto is a true and correct copy of a Decision
`
`and Order dated December 10, 2021, that was duly entered in the office of the Clerk of the
`
`Supreme Court, County of New York on December 10, 2021 (NYSCEF Doc. No. 846).
`
`
`
`Dated: New York, New York
`December 15, 2021
`
`
`
`1 of 813 of 20
`
`

`

`FILED: NEW YORK COUNTY CLERK 12/15/2021 02:55 PM
`
`NYSCEF DOC. NO. 847NYSCEF DOC. NO. 848
`
`
`
`INDEX NO. 653594/2018INDEX NO. 653594/2018
`
`
`
`RECEIVED NYSCEF: 12/15/2021RECEIVED NYSCEF: 12/15/2021
`
`
`
`REID COLLINS & TSAI LLP
`
`By: /s/ William T. Reid, IV
`William T. Reid, IV
`Jeff Gross
`Yonah Jaffe
`330 West 58th Street, Ste. 403
`New York, NY 10019
`Tel: (212) 344-5200
`
`-and-
`
`Nathaniel J. Palmer
`W. Tyler Perry
`Dylan Jones
`1301 S. Capital of Texas Hwy., Ste. C300
`Austin, TX 78746
`Tel: (512) 647-6100
`
`-and-
`
`Michael Yoder
`1601 Elm Street, Ste. 4250
`Dallas, TX 75201
`Tel: (214) 420-8900
`
`GANFER SHORE LEEDS &
`ZAUDERER LLP
`
`By: /s/ Jason T. Cohen
`Mark C. Zauderer
`Jason T. Cohen
`360 Lexington Avenue
`New York, NY 10017
`Tel: (212) 412-9523
`jcohen@ganfershore.com
`
`
`
`
`To: All Counsel (via ECF)
`
`
`
`
`
`
`
`
`
`
`
`GRANT & EISENHOFER P.A.
`
`By: /s/ Michael D. Bell
`Jay W. Eisenhofer
`Michael D. Bell
`485 Lexington Avenue, 29th Floor
`New York, NY 10017
`Tel: (646) 722-8500
`
`-and-
`
`Christine M. Mackintosh
`123 Justison Street, 7th Floor
`Wilmington, DE 19801
`Tel: (302) 622-7000
`
`GARDY & NOTIS, LLP
`
`By: /s/ James S. Notis
`James S. Notis
`Jennifer Sarnelli
`126 East 56th Street, 8th Floor
`New York, NY 10022
`Tel: (212) 905-0509
`
`
`
`
`
`
`
`
`
`
`
`
`to Plaintiffs Heng Ren Silk Road
`Counsel
`Investments LLC, Oasis Investment II Master Fund
`Ltd., and Jodi Arama
`
`
`
`
`
`2
`
`
`
`2 of 814 of 20
`
`

`

`FILED: NEW YORK COUNTY CLERK 12/15/2021 02:55 PM
`
`
`NYSCEF DOC. NO. 846NYSCEF DOC. NO. 847NYSCEF DOC. NO. 848
`
`
`
`
`
`INDEX NO. 653594/2018INDEX NO. 653594/2018INDEX NO. 653594/2018
`
`
`
`
`
`RECEIVED NYSCEF: 12/10/2021RECEIVED NYSCEF: 12/15/2021RECEIVED NYSCEF: 12/15/2021
`
`
`
`
`
`SUPREME COURT OF THE STATE OF NEW YORK
`NEW YORK COUNTY
`
`PRESENT:
`
`
`
`
`HON. ANDREW BORROK
`
`
`Justice
`---------------------------------------------------------------------------------X
`
`PART 53
`
`
`
`
`
`
`
`IN RE RENREN, INC. DERIVATIVE LITIGATION,
`
` Plaintiff,
`
`
`
`
`
`- v -
`
` INDEX NO.
`
` MOTION DATE
`
`
` MOTION SEQ. NO.
`
`
`653594/2018
`
`
`
` 021
`
`
`XXX,
`
` Defendant.
`
`
`
`DECISION + ORDER ON
`MOTION
`
`---------------------------------------------------------------------------------X
`
`
`
`
`
`The following e-filed documents, listed by NYSCEF document number (Motion 021) 758, 759, 760, 761,
`762, 763, 764, 765, 766, 767, 768, 769, 770, 771, 772, 773, 774, 777, 778, 779, 780, 781, 782, 783, 784,
`785, 786, 787, 788, 810, 811, 812, 813, 814, 815, 816, 817, 818, 819, 820, 821, 822, 823, 824, 825, 826,
`827, 828, 829, 830, 831, 832, 833, 834, 835, 836, 837, 838, 839, 840, 842, 843, 844
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`were read on this motion to/for
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` COMPROMISE
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`.
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`Upon the foregoing documents and for the reasons set forth on the record (12.9.21), the motion
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`must be denied. The proposed settlement can not be approved as a settlement to a derivative
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`action structured with direct payments to certain minority shareholders but excluding relevant
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`injured minority shareholders. The plaintiffs are certain of the minority shareholders that are
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`entitled to payment and can not exclude them from the settlement. Plaintiff counsel’s argument
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`that only his clients and not all of the minority shareholders who were harmed should be paid
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`fails. In a derivative action, a shareholder sues on behalf of all effected shareholders – here the
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`minority shareholders. Having undertaken to claim on behalf of all minority shareholders, the
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`plaintiffs may not limit the rewards reaped by this action to themselves. Allowing plaintiffs to
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`do this would, in effect, provide a windfall to the company as to the other minority shareholders.
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`This is antithetical to the concept of the derivative action that the plaintiffs brought. Thus, the
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`settlement as structured is not fair and reasonable to the effected shareholders and when taken as
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`a whole is “so unfair on its face to preclude judicial approval” (Benedict v Whitman Breed Abbott
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`653594/2018 vs.
`Motion No. 021
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`Page 1 of 6
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`1 of 63 of 815 of 20
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`FILED: NEW YORK COUNTY CLERK 12/15/2021 02:55 PM
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`NYSCEF DOC. NO. 846NYSCEF DOC. NO. 847NYSCEF DOC. NO. 848
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`INDEX NO. 653594/2018INDEX NO. 653594/2018INDEX NO. 653594/2018
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`RECEIVED NYSCEF: 12/10/2021RECEIVED NYSCEF: 12/15/2021RECEIVED NYSCEF: 12/15/2021
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`& Morgan, 77 AD3d 870, 872 [2d Dept 2010], citing Zerkle v Cleveland Cliffs Iron Co., 52 FRD
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`151, 159 [SD NY 1971], quoting Glicken v Bradford¸ 35 FRD 144, 151 [SD NY 1964]; see
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`Mathes v Roberts, 85 FRD 710, 713 [SD NY 1980]; Trainor v Berner, 334 F Supp 1143, 1149
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`[SD NY 1971]).
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`It does not matter that this lawsuit was brought as a derivative action. The nature of the action
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`goes to standing, not the substantive basis for the claim. Here, the substantive basis of the claim
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`was breach of fiduciary duty and fraud on the minority. This requires the court to set a record
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`date to determine the identity of the minority shareholders who were allegedly defrauded. Those
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`shareholders are the record shareholders at the close of business on April 29, 2018 (the Record
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`Date), i.e., the day before the spin-off transaction was announced. These are the shareholders
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`who were given the “Hobson’s choice” (NYSCEF Doc. No. 405 ¶ 10) that forms the basis for
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`this litigation when Renren’s most valuable assets were allegedly siphoned off and it is irrelevant
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`whether they have sold their shares. The harm caused to their investment was immediate and at
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`the time of the announcement because the market is efficient. Investors who purchased shares
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`after the Record Date or who increased their positions during the pendency of this litigation, on
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`the other hand, knew exactly what they were purchasing and can not profit by allocating to
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`themselves the damages due to those harmed.
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`The settlement proceeds pursuant to the proposed settlement are appropriately not structured to
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`be returned to the company, but they can not exclude, and must only include the Record Date
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`injured minority shareholders as to their record holdings on such Record Date. Plaintiff
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`counsel’s reliance on 17 CFR 240.10b-17 and FINRA 11140(b)(1) to argue that the record date
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`653594/2018 vs.
`Motion No. 021
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`Page 2 of 6
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`2 of 64 of 816 of 20
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`FILED: NEW YORK COUNTY CLERK 12/15/2021 02:55 PM
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`NYSCEF DOC. NO. 846NYSCEF DOC. NO. 847NYSCEF DOC. NO. 848
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`INDEX NO. 653594/2018INDEX NO. 653594/2018INDEX NO. 653594/2018
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`RECEIVED NYSCEF: 12/10/2021RECEIVED NYSCEF: 12/15/2021RECEIVED NYSCEF: 12/15/2021
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`can only be set prospectively and therefore only the current minority shareholders (i.e., their
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`clients) should recover fails. This is not a cash dividend or distribution or stock payment from
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`the issuer. This is a settlement payment from the controlling shareholders to the Record Date
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`minority shareholders to recompense the Record Date minority shareholders for the alleged
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`breach of fiduciary duty and fraud on the minority caused by the controlling shareholders and the
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`relevant minority shareholders must recover. The relevant minority shareholders are the Record
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`Date minority shareholders and their interest in the settlement must correspond with their
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`holdings on the Record Date.
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`The settlement also can not provide that unclaimed proceeds should be redistributed. These
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`funds belong to the Record Date minority shareholders and, to the extent any are unclaimed, they
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`should be deposited in the names of the relevant Record Date minority shareholders in the
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`amounts owned on the Record Date who do not come forward with the New York State
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`Comptroller’s office unclaimed property funds or otherwise set aside in escrow with Plaintiff
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`counsel to be held until the expiration of the statute of limitations.
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`Plaintiff counsel’s statement that certain shareholders that he represents have interests that are
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`adverse to the Record Date minority shareholders is both legally untenable and highlights why
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`the court’s role in protecting the injured minority shareholders is sacrosanct. (Saks Inc.
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`Shareholder Litigation v XXX, 2020 WL 1471858 [Sup Ct, NY County 2020]). The settlement
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`funds belong to all of the Record Date minority shareholders that were allegedly defrauded – not
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`just his clients. Put another way, his clients never had an interest in the portion of the settlement
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`653594/2018 vs.
`Motion No. 021
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`Page 3 of 6
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`3 of 65 of 817 of 20
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`FILED: NEW YORK COUNTY CLERK 12/15/2021 02:55 PM
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`NYSCEF DOC. NO. 846NYSCEF DOC. NO. 847NYSCEF DOC. NO. 848
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`INDEX NO. 653594/2018INDEX NO. 653594/2018INDEX NO. 653594/2018
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`RECEIVED NYSCEF: 12/10/2021RECEIVED NYSCEF: 12/15/2021RECEIVED NYSCEF: 12/15/2021
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`proceeds that belong to the other Record Date minority shareholders in the interests that such
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`other Record Date minority shareholders held on the Record Date.
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`Nor can the court arrogate to Plaintiff counsel the determination of whether their request for a
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`whopping $100 million legal fee is appropriate. It is not. The issue of attorneys’ fees is left to the
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`sound discretion of the Court (Gordon v Verizon Communications, Inc., 148 AD3d 146, 165 [1st
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`Dept 2017], quoting Seinfeld v Robinson, 246 AD2d 291, 300 [1st Dept 1998]).
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`Plaintiff counsel confirmed on the record (12.9.21) that they spent approximately 16,938.3 hours.
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`This amounts to approximately $5,903.78 per hour. Taking into account the risks of this
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`litigation, its complexity and the elements of corporate governance reform that the settlement
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`includes, this is unfair and excessive. Legal fees must bear a relationship to the value added and
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`the risks involved and the percentage of legal fees must be inverted to the settlement amount.
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`Stated differently, the higher the settlement amount, the lower the percentage. As Plaintiff
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`counsel is well aware, this court is very familiar with the issues involved and 33 1/3% under the
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`circumstances of this case is simply not appropriate.
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`For the avoidance of doubt, the importance of reviewing the appropriateness of legal fees can not
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`be overstated:
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`If fees are set too low, counsel will not receive fair compensation for their services…If
`fees are set too high, attorneys will receive an unjustified windfall, and some of the
`benefit that should have gone to class members will be diverted to class counsel.
`Excessive class counsel fees might also induce class counsel to bring weak cases.
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`(Theodore Eisenberg et al, Attorneys’ Fees in Class Actions: 2009-2013, 92 NYU L Rev
`937 [2017] [emphasis added]).
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`653594/2018 vs.
`Motion No. 021
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`Page 4 of 6
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`4 of 66 of 818 of 20
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`FILED: NEW YORK COUNTY CLERK 12/15/2021 02:55 PM
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`NYSCEF DOC. NO. 846NYSCEF DOC. NO. 847NYSCEF DOC. NO. 848
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`INDEX NO. 653594/2018INDEX NO. 653594/2018INDEX NO. 653594/2018
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`RECEIVED NYSCEF: 12/10/2021RECEIVED NYSCEF: 12/15/2021RECEIVED NYSCEF: 12/15/2021
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`In other words, were the court to effectively abdicate its role here as requested by Plaintiff
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`counsel in rubber stamping their extraordinary fee request, this could necessarily have the
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`undesired effect of leading to the proliferation of otherwise meritless lawsuits in the hope of
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`bringing a lawsuit to induce quick settlement given the potential upside (see In re Everquote, Inc.
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`Securities Litigation, 65 Misc3d 226 [Sup Ct, NY County 2019] (applying the Private Securities
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`Litigation Reform Act of 1995, which was enacted to combat perceived abuses in securities
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`litigation]).
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`For the avoidance of doubt, it is a false to narrative to conclude that the fee here is only 10.4% of
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`the settlement based on the way certain settlements are structured. This settlement is for $300
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`million and the lawyers are asking for $100 million. That is a 33 1/3% fee, plain and simple.
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`Lastly, the notion that this is really a $965 million settlement ($300 million to the minority
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`shareholders and $665 million to the majority shareholders) where the majority shareholder
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`defendants are recovering for their own alleged fraud on the minority and breach of fiduciary
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`duty because this is styled as a derivative action is wrong. The gravamen of this dispute was that
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`this was a breach of fiduciary duty and a fraud on the minority and plaintiff counsel can not
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`compute its fees based on the amount that plaintiff counsel imputes to the defendants as paying
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`themselves.
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`The court has considered Plaintiff counsel’s remaining arguments and finds them unavailing.
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`653594/2018 vs.
`Motion No. 021
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`Page 5 of 6
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`5 of 67 of 819 of 20
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`FILED: NEW YORK COUNTY CLERK 12/15/2021 02:55 PM
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`NYSCEF DOC. NO. 846NYSCEF DOC. NO. 847NYSCEF DOC. NO. 848
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`INDEX NO. 653594/2018INDEX NO. 653594/2018INDEX NO. 653594/2018
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`RECEIVED NYSCEF: 12/10/2021RECEIVED NYSCEF: 12/15/2021RECEIVED NYSCEF: 12/15/2021
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`12/10/2021
`DATE
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`CHECK ONE:
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`APPLICATION:
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`CHECK IF APPROPRIATE:
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`CASE DISPOSED
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`ANDREW BORROK, JSC
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`X NON-FINAL DISPOSITION
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`GRANTED
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`X DENIED
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`SETTLE ORDER
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`INCLUDES TRANSFER/REASSIGN
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`GRANTED IN PART
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` OTHER
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`SUBMIT ORDER
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`FIDUCIARY APPOINTMENT
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` REFERENCE
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`653594/2018 vs.
`Motion No. 021
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`Page 6 of 6
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`6 of 68 of 820 of 20
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