Orthotec, LLC v Healthpoint Capital, LLC 2013 NY Slip Op 31189(U) May 30, 2013 Sup Ct, New York County Docket Number: /08 Judge: Melvin L.

Transcription

1 Orthotec LLC v Healthpont Captal LLC 2013 NY Slp Op 31189(U) May Sup Ct New York County Docket Number: /08 Judge: Melvn L. Schwetzer Republshed from New York State Unfed Court System's E-Courts Servce. Search E-Courts ( for any addtonal nformaton on ths case. Ths opnon s uncorrected and not selected for offcal publcaton.

2 [* 1] FLED: NEW YORK COUNTY CLERK 06/03/2013 NDEX NO /2008 NYSCEF DOC. NO. 330 RECEVED NYSCEF: 06/03/2013 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HELVN L. S~~6Ln..s~ PART 4"" Justce -y- NDEX NO. '0 1 ~ 17/ O~ MOTON DATE MOTON SEQ. NO. (){JS The followng papers numbered 1 to were read on ths moton to/for w o t=: U) ::).. ~ c W 0::: 0::: W u.. w 0::: >-..J~..J Z ::) 0 u.. U) t ~ W 0::: 3 () W Z 0::: ~ ~ 0 W..J U)..J «0 o u.. - Z :: W o l t=: 0::: o 0 ::E u.. Notce of Moton/Order to Show Cause - Affdavts - Exhbts No(s). Answerng Affdavts - Exhbts No(s). Replyng Affdavts No(s). Upon the foregong papers n s ordered that ths moton j ~ ~ t. C f'lr. "3' to ~ t:/... Co ~NTEj) f:b t4~~ Dated: ~ 3o "1-o'~ (:A'.. tk$~ ~-:: o~1:>en'eb l:fu-~ ~~.-.~ ~OY~.C. 1. CHECK ONE:... 0 CASE DSPOSED ON-FNAL DSP mon 2. CHECK AS APPROPRATE:... MOTON S: 0 GRANTED 0 DENED o GRANTED N PART 0 OTHER 3. CHECK F APPROPRATE:... 0 SETLE ORDER o SUBMT ORDER 000 NOT POST o FDUCARY APPONTMENT 0 REFERENCE

3 [* 2]. SUP~ME COURT OF THE STATE OF NEW YORK COuNTY OF NEW YORK: las PART ~ x ORTH.OTEC LLC -aganst- Plantff HEALTHPONT CAPTAL LLC JOHN FOST~R MORTMER BERKOWTZ HEA~THPONT CAPTAL PARTNERS LP H~ALTHPONT CAPTAL PAR'j~ERS LP and SCENT'X S.A. ndex No /08 DECSON AND ORDER Moton Sequence No. 005 Defendants x MELVN L. SCHWETZER J.: : Defendants Healthpont Captal LLC (HPC) John Foster Mortmer Berkowtz HealtThpont Captal Partners LP (HPC ) and Healthpont Captal Partners LP (HPC ) move for an order pursuant to CPLR 3212 dsmssng the complant. : PlantffOrthoTec LLC (OrthoTec) brought ths acton allegng that the defendants should be held lable for the payment of two judgments whch t obtaned aganst a French comp:tny Eurosurgcal S.A. (Eurosurgcal) n Calforna state and federal courts n 2004 and 2007: based on breaches of an agreement n whch Eurosurgcal had assgned to Ortho Tec the rght fo produce and dstrbute certan of ts spnal surgcal devces n the Unted States and on copyrght and trademark nfrngement. The judgments wth nterest currently total' n excess of $56 mllon. OrthoTec clams that facng these large judgments Eurosurgcal conspred wth the defen~ants to fraudulently transfer all of Eurosurgcal's assets whch t asserts were worth n excess of$47 mllon at the tme of transfer away from the company and leavng t an empty nsol~ent shell. OrthoTec also asserts that under the judgments Eurosurgcal was requred to

4 [* 3] tum oyer manufacturng plans for certan surgcal products and that upon the fraudulent transfer defen~ants came nto possesson of these plans and have refused to tum them over. t further assert~ that t entered nto a contract to sell all ts product rghts to a thrd party but that when t was u*able to delver the plans the purchase prce was reduced by $11 mllon. : Defendants now move for summary judgment urgng that OrthoTec cannot recover from them fuecause the challenged transfers were between Eurosurgcal and another French company Surg~ew S.A.S. and defendants were nqt transferors transferees or benefcares of the transf~r. They contend that New York's fraudulent conveyance law does not permt recovery agan~t them based on ther ownershp of stock n an entty afflated wth the transferee nor does t penn t recovery of the damages that s the amount of the judgments OrthoTec s seekng. They ~lso urge that OrthoTec s askng the court to dsregard the fact that the challenged transfers were ~pproved by the Commercal Court of Arras n France the process was overseen by a prensohency agent far value was derved by a valuaton expert and the transfer was confrmed by an ndependent legal expert. Further defendants urge that based on undsputed facts OrthoTec canndt demonstrate by clear and convncng evdence that defendants acted wth an ntent to defra~d. : OrthoTec counters that ts clams are governed by Calforna law whch permts recovery on a conspracy theory aganst partes such as these defendants based on ther actons and connecton to the transferee and as partes nterferng wth ts ablty to collect on ts judgments.. t argues that even f New York law appled ts damages are recoverable for tortous nterference. j wth ~he collecton of a judgment. t asserts that comty does not prevent t from challengng the j fraudhlent transfers because the French court approval does not curtal ts rght to sue for 2

5 [* 4] fraudutent transfer. Fnally t asserts that Calforna law does not requre proof by clear and conv~cng evdence and even f t dd t can prove such ntent. Background OrthoTec s a Delaware company wth ts prncpal place of busness n Calforna (frst amended complant ~ 1). HPC a Delaware company wth ts prncpal place of busness n New. York ls a prvate equty frm that acqures and manages nvestments n the medcal ndustry. HPC : and HPC are the nvestment funds managed by HPC and the ndvdual defendants John ~oster and Mortmer Berkowtz are resdents of New york and are prncpals ofhpc (d. ~~ 2 4 5). Defendant Scent'x S.A. (Scent'x) s a French company that manufactures spnal: surgcal mplants. HPC owns a one-thrd nterest n Scent'x and Foster and Berkowtz were drectors on Scent'x's board (d. ~ ). n 1998 Ortho T ec and nonparty Eurosurgcal a French company entered nto an assgrment agreement (the Assgnment Agreement) n whch OrthoTec purchased all rghts n the U.lS. to certan Eurosurgcal surgcal devces acqured the rght to market any new products. created by or for Eurosurgcal and gave OrthoTec certan ntellectual property rghts n certan geogr~phcal areas (d. ~ 6-7 see also exhbt 2 to affrmaton of Colleen M. Carey dated Decerj1ber [Carey affrm] at 1-2). Several years nto the agreement Eurosurgcal falsely asserted that OrthoTec owed certan amounts for product purchases and OrthoTec fled sut t} Calforna state court for breach of the assgnment agreement. On August that actory resulted n a jury award n OrthoTec's favor of$8.93 mllon wth an addtonal $596J96.17 n fees and costs (frst amended complant ~ 9 exhbt 5 to Carey affrm). Ths judg~ent was affrmed n June 2007 (frst amended complant ~ 9). Whle that acton was 3

6 [* 5] pend~g OrthoTec brought another acton aganst Eurosurgcal n Calforna federal dstrct court. for nfrngement of ts trademarks and copyrghts. That federal acton resulted n a judgment entered on January n OrthoTec's favor for $30 mllon and Eurosurgcal's subsequent ~ \ appeal was dsmssed (d. ~ 10 see also exhbt 6 to Carey affrm) (collectvely the Calforna Judgrrents). OrthoTec has been unable to collect upon these Calforna Judgments. : On September after the Calforna state court judgment but before the federal courqudgment Eurosurgcal entered nto a Busness Lease Contract (the Busness Lease) wth a Frenc~ company called Surgvew whch gave Surgvew the rght to occupy the premses Euroshrgcal used to take possesson of the busness and ~perate t and to contnue to employ ts empldyees fulfllng exstng contracts wth clents assumng lablty for current purchase order~ assumng all contracts wth surgeons and assumng the equpment used by the busness among other thngs (exhbt 7 to Carey affrm). Surgvew also purchased all of Eurosurgcal's nvenory. The Busness Lease was for an dentfed terrtory whch dd not nclude the areas n whch OrthoTec was assgned n the Assgnment Agreement (e.g. North Amerca Central Amer~ca nda Australa and New Zealand (d. at 2). Eurosurgcal could have sold ts products n these terrtores t just had to do so through OrthoTec under ts Assgnment Agreement (see affd~vt of Patrck Bertranou dated January [Bertranou aft] ~ 8). n the preamble to the B?sness Lease Eurosurgcal specfcally acknowledged that t was encounterng dffcultes from ~ts ltgaton wth OrthoTec and obtaned a pre-nsolvency agent Robert Meynet to assst n mragng the company and preservng the employees whle the OrthoTec ltgaton was ongo~ng (exhbt 7 to Carey affrm at 1). Upon termnaton of the Busness Lease Eurosurgcal was rfqured to repurchase the nventory (d. at 7-8 artcle 6). On September Mr. 4

7 [* 6]. Meymh presented to the Commercal Court of Arras France the Busness Lease requestng that the co~rt ratfy t whch the court dd (exhbt 12 to Carey affrm declaraton of Robert Meynet fled n Calforna state court acton dated September [Meynet Declaraton] at ~~ 5-8). " Orthoec was not aware of nor was t a.party to the proceedngs before the Commercal Court of Arras: and t dd not receve notce of any request that the Arras court approve the transacton (Bertranou aff ~ 9). : Several months before n June 2004 HPC through a Luxembourg afflate Healthpont Capt~l (Luxembourg) S.a.r.l. acqured a 33.1 percent nterest n Scent'x (exhbt 24 to Carey affm affdavt of Mortmer Berkowtz dated December [Berkowtz aff] ~ 7). One year after Eurosurgcal and Surgvew entered nto the Busness Lease n July 2005 Scent'x acqured a 73 percent nterest "n Surgvew (d. ~ 9). : On Aprl OrthoTec entered nto an asset purchase agreement wth Choce Spne n wh~ch t sold ts product rghts to the Eurosurgcal products n the Unted States to Choce Spne: at an orgnal purchase prce of $16 mllon (Bertranou aff ~ 13 and exhbt 139 annexed_ thereto). n order to effect ths sale OrthoTec made repeated demands on Eurosurgcal to tum over plans and specfcatons for the products to whch the Calforna state court adjudged OrthoTec to own the rghts and Eurosurgcal never compled (Bertranou aff ~~ 14-16). Because ofo~hotec's nablty to obtan these plans and specfcatons by a thrd amendment to the parte's' asset purchase agreem-ent dated Aprl OrthoTec clams t reduced ts purchase prce ~o Choce Spne to $5.225 mllon (d. and exhbt 152 annexed thereto). On May Eurosurgcal then entered nto a Partal Sale oflndustral and " Commercal Busness (the PSA) wth Surgvew n whch t sold the busness the commercal 5

8 [* 7] name ''Eurosurgcal" the clentele and all related assets the ndustral property rghts the rght to lease the premses the nventory the beneft of the lease agreement and real estate loans descrbed theren and the beneft of contracts for the dstrbuton of the products lsted n an appen~x (exhbt 8 to Carey affrm at 1-2). Bascally Eurosurgcal sold everythng ~hch represfnted the busness n all terrtores except for the terrtores or zones whch OrthoTec had ~ been alssgned - North Amerca (USA and Canada) Central Amerca nda Australa and New Zeala~d (d at 2). Eurosurgcal also agreed to wthn three months followng ts entry nto the PSA remove all lens on the busness (d at 3 exhbt 39 to Bertranou aff at 3). Together these 1 lens ~mounted to just over 2 mllon euros (d). The PSA purchase prce was 1.6 mllon euros (d atj8 see exhbt 12 to Carey affrm. Meynet declaraton ~13). Scent'x allegedly loaned Surg~ew the $2 mllon t needed to put nto escrow under the PSA (exhbt 3 to Carey affrm frst a~ended complant ~ 20). Agan OrthoTec dd not receve notce of ths transacton (Bertr~nou aff ~ 9). On July publc notce regardng Eurosurgcal's sale to Surgvew was publshed n the French newspaper called "BODACC" and n the local Arras paper but'orthotec dd not see su h notce (d). On October the commercal court of Arras approved the sale of :. the gdod wll and the physcal plant of Eurosurgcal to Surgvew (exhbt 12 to Carey affrm " Meyn~t declaraton ~~ ). On July Eurosurgcal fled to lqudate n bankruptcy "n France (affdavt of " " Arlett Bardon dated January [Bardon aff] ~ 5 and exhbt A annexed thereto). " : On November HPC acqured majorty ownershp of Scent' x and acqured a. 4.9 P9rcent nterest n Surgvew (exhbt 24 to Carey affrm Berkowtz aff ~ 12). 6

9 [* 8] 1 On May OrthoTec commenced ths acton assertng three causes of acton: ' fraudtlent transfer fraudulent conveyance under New York Debtor and Credtor Law (DCL) 273 et: seq. and ntentonal nterference wth prospectve economc advantage (exhbt 3 to Carey affrm~. Defendants now move for summary judgment seekng dsmssal of all of OrthoTec's clams. Frst they argue that there s no thrd-party lablty for fraudulent transfer and fraudulent conveyance clams under New York common law and the DCL. They contend that t s unds~uted that the challenged transfers took place between Eurosurgcal and Surgvew - not the : defen4ants and that they have submtted undsputed proof that they had no nvolvement wth those partes at the tme of the relevant events. They contend that an acton for fraudulent transfer n New York does not create a remedy for money damages aganst thrd partes who assst pr conspre wth the debtor. They assert that under the DCL only transferees of the assets or benefcares of the conveyance may be held lable and that non-transferees or non benef:cares are not lable solely for assstng the transfer. They urge that holdng stock owne~shp n a company that owned an nterest n the transferee s too attenuated a relatonshp to be a tr.ansferee or benefcary of a conveyance. They assert that the PSA was between Euros~rgcal and Surgvew wth Surgvew beng the transferee and that none of the defendants were ~ party to that transfer receved any funds ndvdually and they only held a mnorty nterest n an afflated company of the transferee whch s nsuffcent asa matter of law. Second defendants urge that OrthoTec cannot obtan the remedy t seeks as a matter of law. Rather the remedy n such an acton s lmted to reachng the property whch would have 7

10 [* 9] been avalable to satsfy the judgment had there been no conveyance- not for damages aganst partej who caused the transfer n the amount of unpad court judgments for the credtor's loss. j Next defendants assert that the challenged transfer was conducted n accordance wth Frenc~ law by obtanng the approval of the Busness Lease and the PSA from the Commercal Court :of Arras whch approval s enttled to comty. Defendants submt the report of ther French legal expert Professor Alan Petrancosta who opned that the transactons and procecures by Eurosurgcal were not nherently abnormal or suspcous and that they went beyon~ the mnmal legal requrements n France (exhbt 14 to Carey affrm at 3-14). They pont ~o the fact that the transfer was publcally dsclosed as requred by French law - once n the Gazet~e Nord-Pas Calas (exhbt 9 to Carey affrm at see also exhbt 58 to Carey affrm~ declaraton of Save ro Cuaba dated March ~ 4) ~nd twce n the BODACC n July ahd August 2006 (exhbt 12 to Carey affrm Meynet declaraton ~ 16 and exhbt 6 annex~d thereto exhbt 9 to Carey affrm at exhbt 10 to Carey affrm deposton of Alan Petrancosta at 69-70). Fnally defendants urge that plantff cannot show clear and convncng evdence of an ntentto hnder delay or defraud requrng dsmssal of ther clams. They pont to evdence that they had no role n the Busness Lease or ts negotaton and had no ownershp nterest n ether Euros~rgcal or Surgvew at that tme (exhbt 24 to Carey affrm Berkowtz aff ~ 8). Defendants further submt that HPC and HPC had no role n the negotaton of the PSA and were ~ot partes to t (d. ~ 10). Defendants urge that plantff s conspracy theory defes logc cons~erng that voluntarly Eurosurgcal contacted OrthoTec before enterng nto the Busness Lease subjected tself to the French co~rt scrutny engaged an ndependent pre-nsolvency agent 8

11 [* 10] Mr. ~eynet hred and ndependent valuaton expert Mr. Preud'homme who opned that far consderaton was pad obtaned an ndependent French law expert opnon and placed. approprate legal notces n French papers (d. ~~ 2-10). Wth respect to plantffs ntentonal nterference clam defendants urge that plantff canno~ establsh a prma face clam because t cannot show the exstence of a prospectve relat~nshp- the Eurosurgcal judgments are not such a relatonshp. The Assgnment Agree:ment and the agreement plantff entered nto wth Choce Spne could not qualfy as the Assgnment Agreement was already breached n 2002 and the Choce Spne agreement was alread~ entered nto and was not a prospectve relatonshp. Further even f the Choce Spne agreement could form the bass of the clam defendants assert that the clam fals because the undsputed facts show that defendants dd not nterfere wth that relatonshp drectly nor dd they convnce Choce Spne not to enter nto a contractual relatonshp wth plantff or act wth the requste malce. They pont to the testmony of Rchard Henson from Choce Spne who testfed that he never spoke to Foster Berkowtz or anyone at the HPC enttes regardng Choce Spne:s agreement wth OrthoTec and no one from the HPC enttes tred to dssuade hm from / enterhg nto the agreement or threatened hm physcally or otherwse n connecton therewth (exh~t 46 to Carey affrm deposton of Rchard Henson at 31-32). Mr. Bertranou never told defendants he had a busness deal contngent upon defendants' actons but nstead sought to sell Ortho'ec's rghts to the HPC enttes (exhbt 20 to Carey affrm at response 9 and exhbt 61 to Carey affrm). Fnally defendants argue that at the least the clams aganst the ndvdual defen~ants Foster and Berkowtz must be dsmssed because there s no personal lablty under French law for ther actons taken as drectors of Scent'x. 9

12 [* 11] : n opposton plantff frst contends that defendants fal to support ther moton wth admssble evdence relyng on unauthentcated documents and wtnesses attestng to facts wthout personal knowledge. Plantff also contends that ts allegatons not the ttles of ts clam~ govern. Thus plantff asserts that the substance of ts clams state cognzable clams under Falforna and New York law and the evdence supports such clams. Plantff urges that under~ew York's choce of law rules Calforna law apples because that s where the njury occurred where plantff s located. t contends that under Calforna law partes who ad a fraudtlent transfer and who conspre wth a debtor to conceal assets fot the purpose of.. defrau~ng credtors are gulty on a clam for fraudulent conveyance. Plantff asserts that defemfants as benefcal owners of Surgvew (Ross affdavt exhbt F deposton of John Foster at ) each beneftted at least ndrectly from the fraudulent conveyance and that defenqants Berkowtz and Foster personally drected the transacton so they conspred to volate Calfo~a's fraudulent conveyance law and are personally lable. Plantff also asserts that n Calfohla a credtor can recover ts damages not just the fraudulently transferred assets as well as pu~tve damages. Alternatvely plantff urges that t may proceed n ts frst cause of acton under New York ommon law for defendants's unlawful nterference wth plantff s collecton of ts judgm:ents. Ths clam plantff urges may be asserted aganst one who s nether a transferor nor a?enefcary of the transfer. : Plantff next challenges defendants's contenton that the French "Commercal Court of Arras'f whch purportedly approved the transacton s enttled to any comty because ts approval does ~ot bar the rghts of a non-sgnatory such as plantff from challengng the agreement or 10

13 [* 12] sung :for fraudulent transfer of assets. t submts the affdavt of ts French legal expert Arlette Bardo:n who opnes that such agreements are enforceable between the partes thereto but do'not. bar nqn-sgnatores from challengng them (Bardon aff ~ 4) and defendants's expert Professor Petrapcosta agrees (exhbt 14 to Carey affrm at 8). Snce plantff dd not partcpate and was not a sgnatory t s not bound by or restrcted n ts rghts as credtor of Eurosurgcal by the Frenc~ court proceedng. n any event plantff contends there s a sharp dspute of fact as to the legttpacy of the French proceedng. On the ssue of ntent plantff mantans that under Calforna law t has asserted a: clam for co~structve fraudulent transfer- that s a transfer made wthout reasonably equvalent value by one who s nsolvent or rendered nsolvent whch does not requre proof of actual fraudulent ntent(see Cal Cv Code Meja v Reed 31 Cal 4th [2003]). Plantff urges that there s suffcent evdence here that Eurosurgcal sold ts busness wthout recevng reasoqably equvalent value sellng t for 1.6 mllon euros (exhbt 8 to Carey affrm PSA at 8) and plantffs expert economst Robert Wunderlch opnes that t was actually worth over 36 mllop euros (affdavt of Robert Wunderlch dated January [Wunderlch aft] and exhbt A annexed thereto at'2 6-12). The sale left Eurosurgcal nsolvent n that the purchase prce Was nsuffcent even for t to payoff Eurosurgcal' s other credtors (besdes plantff). ' Plant~ff further argues that under Calforna law t s enough f the plantff proves that the. consprators knew that the transferor sought to defraud or hnder credtors and proof need only be by ~ preponderance of the evdence. n any event plantff asserts that whether a conveyance was rrtade wth fraudulent ntent s a queston of fact as t s here. 11

14 [* 13] j On the ntentonal nterference clam plantff asserts that under ether New York or Calforna law the Calforna Judgments qualfy as prospectve economc advantage. Plantff conte~ds that n Calforna ajudgment s a contract and thus nterference wth ajudgment s nterf~rence wth a contract. n New York at common law a clam for tortous nterference wth the copecton of a judgment s recognzed and lablty may be extended beyond transferees and beneftares. t contends that t s enttled to pursue ts clam whether t s for tortous nterf~rence wth contract or wth prospectve economc advantage. n addton plantff mant~n~ that by preventng t from obtanng the manufacturng plans defendants used wrongful means and nterfered wth plantffs ablty to sell ts product rghts to Choce Spn~. t ponts to the Assgnment Agreement provson requrng Eurosurgcal to turn over the plans (Betrapou aff exhbt 119 4) plantffs Calforna state court judgment requrng Eurosurgcal to tur~ over the plans (Bertranou aff~ 14 and exhbt 81 annexed thereto at 7 ~ 5) Surgvew's posse~son of all Eurosurgcal's assets defendants' ndrect ownershp or control of Surgvew----- (affd4vt of Peter W. Ross n opposton dated January [Ross aft] exhbt B deposton of John Foster at 99) defendants' knowledge of the state court judgment but falure to act to ~nsure plans were turned over (Ross aff exhbt E deposton of Mortmer Berkowtz at and exhbt B Foster dep at ) and the fact that plantff never receved the manufacturng plans and had to reduce the purchase prce n ts agreement wth Ghoce Spne (Bertranou aff~~ ). By these actons plantff contends defendants nterfered wth plantffs enforcement of the Calforna Judgments and wth ts sale agreement wth Ghoce Spne. 12

15 [* 14] : On the ssue of the lablty of defendants Berkowtz and Foster plantff asserts that Frenc~ law does not apply- ether Calforna or New York law apples whch do not conflct. Thus under ether of those state's law drectors and offcers may be held lable on a fraud clam ftheypartcpated n drectly ordered or authorzed the fraud even f they dd not stand to gan persorlally. Plantff contends that the evdence establshes that Foster and Berkowtz were J drectly nvolved n the fraudulent transfer. : n reply defendants assert that plantff cannot now after dscovery s complete and the " note of ssue was fled on October amend ts complant to change the theory of ts " ) clam to one for ntentonal nterference wth the collecton of a judgment. They then argue that even t the clam could be construed as plantff urges t cannot demonstrate the elements of such a clarrt because t cannot show that defendants made the purported transfers wth the ntent and objectve of deprvng plantff of the opportunty to collect on ts judgment. At most plantff could Uemonstrate that defendants were aware of the Calforna state court judgment n 2004 and had c~nsdered and had rejected an nvestment n Eurosurgcal n There s no evdence of any ll~gal conduct by defendants just evdence that they acted n ther own economc nterest whch(s not enough to establsh malce". They also urge that French law apples under New York'~ choce oflaw prncples and French law does not pennt recovery aganst defendants who were Qot transferees. Even f Calforna law apples defendants assert that plantff cannot demorstrate suffcent "badges of fraud" so that the facts add up to an actual fraudulent transfer. 1 They vrge that plantff fals to demonstrate that they are transferees or that they had domnon and cqntrol over the transferee or over the assets. They pont to the lack of connecton between Euros~rgcal and Surgvew as debtor and transferee on the one hand and defendants on the 13

16 [* 15] other. Only HPC held a mnorty nterest through a Luxembourg subsdary n Scent' x 1 Surgyew's parent company (exhbt 24 to Carey affrm Berkowtz aff ~~ 79 and exhbt 25 affdavt of John Foster ~ 3). Ths s not suffcent. Plantffs conspracy theory fals because t fals t9 demonstrate an underlyng fraudulent transfer by a prmary tortfeasor whch defendants. joned as consprators. Defendants assert that they were not the transferee they were not partes to the transfer agreement they dd not beneft from the transfer and they dd not create the trans~eree for the purpose of completng a fraudulent transfer. Addtonally they contend that there ~s no ntent to defraud based on evdence that Eursurgcal contacted plantff before executng the Busness Lease voluntarly subjected tself to French court scrutnyvoluntarly enga~ed Mr. Meyner as ts ndependent pre-nsolvency agent hred Mr. Preud'homme as an ndependent valuaton expert who opned that the consderaton pad was far obtaned an expert legal 9pnon and publczed the PSA n the approprate French paper for legal notces (exhbt 24 to ~arey affrm Berkowtz aff ~~ 2-10). ~ Defendants contend that the tortous nterference clam cannot be based on the Judgments becau~e the Calforna courts have dstngushed between ajudgment entered after ltgaton and contrjcts derved through the partes's mutual agreement. They assert that plantff has not and cann~t cte a Calforna case n whch such a clam s based on a judgment because there are none. Judgments may be lke a contract because they are enforceable between the partes but they ~re not construed as a contract for purposes of a thrd party. The ntentonal nterference clam's not mantanable wth regard to the Choce Spne agreement because defendants had no oblgaton regardng the manufacturng plans and so the falure to delver them was not wrongful and t~er nacton was not desgned to nterfere wth the agreement. Fnally wth respect to 14

17 [* 16] Foste~ and Berkowtz defendants mantan that French law apples to ther personal lablty for acton$ taken as drectors of Scent' x a French corporaton and under such law the clam must ~ be dsnssed (see Petrancosta aff). Dscusson The defendants' moton for summary judgment s granted only to the extent that the secon~ cause of acton for.volaton of DCL 273 et seq. s dsmssed and s otherwse dened. : The frst ssue to be resolved on ths moton s whch law s to be appled to plantffs 1 fraud4lent conveyance and tortous nterference clams - New York law or Calforna law. n detef1.1nng whch law s to be appled the frst ssue to be determned s whether there s an actual conflct between the laws of the jursdctons nvolved (Matter of Allstate ns. Co. [Solarz] v New: Jersey Mfrs. ns. Co. 81 NY2d [1993] Elson v Defren 283 AD2d [1st dept 2001]). Calforna follows the Unform Fraudulent Transfer Act (UFTA) (Cal Cv Code 3439 et seq.) but New York has adopted the Unform Fraudulent Conveyance Act (UFCA) (NY DCL ch 12 ~rtcle 10). Whle these two statutes are substantally smlar they also dffern several respects (see Allstate ns. Co. v Countrywde Fn. Corp. 842 F Supp 2d [CD Cal 2012] Drens v Halganns 452 F Supp 2d [SO NY 2006]). The UFT X whch Calforna follows specfcally sets forth "badges of fraud" from whch an nfere~ce of fraudulent ntent may be drawn for actual fraud (CalfCv Code [b]) where~s New York looks to the common law (see Allstate ns. Co. v Countrywde Fn. Corp. 842 F:Supp 2d at [analyzng choce oflaw for fraudulent transfer clam between llnos an UFTA state and New York an UFCA state] MFS/Sun Lfe Trust-Hgh Yeld Seres 'v 1 '. Van l1usen Arport Servs. Co. 910 F Supp [SO NY 1995] Marne Mdland Bank v 15

18 [* 17] Murkof 120 AD2d [2d Dept 1986] appeal dsmssed 69 NY2d 875 [1987]). Under Calfoba's UFT A an actual fraudulent transfer s one whch was made wth "actual ntent to hnde~ delay or defraud any credtor of the debtor" (CalfCv Code [a] [1]). For ~' const~ctve fraud a transfer s fraudulent f the debtor dd not receve a "reasonably equvalent value fn exchange for the transfer" and the debtor s or s about to become nsolvent (d @4 [a] [2]). A transferee's good fath s rrelevant to determnaton of the adequacy of consderaton. n New York every transfer made wth actual ntent to defraud exstng or future credtors s fraudulent rrespectve of good fath or exchange of far consderaton (NY DCL 276). Wth. respect to constructve fraudulent transfers however there must be an absence of "far cons~eraton" (NY DCL 272 [a]). "Far consderaton" s defned as requrng both "far equv~lent" value and "good fath" (d.). Therefore unlke n Calforna n New York the. transferee's good fath s relevant. n addton under Calforna law a credtor may pursue consp~rators wth the debtor or transferee (Qwest Communcatons Corp. v Wesz 278 F Supp 2d 1188 : [SD Cal 2003] [Calforna law]) whereas under New York law a clam s ' actonable only aganst the transferee and those who beneftted from the transfer and.not those who conspred or aded and abetted the transferee (see Paradgm BoDevces nc. v Vscoglos Bros.LLC 842 F Supp 2d [SO NY 2012] [New York law]). Because there/s a confl~t between New York and Calforna law (see Allstate ns. Co. v Countrywde Fn. Corp. 842 FSupp 2d at 1224 [conflct exsts between UFTA and'ufca] Drens v Halganns 452 F Supp 2d at [same]) New York conflct oflaw prncples wll be appled to determne whch law apples to these clams. 16

19 [* 18] Wth respect to tort-clams New York employs the "nterest analyss" applyng the law of the jufsdcton wth the greatest nterest n the acton. That approach mandates applcaton of Calf~rna law here. Where the laws alleged to be n conflct are conduct-regulatng such as fraudulent conveyance statutes (Drens v Halganns 452 F Supp 2d at 427) "the law of the jursd~cton where the tort occurred wll generally apply because that jursdcton has the greatest ntere~t n regulatng behavor wthn ts borders" (Penson Comm. of Unv. of Montreal Penson Plan v Bane of Am. Sees. LLC 446 F Supp 2d [SD NY 2006] [nternal quotaton marks and ctaton omtted] see also Paradgm BoDevees nc. v Vseoglos Bros. LLC 842 F Supp 2d at 665). As a general matter a tort occurs where the njury was nflcted whch s usually where: the plantff s located (Drens v Halganns 452 F Supp 2d at 427). n fraud clams the param:ount concern of a court s the locus of the fraud whch agan s where the njury s nflcted not w~ere the fraudulent act orgnated (Allstate ns. Co. v Countrywde Fn. Corp. 842 F Supp 2d at 1223). n the nstant case the place of njury s Calforna because that s where the plant:ff a Delaware company wth ts prncpal place of busness n Calforna felt the economc njury of defendants' alleged tortous behavor (see Schultz v Boy Scouts of Am. 65 NY2d [1)985]). Ths s also true for plantff's thrd cause of acton for nterference wth t prospectve economc advantage and to the extent that there are any dfferences n Calforna and N~w York law regardng that clam Calforna law wll be appled as that s where the tort occurr~d. Defendants' relance on Atseo Ltd. v Swanson (29 AD3d 465 [1 st Dept 2006]) and James: v Powell (19 NY2d [1967]) s msplaced as both are factually dstngushable. n James v Powell the court appled the laws of Puerto Rco because the case nvolved the transfer of lall(~ located n Puerto Rco. n Alseo Ltd. v Swanson the underlyng judgment was from a 17

20 [* 19] Mala~san proceedng and t nvolved a Malaysan ctzen conveyng property out of Malaysa and t~erefore the court appled that law rather than the law of the Cayman slands where the plantff was ncorporated or Japanwhere t was a ctzen. Here snce the plantffs njures occu~ed n Calforna as that s wh~re t s located and the Calforna Judgments arose out of lawsu~ts n Calforna Calforna law wll therefore apply to the tort clams (see Cooney v Osgo~d Mach. 81 NY2d [1993]). : A fraudulent conveyance under Calforna's Unform Fraudulent Transfer Act (CUFTA). nvoles a "transfer by the debtor of property to a thrd person undertaken wth the ntent to preve~t a credtor from reachng that nterest to satsfy ts clam" (Flp v Bucurencu 129 Cal App 4th [Cal App 2005] [nternal quotaton marks and ctaton omtted]). A transfer s fraudt}lent f the debtor made the transfer "[w]th actual ntent to hnder delay or defraud any credt9r of the debtor... " (Cal Cv Code [a] [1]). The courts consder any and all "badges of fraud" set forth n the statute to determne actual ntent ncludng: "( 1) Whether the transfer or oblgaton was to an nsder. (2) Whether the debtor retaned possesson or control of the property transferred after the transfer. (3) Whether the transfer or oblgaton was dsclosed or concealed. (4) Whether before the transfer was made or oblgaton was ncurred the debtor had been sued or threatened wth sut. (5) Whether the transfer was of substantally all the debtor's assets. (6) Whether the debtor absconded. 18

21 [* 20] (7) Whether the debtor removed or concealed assets. (8) Whether the value of the consderaton receved by the debtor was reasonably equvalent to the value of the asset transferred or the amount of the oblgaton ncurred. (9) Whether the debtor was nsolvent or became nsolvent shortly after the transfer was made or the oblgaton was ncurred. (10) Whether the transfer occurred shortly before or shortly after a substantal debt was ncurred. (11) Whether the debtor transferred the essental assets of the busness to a lenholder who transferred the assets to an nsder of the debtor" (Cal Cv Code [b]). The presence of several of these badges of fraud does not autom~tcally lead to the concluson that there was an actual ntent to defraud. nstead the badges must be vewed as a whole and examned for the strength of the nference of actual ntent to defr~ud that those ndca permt (see Allstate ns. Co. v Countrywde Fn. Corp. 842 F Supp 2d at [applyng llnos law whch also adopted UFT A]). A person who "took n good fath and for reasonably equvalent value" has a complete defense to the clam (Cal Cv Code :8 [a]). Damages are "the value of the asset transferred... or the amount necessary to satsfyahe credtor's clam whchever s less" and that value s assessed at the tme of the. transfer(d [b] and [c]). : The credtor's judgment may be entered aganst "(1) the frst transferee of the asset (2) a subsequent transferee who dd not take for value n good fath or (3) the person for whose beneft the tra~sfer was made" (Qwest Communcatons Corp. v Wesz 278 F Supp 2d at 1190 ctng Cal Cv Code [b]). "A transfer s not vodable aganst a person 'who took n good fath 19

22 [* 21] and for a reasonably equvalent value or aganst any subsequent transferee... '" (Flp v Bucur~ncu 129 Cal App 4th at 830 quotng Cal Cv Code [a]). Generally the benef ares of a fraudulent transfer are the transferee who obtans the assets or the debtor who avods a credtor (Qwest Communcatons Corp. v Wesz 278 F Supp 2d at 1191). The. Calfo~a courts however have extended lablty for example to a parent entty that created a. wholly-owned subsdary to receve the transfer and was the party to the transfer agreement and to the rewly-created subsdary (Monastra v Konca Bus. Mach. U.S.A. nc. 43 Cal App 4th [Cal App 1996]) to the majorty shareholder and presdent of the debtor corpo~aton as a benefcary where the assets of the falng debtor were transferred to that shareholder's father (Qwest Communcatons Corp. v Wesz 278 F Supp 2d at 1191) and to the. former wfe and daughter of the debtor who were the sole shareholders of the transferee corporaton (Flp v Bucurencu 129 Cal App 4th at ) Lablty has also oeen extended based pn a conspracy theory beyond transferees (see Qwest Communcatons Corp. v Wesz 278 F Supp 2d at 1192 [conspracy theory may be used to extend lablty to person as co- consp:rator] Fdelty Natl. Fn. nc. v Fredman 2009 WL US Dst LEXS 40732:[CD Cal Apr No. CV CAS (JWJx)] [federal dstrct court fnds ssues of fact as to whether defendant partcpated n volaton of CUFT A and also conspred wth debtor~ to fraudulently transfer assets]) see also Forum ns. Co. v Comparet 62 Fed Appx [9: h Cr 2003] [Calforna recognzes clam for conspracy to commt fraudulent transfer allowhg a plantff to recover legal damages to the amount of property fraudulently transferred or j amoul1t of the debt whchever s less D. Conspracy s a legal theory used to mpose lablty on a " person who dd not actually commt the tort tself but who shared a common plan wth the 1 20

23 [* 22] tortfea~ors to perpetrate the fraud (Appled Equp. Corp. v Ltton Saud Araba Ltd. 7 Cal 4th 503 5JO P2d [Cal 1994]). t s well settled n Calforna that conspracy lablty cannot arse vcarously out of partcpaton n the conspracy tself. nstead the consprator must already owe an ndependent legal duty to the plantff the breach of whch wll suppo~ an acton aganst members of the conspracy ndvdually (see Appled Equp. Corp. v Ltton ~aud Araba Ltd. 7 Cal 4th at Doctors' Co. v Superor Court 49 Cal 3d P2d 508 [1989] Gruenberg v Aetna ns. Co. 9 Cal 3d 566 [1973] Chavers v Gatke Corp. 107 Cal AAP 4th [Cal App 2003] Ferrs v Gatke Corp. 107 Cal App 4th [Cal A~p 2003]). The consprator must be legally capable of commttng the tort that s the consprator must owe a duty to plantff recognzed by the law and be potentally subject to lablt~ for breach thereof (Appled Equp. Corp. v Ltton Saud Araba Ltd. 7 Cal 4th at 511). "[A] d~btor and those who conspre wth hm to conceal hs assets for the purpose of defraudng credt~rs are gulty of commttng a tort and each s lable for damages" (Taylor v S & M Lamp Co. 190 Cal App 2d [Cal App 1961]). n Qwest Comm. Corp. the court found that the alleged consprator had a duty not to commt a fraud upon the credtor notng that "[]ndeed everyone owes a duty not to commt an ntentonal tort aganst anyone" (278 F Supp 2d at &. n 4 [emphass n orgnal] Flp v Bucurencu 129 Cal App 4th at 83 7 [clam under UFT A nvolves tortous conduct of fraudulently transferrng property whch may form bass for.. consptacy clam]). Defendants challenge plantff s fraudulent transfer clam on the ground that there s no thrd-p~rty lablty for such a clam. They contend that any possble connecton between them and Su'rgvew came after the Busness Lease and PSA and s too far attenuated to hold them 21

24 [* 23].' lable ~ven under the Calforna fraudulent transfer law. They pont to the fact that the PSA was entere~ nto between Eurosurgcal the debtor and Surgvew the transferee and not the defendants whch had no nvolvement wth ether of those partes at that tme. They submt that HPC ~ a holdng company whch does not make drect nvestments n companes and that t never tnvested n Eurosurgcal Surgvew or Sc~nt'x(exhbt 24 to Carey affrm Berkowtz aff. ~ 2). They further submt that HPC and HPC never nvested n Eurosurgcal and that n May 2006 (when the PSA was executed) the only nterest held by the defendants was HPC 's prevo~s acquston (n June 2004) ofa 33.1 % nterest n Scent'x (d. ~~ 4-7). At that tme Scentjx dd not own any stock n Eurosurgcal or Surgvew (d. ~ 7). After that acquston defendants Berkowtz and Foster both of whom were drectors and offcers ofhpc served on the board of Scent'x (d. exhbt 25 to Carey affrm affdavt of John H. Foster dated December [Foster aft] ~ 3). Defendants Berkowtz and Foster both averthat they never personally 4 owned stock n Eurosurgcal or Surgvew (Berkowtz aff ~ 6 Foster aff ~ 2). Then n July ~cent'x purchased a 73% nterest n Surgvew (exhbt 24 to Carey affrm Berkowtz aff ~~ 79). Thus at the tme of the PSA (n May 2006) HPC owned a one-thrd nterest n Scent'x a company that owned a majorty nterest n the transferee Surgvew. Almost one and a half years after the PSA HPC acqured majorty ownershp of Scent'x and HPC through a Lux~mbourg afflate acqured a mnorty (4.9 %) nterest n Surgvcw (d. ~ 12). Defendant Berko~tz though admts that he dd partcpate n a Scent'x board meetng on March n whch the board authorzed Mr. Olver Carl majorty owner and presdent of Scent'x to explore the de~ of Surgvew enterng nto a purchase agreement wth Eurosurgcal (d. ~ 11). Defendants urge that plantff fals to present any case law to support ts asserton of defendants' 22

25 [* 24] lablty. They further urge that whle Calforna courts have recognzed a conspracy theory n : conne~ton wth a fraudulent transfer clam plantff fals to demonstrate that defendants were beneffares of the transfer famly or related members of the debtor were partes to the transfer agree~ent or created the transferee n order to complete a fraudulent transfer (cf Qwest Comm~ncatons Corp. v Wesz 278 F Supp 2d at 1192 Flp v Bucurencu 129 Cal App 4th at 830 "10nastra v Konca Bus. Mach. US.A. nc. 43 Cal App 4th at ). Plantff however has submtted evdence rasng a trable ssue as to whether defend~nts conspred wth Eurosurgcal the debtor and Surgvew the transferee to fraudulently transfe:r Eurosurgcal's assets knowng of and n order to avod plantffs Calforna Judgm~nts. t submts proof n the form of Berkowtz's deposton testmony that the HPC ' defend:ants were nterested n acqurng Eurosurgcal snce 2004 two years before the PSA took place (~xhbt E to Ross aff Berkowtz Qecember deposton [Berkowtz dep ] at ~ ). n ths testmony Berkowtz admtted that as early as May 2004 the HPC defendants were evaluatng a potental acquston of Eurosurgcal (d). The HPC defendants's emalsalso ndcated that they brought Mr. Carl nto the deal to act as ther agent and bd for Eurosurgcal whle they provded the fnancng (d at 86-87). Berkowtz also attested that they were atvare of plantffs Calforna state court judgment by July nearly two years before the PSA (d at see also exhbt A. to supplemental affrmaton of Peter W. Ross [Ross ~upplemental affrm] Berkowtz March Deposton [Berkowtz dep ] at ' and expbt E. Berkowtz dep at 51) and that they knew that Eurosurgcal could not go nto bankrjptcy because plantff would be the largest credtor and would n effect take all the equty n Eurosurgcal to pay the Calforna Judgments (exhbt E to Ross aff Berkowtz Dep at 95-23

26 [* 25] 96). ~erkowtzfurther testfed'that n the fall of2004 he personally vsted Eurosurgcal "[t]o. under~tand the busness of Eurosurgcal and [sc] opportunty to - to combne actvtes wth them ~nd Scent'x and the growth potental of the busness" and arranged for defendant Foster to me~t wth Eurosurgcal's presdent Guy Vart (d at ). He also testfed regardng the mnut~s of a Scent' x board meetng at whch he and Foster attended as members whch ndcated that plantff had obtaned a judgment aganst Eurosurgcal for $9 mllon and that. "Scen~'x has been approached by Eurosurgcal n an attempt to protect ts assets" respondng that h~ could not recall what that meant (exhbt A.l to Ross supplemental aff Berkowtz dep at 71- ~2 and exhbt 131 annexed thereto at HPC ). He testfed that Eurosurgcal entere4 nto the Busness Lease wth Surgvew essentally leasng ts entre busness as a way for t t6 contnue wthout payng the debt to plantff (exhbt E to Ross aff Berkowtz dep at ). Plantff submts an October emal between Foster and Tm Berkowtz also of HP n whch Berkowtz cautons "we can't [tell] anyone what the end game s wth Euros~rgcal" (exhbt 24 to Ross aff see also exhbt E to Ross aff Berkowtz dep at ). Plantff ponts to the fact that almost a year before the PSA Scent' x obtaned a 73% majorty nterest controllng Surgvew that the HPC defendants 'owned a 33% nterest at the tme of transfe~ and then later a majorty nterest n Scent' x Surgvew's parent entty. Berkowtz' hmself admtted that HPC's nvestment commttee whch ncluded hmself and Foster unan~ously approved the purchase by Surgvew of the assets ~f Eurosurgcal n May 2006 whch kpproval was necessary because HPC owned a thrd of the busness and wthout ther j approv~l no deal would have taken place (exhbt E to Ross aff Berkowtz dep au 0-11). Ths evdenbe submtted by plantff s suffcent to rase a trable ssue of fact as to whether these 24

27 [* 26] defen~ants conspred wth Eurosurgcal to conceal ts assets for the purpose of defraudng plant:ff and as to whether they ntended to hnder or delay plantff s collecton of ts judgments (see Monastra v Konca Bus. Mach. US.A. nc. 43 Cal App 4th at see also Qwest Communcatons Corp. v Wesz 278 F Supp 2d at 1192 Flp v Bucurencu 129 Cal App 4th at 830 quterrez v Gvens 1 F Supp 2d [SO Cal 1998] see also Cardnale v Mller 2010 WL * Cal App Unpub LEXS 3600 * 8-11 [Cal App May No. Ah25546]). The court notes that contrary to defendants's contenton Calforna does not \ " requr~ clear and convncng proof of fraud but rather a preponderance of the evdence (Gagan v GouJ(d 73 Cal App 4th [Cal App 1999] dsapproved on other grounds Meja v Reed 31 Cal 4th 657 n2 [2003] Whtehouse v Sx Corp. 40 Cal App 4th [Cal App 1995] n re Stern 345 F3d 1036: 1043 [9 th Cr 2003] cert dened 541 US 936 [2004]). : To the extent that plantff s assertng an actual fraudulent transfer "[w]hether a conveyanc( was made wth fraudulent ntent s a queston of fact and proof often conssts of nferences from the crcumstances surroundng the transfer" (Flp v Bucurencu 129 Cal App 4th at 834 see Bulmash v Davs 24 Cal 3d '[1979]). There are several of the badges of fraud present here ncludng that before the transfer was made n May 2006 Eurosurgcal had. been sued by plantff defendants were aware of the Calforna actons the transfer was of substa~tally all of Eurosurgcal' s assets Eurosurgcal was nsolvent or became nsolvent shortly after the PSA (see Bardon aff -r 5 and exhbts A and B annexed thereto) and the PSA occurred shortly' after a substantal debt was owed by the Calforna state court judgment a'nd after the Calforna federal court judgment (Cal Cv Code [a] [4] [5] [9] and [10]). n addt~n whether Eurosurgcal receved a reasonably equvalent value s a genune materal 25 '.

28 [* 27] dsputed fact. Defendants submt proof that t was ndependently valued by Mr. Preud'hom~e n. the French Commercal Court of Arras proceedng (exhbt 28 to Carey affrm at OTO OT OT01648) who opned that a valuaton range from to 1.5 mllon euros based on the then-present value of Eurosurgcal' s future proft was far (d. at OTO 1648). They also submt an expertreport from Mark S. Brown of Prce Waterhouse Coopers (exhbt 31 to Carey affrm) who opned that the far market value of the assets that Eurosurgcal transferred as of May was b tween 1.26 mllon ~uros and 1.55 mllon euros (d. at 4). Mr. Brown challenges the. valuaton method used by plantffs expert assertng that plantffs expert used only the market appro8ch and faled to consder the ncome or asset-based approaches (d.). n opposton plantff submts the report of ts expert Robert Wunderlch who opnes that the value of compahes such as Eurosurgcal usually are based on a multple of sales (Wunderlch aff and exhb~s A and B annexed thereto see also exhbt F to Ross aff deposton of John Foster dated Decenber at 49). n 2005 the year before Eurosurgcal's entry nto the PSA ts sales were 6~ euros whch means that the prce Surgvew pad for Eurosurgcal was only.26 of ts 2005 sales (exhbts A and B to Wunderlch aft). He asserts that n May 2006 the market value Of Eurosurgcal was 37.2 mllon euros (d. at 2 see also Schedules A-A4 of exhbt A to ~ Wund~r1ch aft) and n hs rebuttal report dsputes the asset-based approach used by defendants for fal~ng to consder Eurosurgcal's good wll and/or ntangble assets as an ongong busness and th~ ncome approach as based on napproprate assumptons whch lead to an understatement ofvalje (exhbt B to Wunderlch aft). Plantfff~rther submts Berkowtz's deposton testmqny n whch he states that two weeks after acqurng Eurosurgcal's.assets defendants j fled a :regstraton statement wth the French Securtes and Exchange Commsson wth regard 26

29 [* 28] to Sc~nt'x n order to offer those assets for sale to the publc and the valuaton multpler used <~ was 6~6 not.26 (see exhbt E to Ross aff Berkowtz dep at and exhbt 55 to Ross aft). Taken together ths proof supports the concluson that whether Eurosurgcal receved a reasorably equvalent value s a trable ssue of materal fact. 1 Further wth regard to the ssue of actual ntent defendants assert that based on J Euros~rgcal's actons n engagng Mr. Meynet as ts ndependent pre-nsolvency agrent and Mr. Preudhomme as an ndependent valuaton expert voluntarly subjectng tself to French court scrut~y obtanng a legal opnon on French law and n advertsng the PSA n the French BOD4CC and the local newspaper there s no bass for fndng an actual ntent to defraud. Plantff however sharply dsputes the legtmacy of the French court proceedng and asserts ' that the proceedng was not bndng on t snce t was not a party was not notfed of the procee:dng and was not a party to the PSA whch the French court supposedly approved. Arlette \ Bardot: plantffs French legal expert affrms that under French law court approval of such volunt~ agreements renders them enforceable between the sgnatores but does not comprpmse the rghts of non-sgnatores such as plantff here to challenge the agreement and the tra?sfer of assets (Bardon aff ~ 4). Further plantff urges that at the least ths transacton constt)jted a constructve fraudulent transfer because t was made wthout reasonably equvalent value ~y a debtor who was nsolvent or was rendered nsolvent by the transacton (see Cal Cv ~ Code ). Ths court fnds that the crcumstances surroundng ths transacton gve rse to a queston of fact as to whether reasonably equvalent value was exchanged and whether defendants acted wth the relevant fraudulent ntent (see Monastra v Konca Bus. Mach. US.A. nc. 4~ Cal App 4th at ). 27