Boustead Securities, LLC v. Leaping Group Co., Ltd

Background

Under a scheduling order for a damages inquest, Boustead Securities, LLC submitted proposed findings of fact and conclusions of law and an affidavit from its counsel concerning the damages and other relief it sought in connection with the default judgment. The court was required to determine whether Boustead provided enough admissible evidence to establish damages with reasonable certainty.

Court’s Analysis

The court held that Boustead’s written submissions were insufficient to establish damages on their own. The evidence supporting the damages claim was an expert disclosure prepared by counsel for Patrick O’Shea and submitted in an arbitration involving Boustead and former defendant ATIF Holdings Limited. O’Shea did not submit his own affidavit. The court concluded that the disclosure was inadmissible hearsay and that counsel’s affidavit stating the disclosure had not been edited did not replace O’Shea’s sworn confirmation of its assertions.

The court also found that the disclosure did not explain the methods and reasoning behind O’Shea’s damages calculations in enough detail. This was significant because Boustead relied on O’Shea’s analysis in seeking relief based on the default judgment.

Order

The court ordered a hearing on the default judgment for April 23, 2025, at 11:00 a.m. in Courtroom 21D at 500 Pearl Street, New York. It also directed Boustead to have Patrick O’Shea appear and provide sworn testimony about his damages conclusions and analytical methods, particularly the basis for the specific inputs used in the Black-Scholes model. The order did not itself determine the amount of damages.