LG Capital Funding, LLC v. Exeled Holdings Inc.
- Lewis Liman
- 1:17-cv-04006
- U.S. District Court · Southern District of New York
- 2
In LG Capital Funding v. Exeled Holdings, Judge Wang ordered more information before assessing damages after Exeled’s default.
LG Capital Funding, LLC must provide additional information about damages; Exeled Holdings Inc. is the defendant whose default-related damages were being assessed.
What happened
In LG Capital Funding, LLC v. Exeled Holdings Inc., the court reviewed LG Capital’s submissions during a proceeding to determine damages after Exeled’s default.
The court found material factual and legal errors that made it impossible to assess damages. It also noted that LG Capital’s counsel had made similar errors in earlier related proceedings, including issues involving the breach date, stock-price sources, and possible double recovery of principal, interest, and share value.
The court ordered LG Capital to file a supplemental legal memorandum by July 14, 2020 addressing those issues. Judge Ona T. Wang warned that failing to supplement on time could lead to a recommendation that damages be denied.
The detailed version
- LG Capital Funding, LLC v. Exeled Holdings Inc. · No. 1:17-cv-04006
- Lewis Liman
- June 30, 2020
Background
The matter was referred to the court for an inquest after default. An inquest is a proceeding used to determine the amount of damages after a defendant has defaulted. LG Capital submitted materials addressing damages.
Court’s concerns
The court identified material factual and legal errors in LG Capital’s submissions and concluded that those errors prevented it from assessing damages. The court was particularly concerned because LG Capital, through the same counsel, had made similar errors in prior related proceedings.
The court directed LG Capital to address three subjects:
- The date on which Exeled breached its obligations. If LG Capital changed the proposed breach date, it had to provide Exeled stock’s highest and lowest trading prices for that revised date.
- The sources for the highest and lowest trading prices used for Exeled stock.
- Whether LG Capital could recover principal and interest, in light of the court’s concern that awarding those amounts along with the value of shares could result in double recovery.
Disposition
The court ordered LG Capital to file a supplemental memorandum of law by July 14, 2020. It stated that a failure to supplement on time could result in a recommendation that damages be denied. The order did not determine the amount of damages and did not state that damages were denied. The order was issued by United States Magistrate Judge Ona T. Wang.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.