Desvarieux v. Axiom Holdings, Inc.
- John Cronan
- 1:17-cv-04756
- U.S. District Court · Southern District of New York
- 3
In Desvarieux v. Axiom, Judge Cronan entered judgment awarding shareholders $1.42 million plus interest against Axiom after its default.
The shareholder plaintiffs and Axiom Holdings, Inc.; the judgment requires Axiom to pay $1,420,000 plus specified pre- and post-judgment interest.
What happened
Desvarieux v. Axiom Holdings, Inc. was a shareholder class action alleging that Axiom made important false statements and omissions in filings about a proposed merger with CJC Holdings, Ltd. The merger failed, and the plaintiffs alleged that Axiom’s share price fell as a result.
Axiom did not appear or defend the case. The court previously entered default judgment against Axiom on liability and later referred the damages issue to Judge Gorenstein. Judge Gorenstein recommended awarding $1,420,000 plus interest, and no party objected to that recommendation.
Judge John P. Cronan reviewed the recommendation, adopted it in full, and entered judgment for the plaintiffs for $1,420,000, plus pre- and post-judgment interest from June 19, 2017, until the judgment is satisfied. The court directed the Clerk of Court to close the case.
The detailed version
- Desvarieux v. Axiom Holdings, Inc. · No. 1:17-cv-04756
- John Cronan
- May 26, 2022
Background
The plaintiffs, who were shareholders of Axiom Holdings, Inc., brought a class action under Section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5. They alleged that Axiom made material misrepresentations and omissions in its filings concerning a proposed merger with CJC Holdings, Ltd., whose subsidiaries operate hydroelectric power stations in China. After the merger failed, Axiom’s share value declined, which the plaintiffs alleged caused them losses.
The complaint also named Curtis Riley and asserted claims against him under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5. The court later dismissed the claims against Riley with prejudice. The opinion states that Axiom failed to appear or otherwise defend the action.
Prior Liability Ruling and Damages Recommendation
On March 11, 2021, the court granted the plaintiffs’ motion for default judgment against Axiom on liability but reserved the damages decision. The case was later referred to Judge Gabriel W. Gorenstein for an inquest, meaning a proceeding to determine the amount of damages. The plaintiffs submitted proposed findings and a declaration attaching a report from their damages expert, Steffen Hennig.
On May 10, 2022, Judge Gorenstein issued a Report and Recommendation advising that judgment be entered for the plaintiffs in the amount of $1,420,000, plus pre- and post-judgment interest from June 19, 2017, until the judgment was satisfied.
Review and Ruling
The parties did not file objections to the Report and Recommendation within the required time. Judge Cronan stated that the parties therefore waived their right to object or obtain appellate review. Even so, the court conducted a de novo review, meaning an independent review, and found the recommendation well reasoned and supported.
Judge Cronan adopted the Report and Recommendation in its entirety and entered judgment for the plaintiffs for $1,420,000, plus pre- and post-judgment interest from June 19, 2017, through satisfaction of the judgment. The interest was to be calculated at the rate specified in 28 U.S.C. § 1961(a). The Clerk of Court was directed to close the case.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.