Zappia v. Gan Limited
- John Cronan
- 1:24-cv-00032
- U.S. District Court · Southern District of New York
- 3
In Zappia v. Gan Limited, Judge Cronan granted expedited discovery and scheduled a preliminary-injunction hearing, requiring defendants to produce specified documents.
Joseph Zappia and the proposed group he seeks to represent, as well as GAN Limited and the other defendants, particularly because the defendants must produce the ordered documents and participate in the scheduled preliminary-injunction proceedings.
What happened
In Zappia v. Gan Limited, Joseph Zappia asked the court to order expedited discovery and to hold a hearing on his request for a preliminary injunction. The court scheduled that hearing for February 6, 2024, and set deadlines for the parties’ written submissions.
The court granted expedited discovery because no motion to dismiss was pending, so the statutory discovery pause did not apply. The court also found that Zappia had shown unfair prejudice without limited discovery and that his requests were specific enough. Defendants had to produce documents concerning the merger process, possible competing bids, director conflicts, committee formation, adviser disclosures, confidentiality and standstill agreements, and related financial analyses.
Judge John P. Cronan ordered defendants to produce the specified materials by January 29, 2024, at 5:00 p.m. The order did not decide whether to issue the preliminary injunction; it scheduled the hearing and granted the discovery request.
The detailed version
- Zappia v. Gan Limited · No. 1:24-cv-00032
- John Cronan
- Jan. 23, 2024
Background
Joseph Zappia, individually and on behalf of a proposed group of similarly situated people, moved for a preliminary injunction and expedited discovery. The court scheduled a hearing on the preliminary-injunction motion for February 6, 2024, at 2:00 p.m. Defendants had to file their opposition by January 30, and Zappia could file a reply by February 2.
Discovery Ruling
The court granted Zappia’s motion for expedited discovery. The Private Securities Litigation Reform Act generally pauses discovery while a motion to dismiss is pending. The court found that no motion to dismiss was pending and that defendants had not indicated that they intended to file one.
The court further held that, even if the statutory pause applied, Zappia had shown sufficient unfair prejudice to justify limited discovery. The court explained that courts may partially lift a discovery pause when a plaintiff would be placed at an unfair disadvantage in making informed litigation and settlement decisions without documents central to the proceeding. The court also found that Zappia’s discovery requests were sufficiently specific.
Required Production
By January 29, 2024, at 5:00 p.m., defendants had to produce:
- Board and special-committee minutes from September 30, 2022, through November 7, 2023, concerning the merger, transaction proposals, director conflicts, and the formation and membership of the financing and merger special committees; - Responses to director questionnaires from that period; - B. Riley’s signed engagement letters and conflict or other relationship disclosures provided to the Board or a special committee; - Indications of interest and other bids or proposals submitted by Bidder B and Bidder H; - Analyses evaluating the per-share value of those proposals; - Agreements containing confidentiality, nondisclosure, or standstill provisions with the identified bidders; - GAN’s waivers of standstill provisions; and - B. Riley presentations to the merger special committee or Board concerning the Premiums Paid Analysis.
Zappia had to serve the order on defendants through their counsel by email no later than January 24, 2024, at noon. The order granted expedited discovery and set the preliminary-injunction hearing; it did not rule on the preliminary-injunction request itself.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.