What the case involved: Plaintiffs, shareholders in a BVI holding company, brought an action over a purported $58.5 million investment in the BVI company’s main asset – an Ohio steel company. Plaintiffs initially obtained a temporary restraining order from an Ohio court, enjoining the sale of the steel company.
Process and Result: Marks & Sokolov attorneys successfully obtained dismissal of plaintiffs’ claim for inspection of books and accounting of the BVI company defendant under the internal affairs doctrine. The court found BVI law governs the defendant’s internal affairs and it lacked jurisdiction to interfere in those affairs. The court determined plaintiff’s claims for conspiracy fraud and theft and $58.5 million unjust enrichment claim were derivative and could not be brought without BVI court approval, as required by BVI law. The court dismissed for forum non conveniens because the BVI is an adequate forum, no sources of proof or witnesses were located in Ohio and difficult questions of BVI law were at issue. In addition, the court dismissed because the foreign corporation plaintiff lacked standing since it was not licensed to do business in Ohio. Preliminary injunctive relief was accordingly dissolved.