REID COLLINS DEFEATS APPEAL IN $1 BILLION CASE AGAINST EVANS-FREKE, MAYO, AND AUVEN THERAPUETICS IN NEW YORK’S FIRST DEPARTMENT
On May 21, 2020, Reid Collins defeated an appeal by a group of defendants seeking to reverse the New York Supreme Court’s denial of their motions to dismiss. Defendant Stephen Evans-Freke withdrew his appeal prior to the ruling, but his current fund Auven Therapeutics, John Mayo, and a number of Mayo’s and Evans-Freke’s Celtic entities continued to press their appeals. The First Department rejected each of their arguments, finding that plaintiffs sufficiently pleaded that all defendants were subject to personal jurisdiction in New York based on, among other things, New York’s “closely-related doctrine” and that Auven was subject to liability as a successor to the Celtic investment manager. In the suit, plaintiffs are asserting direct and alter-ego-based claims against Evans-Freke, Mayo, Auven, and the Celtic entities for breach of their obligations to pay principal and interest due on notes purchased by plaintiffs and issued by one of defendants’ shell companies. Plaintiffs also assert that Evans-Freke, Mayo, and Auven used the Celtic corporate structure to bleed out the assets of the issuing entity and the related guarantors in an attempt to ensure plaintiffs could not recover the payment due on the notes, and instead that Auven could conduct the same business free and clear of the obligations owed to plaintiffs. Plaintiffs seek to recover the nearly $1 billion currently owed on the notes. The First Department’s opinion can be found here.
Prior results do not guarantee a similar outcome.