District Judge Jesse Furman
U.K. firm Surgicraft’s agreement with Paradigm BioDevices required Surgicraft to pay Paradigm if it was acquired by a company that terminated the agreement. Delaware’s Centinel Spine Inc. terminated the agreement after acquiring Surgicraft. A British court held Paradigm entitled to more than $15 million from Surgicraft. Alleging that Centinel rendered Surgicraft insolvent to avoid making payment, Paradigm sought to amend its complaintasserting fraudulent transferto pierce the corporate veil and add Viscogliosi Brothers LLC (VB) as a defendant, and add a contract breach claim. Applying Delaware law, district court granted only Paradigm’s request to pierce the corporate veil and add VB as a defendant. In addition to alleging Centinel’s gross undercapitalization, insolvency and financial distress, Paradigm alleged VB’s exercise of control over Centinel, which failed to observe corporate formalities, as well as VB’s and Centinel’s intermingling of funds and that Centinel siphoned funds to VB. Despite having information needed for its proposed contract breach claim since December 2011, Paradigm failed to show why it could not have included such a claim in its Second and Third Amended Complaints.
