District Judge Ronnie Abrams


Read Full- Text Decision

In 2000 Cantor Fitzgerald LP (Cantor LP) and affiliate Cantor Fitzgerald Securities (CFS)—the sole member of CIHLP LLC (CIHLLC)—created CIH to enter the gambling business. CIH operated through Cantor Index Ltd. (CIL) and other subsidiaries. A 2002 limited partnership agreement designated CIHLLC general partner. In 2013 the annual revenues of CIL and CIH plummeted after CIHLLC allegedly caused CIL to sell its “contracts for differences” and “spread betting services” to Cantor Fitzgerald Europe (CFE) for $1. Alleging contract breach and tortious interference with contract, trustee Kirschner sought recovery of funds invested in defendants’ gambling venture. The court dismissed Kirschner’s first amended complaint (FAC) alleging CIHLLC breached the LPA by selling all or substantially all of CIH’s business and assets absent unanimous approval of CIH members in the CFE Transaction. Finding insufficient justification under Delaware law to pierce the corporate veil, the court ruled that Kirschner’s contract breach claim failed because the FAC did not plausibly allege CIHLLC took any action in selling CIH’s business or assets. Rather, Kirschner alleged the decision to sell CIL’s subject businesses was made by CIL’s own board of directors.