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Court of Appeals Finds That Plaintiff Purchased Corporate Assets for Express Purpose of Suing Defendant

Justinian Capital SPC v. WestLB AG, 155

The New York Court of Appeals has declined to reinstate claims against an asset manager sued for making poor mortgage-based investments. The Court found that the plaintiff’s breach of contract and fraud claims violated the New York state Champerty Doctrine, which forbids buying assets for the express purpose of bringing suits, trading, or commercializing in litigation. The Court determined that the plaintiff had acquired investments in a “sham transaction” simply to bring suit against the defendants.

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