Commercial Division Blog: Current Developments in the Commercial Divisions of the New York State Courts

On July 11, 2024, Justice Andrea Masley sustained a fraudulent conveyance action brought against the alleged “alter egos” of litigation funding recipients who breached a funding agreement. In GNHC 1703-518, LLC, v. Venari Partners, LLC, et al., Index No. 651347/2022, the defendants comprised a complex group of corporate entities and partnerships formed primarily by John Mininno and his company, Venari Partners, LLC. The entities were created to facilitate an investment scheme to profit from the investigation and litigation of qui tam claims brought against pharmaceutical companies under the False Claims Act. The plaintiff had previously obtained an arbitration award against some of the entities based on breach of a litigation funding agreement. However, because those entities had no substantial assets—beyond an interest in pending litigation—they could not satisfy the arbitral award. The plaintiff sued the remaining entities in the scheme to satisfy its award and claw back amounts that were allegedly fraudulently conveyed to them. The Court rejected a motion to dismiss and held that the plaintiff could maintain its action against the alter egos. It explained: Read More