[00:00:00] Speaker 02:
Thank you, Your Honor.

[00:00:01] Speaker 02:
May it please the Court, Patrick Philbin, for appellant Aldini AG.

[00:00:05] Speaker 02:
I'd like to reserve three minutes of my time to rebuttal.

[00:00:08] Speaker 02:
Your Honors, I realize this case may seem very complicated with a lot of parties and involving French judgments, but it boils down to a fairly simple story and a handful of clear legal errors that the District Court made in dismissing the case.

[00:00:21] Speaker 02:
The complaint here alleges

[00:00:23] Speaker 02:
a transnational plot to strip Dolphin Integration of its assets that involved MBDA and Soitech reaching out from France to Savaco in California, convincing it to stay out of the bidding so that the bankruptcy court in France wouldn't know that there were other bidders.

[00:00:37] Speaker 02:
That ensured there was no public auction, allowed MBDA and Soitech to buy all the assets for Dolphin Integration in a pre-packed sale,

[00:00:44] Speaker 02:
for just a bargain basement price, and then as the quid pro quo, sell some of those assets back to Silvaco in California.

[00:00:52] Speaker 02:
That enabled them to get all the assets for 200,000 euro, even though when they announced about a month later what they had acquired, market valuation of Soitech popped in a way that suggested a valuation for those assets of 250 million euro.

[00:01:06] Speaker 02:
So Aldini came to the district court in California seeking relief because Aldini was squeezed out with nothing.

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And I'd like to focus on four areas the district court made in dismissing.

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First, on issue preclusion.

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Second, on the intentional interference claim, the dismissal for failure to state a claim.

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Third, personal jurisdiction on MBDA and Soitech.

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And lastly, very briefly, I'd like to touch on sovereign immunity.

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So on issue preclusion, Your Honor, the fundamental point here is that there are two distinct wrongful acts

[00:01:36] Speaker 02:
that underpin the intentional interference claim that were never litigated actually and addressed on the merits in France.

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There was no ruling in France on them.

[00:01:44] Speaker 02:
The first is what I will call the Sobaco scheme.

[00:01:48] Speaker 02:
That is reaching out to Sobaco in California, getting it not to bid so that there could be this prepack sale

[00:01:54] Speaker 02:
than selling back assets to Savaco and Palomar.

[00:01:56] Speaker 05:
Can you just step back a minute and give me a category of what you're arguing now?

[00:01:59] Speaker 05:
Are you arguing jurisdiction?

[00:02:01] Speaker 05:
Are you arguing cause of action?

[00:02:02] Speaker 02:
Issue of preclusion, Your Honor.

[00:02:05] Speaker 02:
Issue of preclusion.

[00:02:05] Speaker 02:
There are two wrongful acts underpinning.

[00:02:09] Speaker 03:
Even if we agree with you that there's no issue of preclusion, you still have to state a claim, though.

[00:02:13] Speaker 03:
And I don't understand why this intentional interference claim states a claim, given how speculative it is that you would have won this option.

[00:02:20] Speaker 02:
Well, Your Honor, I think

[00:02:23] Speaker 02:
There are many cases, as cited in our brief, that hold that where there is an auction in a commercial setting, that is, and there is someone who can show that they had a reasonable prospect of success, not that they would succeed, but that they would have a prospect of success, that they were in the running to bid.

[00:02:39] Speaker 02:
If there is something fraudulent that derails that auction scenario, that is sufficient to state an intentional interference claim under California law.

[00:02:48] Speaker 03:
Often there's some existing relationship, though.

[00:02:50] Speaker 03:
Can you point to a case where there's no, where

[00:02:53] Speaker 03:
it just speculation that you would have been is enough.

[00:02:57] Speaker 02:
Well yes your honor and it's not speculation that we would have been.

[00:03:00] Speaker 03:
Okay well you could say you would have been but speculation that you would have been the only bidder.

[00:03:03] Speaker 03:
How do we have any idea that you would have won this auction?

[00:03:06] Speaker 02:
The Sierra National Insurance case your honor from the Central District of California which involved a company in receivership.

[00:03:12] Speaker 03:
Any appellate binding authority?

[00:03:15] Speaker 02:
It is not an appellate binding authority but it is

[00:03:18] Speaker 02:
an application of the common law of California on what constitutes a claim for intentional interference.

[00:03:24] Speaker 02:
And the court there held that when there was a bidding process for the company and receivership and the winning bidder, interestingly it was a coalition of French companies there, the winning bidder there had misrepresented something to the conservator and that allowed them to win the bid.

[00:03:40] Speaker 02:
And the losing bidder came and complained.

[00:03:43] Speaker 05:
That's the difference.

[00:03:44] Speaker 05:
There was an auction.

[00:03:45] Speaker 05:
There was a bidder.

[00:03:47] Speaker 05:
There was a losing bidder who actually made a bid and therefore it was possible to tell what would have happened if the first bid hadn't been accepted because there was a second bid and we know what it would have been and he did have a relationship with the situation.

[00:04:03] Speaker 05:
Here there was no auction, there was no bid.

[00:04:05] Speaker 02:
And the Brosnan versus Florida case cited in our brief yarner also involves a situation where

[00:04:11] Speaker 02:
There was no bid because the interference actually prevented the plaintiff there from bidding on the auction.

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And in that case, the court said, if you come in, there's going to be a process.

[00:04:21] Speaker 02:
We know there's going to be a process under French law.

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We know that under French law that the bankruptcy trustee is supposed to maximize value and get the best and that there would have to be a public auction if there are multiple people interested in it.

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And we know that that process was whole derailed.

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If there is some derailer of a process that is supposed to take place under law, Brosnan versus Florida says that in itself can be the cause of action for intentional arrears.

[00:04:50] Speaker 04:
What case is this?

[00:04:51] Speaker 04:
Is this a district court case?

[00:04:52] Speaker 02:
It is a district court case.

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What's the name of it?

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Brosnan versus Florida.

[00:04:58] Speaker 06:
Are there any California appellate cases on this point or anything like that?

[00:05:02] Speaker 02:
Well, Your Honor, the cases that

[00:05:05] Speaker 02:
involved auctions in California would be the Sierra National Insurance case that we cited.

[00:05:10] Speaker 02:
That's a federal case, too.

[00:05:11] Speaker 02:
But it's applying state law.

[00:05:13] Speaker 02:
No, I get it.

[00:05:13] Speaker 06:
I'm just curious whether there's like a California Court of Appeal case or anything like that on this particular point.

[00:05:18] Speaker 02:
Only ones that I believe are in absent.

[00:05:20] Speaker 02:
The ones that are cited all involve the other side sites.

[00:05:23] Speaker 02:
The district court cited they involve horse race, licensing for a poker club, or what the court itself called a unique scenario for a public works contract

[00:05:33] Speaker 02:
where the contracting entity could decide to deny all bids.

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So in terms of auction, it's this Brosnan case and the Sierra National case?

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And the A-Tech mechanical case, Your Honor, and the San Jose construction case.

[00:05:48] Speaker 02:
And those are just the cases in California.

[00:05:50] Speaker 02:
Remember, this is a common law claim.

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And there is a thread throughout the common law across the country that allows claims like this.

[00:05:57] Speaker 02:
And there are multiple cases cited in our brief.

[00:06:00] Speaker 02:
from the Eighth Circuit, from the Supreme Court of New Jersey, from Kentucky.

[00:06:05] Speaker 02:
And they all recognize, and this is what the way the Eighth Circuit described it is, this is in the American Business Integrity versus Hayworth case.

[00:06:17] Speaker 02:
That court said that the prospect of winning a bid may constitute a reasonable expectancy of commercial relations supporting a tortious interference claim

[00:06:26] Speaker 02:
where circumstances suggest the plaintiff could successfully compete.

[00:06:30] Speaker 02:
And the circumstances here suggest that Aldini could successfully complete.

[00:06:34] Speaker 02:
It's a multi-billion dollar Swiss bank.

[00:06:36] Speaker 02:
What they do is they identify targets, they establish a position in them, and then they look for the opportunity to acquire the company because they do research and figure out what company is undervalued.

[00:06:47] Speaker 02:
They thought that Dolphin Integration was grossly undervalued here.

[00:06:50] Speaker 02:
They established a strategic position in it, and their goal was, they had been researching it for years, to then look for an opportunity to take over.

[00:06:59] Speaker 05:
Did they allege what their bid would have been?

[00:07:02] Speaker 02:
I don't know exactly what their bid would have been.

[00:07:04] Speaker 05:
Did they allege what the amount would have been?

[00:07:06] Speaker 02:
They have not alleged what they would have bid, but they have alleged that they assessed the value of Dolphin integration to be, I believe, 649 million euro.

[00:07:17] Speaker 02:
So they knew that their research suggested that it was a vastly undervalued company and that those assets, because remember, what this is all about is IP assets.

[00:07:25] Speaker 02:
It's about silicon on insulator technology.

[00:07:31] Speaker 02:
And that's why when Soitech and MBDA got this for 200,000 euro, all of a sudden Soitech's value popped by 150 million euro.

[00:07:42] Speaker 02:
And that's just a valuation for Dolphin of 250 million euro.

[00:07:45] Speaker 02:
They were able to turn around and sell just a fraction of the assets that they got for 200,000 euro for over 1.1 million euro to Sovaka.

[00:07:54] Speaker 02:
So, Your Honor, the cases in the brief established throughout the common law that where there is a competitive bidding scenario in a commercial context and you have a party that can show that it would have been in the running in that competition,

[00:08:08] Speaker 02:
but there was some wrongful interference in the bidding process, which is exactly what's alleged here.

[00:08:14] Speaker 02:
That states a claim for intentional interference.

[00:08:16] Speaker 03:
You're going to run out of time, and there are a lot of other issues.

[00:08:18] Speaker 03:
Can I ask you about forum non-convenes, which I think was not on your list?

[00:08:23] Speaker 03:
But I'd like to know about the management torts and forum non-convenes.

[00:08:26] Speaker 03:
So did you ever raise the management torts in France?

[00:08:33] Speaker 02:
Not in the way that they're framed here, no.

[00:08:36] Speaker 03:
Why not?

[00:08:37] Speaker 02:
I don't know the answer to that.

[00:08:41] Speaker 02:
I mean, that would have been a strategic call for the French Council long before I was involved in the case.

[00:08:45] Speaker 02:
I think, Your Honor, here that the management torts, it became clearer after some time the way that that claim could be formulated here in the Northern District.

[00:08:55] Speaker 03:
And why is this a better forum for management torts that are under French tort law than France?

[00:09:01] Speaker 03:
Against French defendants.

[00:09:03] Speaker 03:
Against French defendants.

[00:09:04] Speaker 02:
Because, Your Honor,

[00:09:06] Speaker 02:
But as we explained in the supplemental brief, for a forum non-convenience to apply, there has to be an adequate alternative forum.

[00:09:13] Speaker 02:
Here, France wouldn't be an adequate alternative forum at this point because of the statute of limitations.

[00:09:17] Speaker 06:
Well, you just said that you made a – that there was a strategic decision not to assert the – that's the word you used – not to assert the claims in France.

[00:09:23] Speaker 02:
So how do you get out?

[00:09:28] Speaker 02:
I don't know what the decision was.

[00:09:45] Speaker 02:
At the time that the third party opposition was filed in 2018, Aldini had very limited available information about exactly what had gone on.

[00:09:57] Speaker 02:
It was in 2020 that they discovered the sale to Sovaka.

[00:10:03] Speaker 03:
Is that because of discovery that happened in this litigation?

[00:10:05] Speaker 03:
What changed?

[00:10:06] Speaker 02:
Because the sale to Silvaco wasn't arranged until sometime in the summer of 2020.

[00:10:12] Speaker 02:
There was first, they had to seek special permission from the bankruptcy court to be able to sell any of the assets because they were under a two-year embargo.

[00:10:20] Speaker 06:
But was the litigation in France all done as of 2020 when you learned about the sale to Silvaco?

[00:10:25] Speaker 06:
No, it was still ongoing.

[00:10:27] Speaker 05:
Well, exactly, so what?

[00:10:28] Speaker 06:
This gets back to Judge Friedland's question.

[00:10:29] Speaker 06:
Why did you go back there and file the management tort claim there?

[00:10:33] Speaker 02:
Well, Your Honor, because at that point it was all on appeals, and there had been a set number of claims that were presented in third-party opposition.

[00:10:40] Speaker 02:
And there, the focus at that point – remember, the tort claim is distinct from the third-party opposition.

[00:10:46] Speaker 02:
The focus of the litigation in France was not tort damages.

[00:10:49] Speaker 02:
It was to try to undo the sale.

[00:10:51] Speaker 02:
So it's one specific cause of action to try to undo the sale.

[00:10:56] Speaker 02:
That was the focus of litigation in France.

[00:10:58] Speaker 02:
It was only after that had ended for some years and there had been the loss all the way up through the French Supreme Court that Aldini turned and then also learned about Sovako.

[00:11:09] Speaker 02:
They didn't know about that till November 2020.

[00:11:11] Speaker 05:
Even in France, he kept finding cases after that.

[00:11:14] Speaker 02:
Not new cases, Your Honor.

[00:11:16] Speaker 02:
There were discovery cases that were ongoing during that time, but there was not a new case.

[00:11:22] Speaker 05:
Everything in France — Is she getting signed for repetitious litigation and so on?

[00:11:27] Speaker 02:
But no, Your Honor.

[00:11:28] Speaker 02:
Everything in France stemmed from the third-party opposition.

[00:11:31] Speaker 02:
It started with the attempt to unwind — But it didn't have to.

[00:11:33] Speaker 03:
I mean, you could have brought this claim in France.

[00:11:36] Speaker 02:
Had they known sufficient about it, but I don't know exactly what was known to al-Dinni at the time.

[00:11:44] Speaker 02:
But Your Honor, the point is, at this point, the claim was brought with the intentional interference claim in the Northern District.

[00:11:53] Speaker 02:
Now, as long as the intentional interference claim survives, which I believe it should, then form non-convenience for the French management tort claims would make no sense because it would be splitting up.

[00:12:04] Speaker 03:
Okay.

[00:12:05] Speaker 03:
Well, what if we disagree with you that the intentional interference survives?

[00:12:08] Speaker 03:
Then what should happen with these management torts?

[00:12:10] Speaker 02:
Well, the management tort claims, again, Your Honor, because the statute of limitations has run in France, that is not an adequate form.

[00:12:18] Speaker 05:
I mean, first of all, I don't understand the basic principle that forum nonconvenience doesn't apply if the limitations has run because, again, it's the plaintiff who let it run.

[00:12:28] Speaker 05:
So it seems very strange to say, well, you had a forum and you could have used it, but you didn't.

[00:12:34] Speaker 05:
So therefore, you now get a prize for that.

[00:12:40] Speaker 05:
But in this instance, even more so, since the case wasn't even over in France entirely, it doesn't seem to make a whole lot of sense.

[00:12:52] Speaker 02:
Well, Your Honor, the cases say, in the Carrillo's case and the other case we cited in our supplemental brief, that it is an inadequate alternative forum.

[00:13:00] Speaker 05:
Well, I understand they say it, but I'd like to know why and what the limitations of that are, because... Well, go ahead.

[00:13:08] Speaker 02:
the limitation on that and this is in the case law is only if there has been a deliberate choice to try to run out the statute of limitations in one forum in order to then seek another forum and say oh sorry why didn't that happen here when you could have brought the case in

[00:13:22] Speaker 02:
Because there is no evidence to suggest that there was some strategic calculation to run out the statute of limitations.

[00:13:30] Speaker 02:
El Dini obviously was litigating what it thought was the best avenue for litigation in France, which was the third-party opposition.

[00:13:37] Speaker 02:
That was a focus on trying to undo the transaction.

[00:13:39] Speaker 03:
It wasn't going very well, though.

[00:13:41] Speaker 03:
So why not file this new thing, this management tort thing there?

[00:13:45] Speaker 02:
Because I believe, Your Honor, that the

[00:13:48] Speaker 02:
the focus shifting to a tort claim only became feasible after Silvaco's involvement became known, which shifted the complexion of the case to potentially a broader scheme.

[00:14:00] Speaker 02:
And then after the French Court of Passation rendered its opinion, that was until May of 2021.

[00:14:05] Speaker 02:
So then you're talking between May and August.

[00:14:09] Speaker 05:
Isn't there an interaction between the preclusion issues and the forum nonconvenience issues and limitations period?

[00:14:17] Speaker 05:
Because

[00:14:18] Speaker 05:
the the preclusion you say well this wasn't litigated in France but if it could have been litigated in France but for the limitations period then it would seem that you are again you're getting a prize for not having brought a claim that if you brought it would have been issue precluded here would have been issue preclusion here if you lost

[00:14:45] Speaker 05:
And that would have shown, which seems pretty obvious, that France was an adequate forum for that claim.

[00:14:57] Speaker 02:
Your Honor, that starts to sound like claim preclusion.

[00:14:59] Speaker 02:
Well, that's what I'm saying.

[00:15:01] Speaker 05:
It's an interaction between the forum nonconvenience question and a preclusion question in the sense that you could have brought the claim.

[00:15:13] Speaker 05:
Yes, it may be a claim preclusion.

[00:15:15] Speaker 05:
kind of thing.

[00:15:17] Speaker 05:
But it's not resting on that.

[00:15:19] Speaker 05:
It's resting on a forum nonconvenience notion that you could have brought this, you didn't bring it.

[00:15:26] Speaker 05:
The fact that the limitations period has now run should not undermine the fact that you had a forum, you didn't use it.

[00:15:35] Speaker 05:
Do you know the RANSA cases?

[00:15:37] Speaker 05:
I think they were cited in some of the briefs.

[00:15:39] Speaker 02:
The RANSA cases.

[00:15:41] Speaker 05:
RNZA.

[00:15:42] Speaker 05:
They were cited by the other side.

[00:15:44] Speaker 05:
essentially what happened, and I was on the panel, which is the second one, but what happened is the first panel there and then the second one following said, well, there was in France, no it was in the Netherlands, an adequate forum.

[00:16:02] Speaker 05:
True, it's over now, the litigation is over, but the fact that the litigation is over doesn't give you the right to ignore the fact that you could have done it there, but you didn't do it there.

[00:16:14] Speaker 05:
I'm kind of baffled by why a foreign inconvenience should award a non-assertive approach to your French litigation.

[00:16:29] Speaker 02:
Because, Your Honor, according to the cases, the fact that a statute of limitations has run

[00:16:36] Speaker 02:
usually means that there's not an adequate alternative form.

[00:16:39] Speaker 02:
It's in the Carrillo's case.

[00:16:41] Speaker 05:
In any of those cases had there already been a case in the other form?

[00:16:47] Speaker 02:
It was always the situation that the case could have been

[00:16:50] Speaker 05:
I know, but in any of those cases, were there already a case that was brought there?

[00:16:55] Speaker 02:
I'm not sure that there was.

[00:16:57] Speaker 02:
That's the difference here.

[00:16:58] Speaker 02:
But this, again, was a very different type of litigation in France.

[00:17:02] Speaker 02:
We're talking about not a tort action, not something like that, a very specific type of action directly to overturn the bankruptcy court decision to unwind the transaction.

[00:17:12] Speaker 02:
It's the difference between trying to undo a transaction to get the assets and a tort action.

[00:17:17] Speaker 05:
and the fact that Aldini was... Is your assertion that this claim could not have been added to that litigation?

[00:17:24] Speaker 02:
I don't know for sure, Your Honor, what the French law would be, but my impression is that what was available in the commercial court of Grenoble in France

[00:17:36] Speaker 02:
was this third-party opposition to undo the litigation, to undo the sale.

[00:17:40] Speaker 06:
You started off talking about – trying to talk about preclusion.

[00:17:43] Speaker 06:
You said there were two distinct wrong flags.

[00:17:45] Speaker 06:
I got down the first one, getting Silvako not to bid.

[00:17:48] Speaker 06:
You didn't get – what was – what's the second one?

[00:17:50] Speaker 02:
The second – yes, the second one, Your Honor, is the use of insider information.

[00:17:55] Speaker 06:
Now, the use of insider information – So you're saying that part of the – one of them may be precluded, but the other is not?

[00:18:01] Speaker 06:
Is that basically where this is going?

[00:18:02] Speaker 02:
No, Your Honor, neither of them is precluded.

[00:18:04] Speaker 02:
Neither of them.

[00:18:05] Speaker 06:
Because none of that was involved in the French litigation, is what you're saying.

[00:18:08] Speaker 02:
Well, let me be clear about that.

[00:18:11] Speaker 02:
The French litigation did not involve the claims about Sovako, because the litigation started in 2018.

[00:18:17] Speaker 02:
But Sovako wasn't there yet, basically.

[00:18:20] Speaker 02:
Right.

[00:18:20] Speaker 02:
This is far as anybody knows.

[00:18:21] Speaker 02:
And Aldini didn't know anything about Sovako until 2020.

[00:18:23] Speaker 02:
Now, in their brief on forum nonconvenience, the supplemental brief that was supposed to focus on forum nonconvenience, the MBD SOETEC parties

[00:18:32] Speaker 02:
included sort of a sur-reply and issue preclusion, where they say for the first time that the second French appeals judgment actually addressed Silvaco and somehow that creates inclusion.

[00:18:44] Speaker 02:
Now, we'd like an opportunity to reply to that if the court is going to focus on it, but the answer is it wasn't addressed on the merits and ruled upon as a factual matter.

[00:18:54] Speaker 02:
What the second appeals judgment in France was, was an attempt to reopen the first appeals judgment.

[00:19:00] Speaker 02:
And it's an attempt to go back and reopen just that judgment, which can only be done on very limited grounds under Article 595 of the French Code of Civil Procedure.

[00:19:09] Speaker 02:
And so it's like an attempt to reopen an appellate court judgment.

[00:19:13] Speaker 02:
And yes, there was a reference in that attempt to reopen the judgment to the fact that the assets were sold to Sobaco.

[00:19:19] Speaker 02:
But the court, it was an appellate court.

[00:19:21] Speaker 02:
It was not receiving facts and ruling on facts and saying, this didn't happen or this is not fraud.

[00:19:27] Speaker 02:
What it said was, that's not enough under Article 595 to reopen the judgment.

[00:19:31] Speaker 02:
So that Sovako scheme has never been addressed and ruled upon on the facts in a court in France.

[00:19:38] Speaker 02:
The second ground that has never been ruled upon on the facts is the assertion that there was a use of insider information because MBDA and Soitech each had a person on the board of Dolphin Integration and the allegations that they provided insider information to allow the prepack offer to be done.

[00:19:54] Speaker 02:
Now, that claim was raised in France in the third party opposition in the sense that Aldini argued that there had been a violation of the rules governing stock market listed companies in France.

[00:20:08] Speaker 02:
because of a use of insider information.

[00:20:10] Speaker 02:
The court in France didn't rule on that on the merits.

[00:20:13] Speaker 02:
This is page 899 of the excerpts of record.

[00:20:16] Speaker 02:
At 899 of the excerpts of record, what the French court said was the bankruptcy court had no obligation to look at those rules and enforce those rules.

[00:20:26] Speaker 02:
So there is no ruling that the use of insider information did not happen.

[00:20:31] Speaker 02:
There's just a ruling that in the context of that particular action to unwind the bankruptcy sale, the bankruptcy court didn't have to look at those rules prohibiting the use of insider information.

[00:20:41] Speaker 02:
So both of those wrongful grounds of interference never were ruled upon in France.

[00:20:47] Speaker 02:
Putting that to one side, there is also this separate ground for issue preclusion that the French Supreme Court

[00:20:54] Speaker 02:
ruled on Aldini's case only on timeliness grounds.

[00:20:59] Speaker 02:
Now, I'm not going to get into all of the details of the back and forth of that, Your Honor, because there's a simple way to cut right to the chase on this.

[00:21:06] Speaker 02:
There are seven different expert opinions arguing back and forth about what that French Supreme Court decision means because it was issued without any opinion.

[00:21:16] Speaker 02:
And the one thing that can be said for certain at this point

[00:21:20] Speaker 02:
is that it's not entirely clear here exactly what the French Supreme Court holding means.

[00:21:25] Speaker 02:
And this is the principle.

[00:21:26] Speaker 06:
So when it's not clear what the judgment that's supposed to be preclusive means, how is it supposed to get decided?

[00:21:32] Speaker 02:
It gets decided that you should.

[00:21:34] Speaker 02:
The jury doesn't decide it, right?

[00:21:35] Speaker 02:
Sorry?

[00:21:35] Speaker 06:
The jury's not going to decide it.

[00:21:37] Speaker 02:
No, no, Your Honor.

[00:21:37] Speaker 02:
Issue of preclusion cannot apply as a matter of law.

[00:21:39] Speaker 02:
And this is the principle.

[00:21:40] Speaker 02:
So the idea is if it's unclear, then preclusion's out the door.

[00:21:44] Speaker 02:
Exactly.

[00:21:45] Speaker 02:
And this was the principle, Judge Cannella.

[00:21:46] Speaker 02:
You applied just earlier this year.

[00:21:48] Speaker 02:
in Vernon v. McGlone.

[00:21:50] Speaker 06:
I'm just a district judge.

[00:21:51] Speaker 06:
I don't count.

[00:21:52] Speaker 02:
Well, Your Honor, but it's the same principle of law, and it was a similar case.

[00:21:57] Speaker 02:
What was the case?

[00:21:58] Speaker 02:
Vernon v. McGlone, which a similar case in the sense that there was an appeal there, and the appellate court rendered a decision without opinion.

[00:22:09] Speaker 02:
And as you pointed out in the opinion, Judge Cannelli, that made it difficult to figure out exactly what had been ruled upon and litigated in that appeal.

[00:22:16] Speaker 02:
And because it's always a defendant who bears the burden of proving exactly what was litigated and decided, that was sufficient for issue of preclusion not to apply.

[00:22:26] Speaker 02:
And the principle, as you pointed out, is the issue of preclusion doctrine does not apply if there is any uncertainty about whether the issue was actually or necessarily decided by the court in the prior proceeding.

[00:22:39] Speaker 02:
Now, that was under Illinois law, but the principle is the same under federal principles of issue preclusion.

[00:22:44] Speaker 02:
We cite the Love v. Villacana case for that and other cases in our brief.

[00:22:49] Speaker 02:
So that separate problem that the French Supreme Court decision

[00:22:55] Speaker 02:
It doesn't matter.

[00:22:56] Speaker 02:
Everything that was decided below, different issues and that, because it went up on appeal and there was one ground that was timeliness, and it appears that the French Supreme Court ruled only on timeliness, that wipes out the preclusive effect of everything else under American preclusion law.

[00:23:12] Speaker 03:
And how do we know American preclusion law applies instead of French preclusion law?

[00:23:15] Speaker 02:
Because it is always the foreign court that applies its principles of preclusion to other judgments, Your Honor.

[00:23:22] Speaker 05:
Sometimes their principles of preclusion may be to apply the French principles of preclusion.

[00:23:29] Speaker 05:
I mean, that's what happens between federal court and state courts, for example.

[00:23:36] Speaker 02:
Yes, for courts in the United States, but for foreign judgments, it is federal preclusion law that would apply, federal preclusion principles, when the case is in this court on the ground of federal question jurisdiction.

[00:23:50] Speaker 02:
which it was in this case.

[00:23:53] Speaker 03:
So... Is it?

[00:23:55] Speaker 03:
I thought it was... Is it federal question jurisdiction or is it some sort of... Is it conversing jurisdiction or...?

[00:24:00] Speaker 02:
It was the Defend Trade Secrets Act claim, I believe, Your Honor.

[00:24:03] Speaker 02:
It was not the... Because there is not a ground of diversity where you have a foreign entity on each side in that case.

[00:24:12] Speaker 02:
Oh, right.

[00:24:15] Speaker 02:
That's why issue of preclusion can't apply on it.

[00:24:18] Speaker 02:
And the district court plainly got this wrong because the district court was focused on the claim in France under Article 642-3 of the French commercial code, which is completely irrelevant to Aldenia's intentional interference claims in this case.

[00:24:34] Speaker 02:
It doesn't form a part of any of the wrongful interference that Aldenia has claimed.

[00:24:39] Speaker 02:
That's issue preclusion.

[00:24:40] Speaker 03:
Okay, I think we've taken you way over your time.

[00:24:42] Speaker 03:
I think I need to stop you unless anyone has other questions right now.

[00:24:45] Speaker 03:
Okay.

[00:24:45] Speaker 02:
Thank you.

[00:24:45] Speaker 03:
We'll still give you three minutes for rebuttal, but let's hear from the other side.

[00:24:53] Speaker 00:
Good morning.

[00:24:53] Speaker 00:
Dennis Chameleau, Foley Hoag for the Republic of France, the Sovereign Defendants, and Mr. Kamara.

[00:25:01] Speaker 00:
I will argue on immunity.

[00:25:03] Speaker 00:
Under the third clause of the commercial activity exception, Aldini was required to plausibly plead an act outside of the United States, commercial activity outside of the United States, and direct effect

[00:25:22] Speaker 00:
in the United States.

[00:25:24] Speaker 00:
Aldini did not plead an act, did not plead commercial activity, did not plead direct effect.

[00:25:30] Speaker 00:
Aldini keeps changing the formulation of its claim, which is not appropriate in appeal, and the new formulation should fail like the original one.

[00:25:40] Speaker 00:
So first, the act.

[00:25:43] Speaker 00:
The United States Supreme Court said in Sachs 2 that the act has to be the gravamen of the lawsuit, the core of the lawsuit.

[00:25:52] Speaker 00:
The act that is alleged here, the recruitment outside of the United States of California-based accomplices, is not the gravamen of the lawsuit.

[00:26:05] Speaker 00:
That's the act that was presented to the district court.

[00:26:07] Speaker 00:
That's the act that was presented in the initial brief here at page 49.

[00:26:13] Speaker 00:
The gravamen of the lawsuit, as the district court found, is the prepack sale in 2018.

[00:26:21] Speaker 00:
In the reply brief,

[00:26:23] Speaker 00:
Aldini tries to change things, present a new formulation.

[00:26:27] Speaker 00:
Now there are multiple acts in this conclusory word of interference that is being used.

[00:26:34] Speaker 00:
But the only specific act that is described on page 20 of their reply brief is the recruitment of California-based accomplices.

[00:26:44] Speaker 00:
And Aldini says very clearly that that's one element of their claim.

[00:26:49] Speaker 00:
Under the Supreme Court decision in Sax 2, one element is not enough.

[00:26:54] Speaker 00:
Even a necessary element is not enough.

[00:26:56] Speaker 00:
They had to plead an act that is the core of the claim.

[00:27:00] Speaker 00:
That's the act.

[00:27:02] Speaker 00:
Now, on commercial activity, what was presented to the district court was the purchase and sale of Dolphin Integrations assets while excluding other bidders.

[00:27:14] Speaker 00:
That was the commercial activity.

[00:27:16] Speaker 00:
The district court rejected it.

[00:27:18] Speaker 00:
Now there's a new formulation.

[00:27:20] Speaker 00:
It's one, the alleged control over the bankruptcy trustee in France, and second, it's the control over the co-defendants, allegedly directing them to interfere with the judicial process in France.

[00:27:33] Speaker 00:
So as to the first thing, it is not appropriate for Aldini

[00:27:36] Speaker 00:
in a reply brief on appeal to address for the first time the ruling that the district court made on control over the trustee.

[00:27:44] Speaker 00:
And Aldini is wrong because the complaint says very clearly the trustee is appointed by the Republic of France.

[00:27:51] Speaker 00:
It exercised its powers as part of the Republic of France.

[00:27:56] Speaker 00:
And Aldini even in the complaint refers to the powers of the trustee as a taking.

[00:28:01] Speaker 00:
They cannot now mention commercial activity.

[00:28:04] Speaker 00:
And as to the co-defendants, the district court was very clear that there cannot be any attribution because Aldini has consistently failed to plead an agency relationship, which it was required to do.

[00:28:16] Speaker 00:
Facts showing the right to control the co-defendants, facts showing that the co-defendants had the right to act on behalf of the Republic of France, not a single fact in the complaint.

[00:28:28] Speaker 00:
And the use of the word conspiracy is not an excuse for failing to plead an agency relationship.

[00:28:37] Speaker 00:
With respect to direct effect, we pointed out in our brief that the direct effect that's alleged in the complaint at paragraph 438 is not the direct effect that is argued in the briefs.

[00:28:52] Speaker 00:
And the direct effect that's pleaded in the complaint required a number of intervening events, including decisions of the French courts,

[00:28:59] Speaker 00:
and finding customers in the United States under this court's decision in Terenkin, what they alleged as direct effect, either below or more recently here, is not sufficient.

[00:29:12] Speaker 00:
I'd like to say one word about Mr. Kamerer.

[00:29:16] Speaker 00:
The Republic of France is the real party in interest with respect to the claims against Mr. Cameron.

[00:29:23] Speaker 00:
Aldini makes very clear that whatever he did was in his official capacity, that he was supposedly acting as the point person or the point of contact for France.

[00:29:35] Speaker 00:
This is in the complaint.

[00:29:37] Speaker 00:
We pointed this out and it's not rebutted on appeal.

[00:29:42] Speaker 00:
It's a concession.

[00:29:44] Speaker 00:
The claims against Mr. Kamerer should be dismissed based on common law, foreign immunity, and some courts have even ruled that the FSIA applies when the individual is acting, is alleged to have acted in his official capacity.

[00:29:57] Speaker 00:
And the claim is really the sovereign is the real party in interest.

[00:30:02] Speaker 00:
There's not a single fact pleaded regarding Mr. Cameron, not a single fact in the complaint.

[00:30:08] Speaker 00:
This is a claim against him, an individual for allegedly taking government action in France.

[00:30:15] Speaker 00:
exercising jurisdiction over him would be unreasonable, and it would be a violation of due process, and it would also make it possible to just evade the FSIA because you could just... To be specific, what governmental action do you think is the core of this complaint?

[00:30:34] Speaker 05:
What's the governmental action?

[00:30:35] Speaker 05:
I mean, you're saying it's not commercial action, it's regulatory or governmental action.

[00:30:39] Speaker 05:
What is the regulatory or governmental action?

[00:30:42] Speaker 00:
What's alleged in the complaint is that the president of France and the former president of France and the former prime minister and a number of cabinet ministers and generals exercised the power of the state, that's the word in the complaint, and the weight of the republic, these are the words in the complaint, to impose some pressure and control a trustee to advocate in favor of two companies in the marketplace.

[00:31:11] Speaker 00:
That cannot be commercial activity.

[00:31:14] Speaker 00:
The source of the power of the President of France is the power of the Republic.

[00:31:19] Speaker 00:
And when government officials promote, support the activities of companies in the marketplace, that's what, for instance, the Second Circuit in Cato ruled is quintessentially a governmental function.

[00:31:34] Speaker 03:
You're over your time.

[00:31:35] Speaker 03:
Thank you very much.

[00:31:36] Speaker 03:
Thank you.

[00:31:52] Speaker 01:
Thank you, Your Honor, and may it please the court, Alex Loomis from Quinn Emmanuel on behalf of the MBDA Soitech defendants.

[00:31:59] Speaker 01:
Now, I was surprised when Mr. Philbin opened by saying that this is a simple case that ultimately boils down to people coming to California and recruiting Silvaco Incorporated into a vast transnational scheme.

[00:32:13] Speaker 01:
And the reason I was surprised is because if you look at the argument section for their opening brief,

[00:32:18] Speaker 01:
That is not cited as a relevant point when discussing their IEPA claims, issue preclusion, or personal jurisdiction.

[00:32:27] Speaker 01:
They mention that only briefly in the FSIA section and in the background section of their brief.

[00:32:33] Speaker 01:
But it is, at best, a minor part of the complaint.

[00:32:36] Speaker 01:
And the California aspect of it, that this all happened in California, was not even pleaded until the second amended complaint after all the MBDA Soitech defendants and Mr. Depe Roe were dismissed with prejudice.

[00:32:48] Speaker 01:
This is just one example of them being a moving target, whether it's them presenting for the very first time in the reply brief, not in their three briefs below or in their opening brief, the reasons why they think there are specific issues that are not precluded, which I will get to, or all of these issues that we've had in France where the French courts have repeatedly sanctioned them for vexatious conduct.

[00:33:11] Speaker 01:
Given all of this history, I think that this court's instinct to dismiss or potential instinct to dismiss on forum nonconvenience grounds is a good one.

[00:33:18] Speaker 01:
I want to start with Ransa v. Nike because as Judge Berzon pointed out, that is cited in our briefs and we make the very point that Judge Berzon was making.

[00:33:27] Speaker 01:
In Ransa 1, this court in a presidential opinion held that it did not matter if a case

[00:33:34] Speaker 01:
that the fact that people had already litigated before the Dutch tribunal, not even a court, just a tribunal, a governmental commission, fair and equal employment opportunity claims, was sufficient to establish that they had an adequate alternative forum.

[00:33:50] Speaker 01:
And then this court reaffirmed that holding just a couple of years ago in RANSA 2, the panel on which Judge Berzon was a panelist.

[00:33:57] Speaker 01:
Now, Mr. Philbin simply does not have an answer to that case.

[00:34:01] Speaker 01:
That alone is sufficient to dismiss the management towards claims, and I would wager in fact... Well, but there's the statute of limitations problem.

[00:34:07] Speaker 03:
So he says the forum is no longer adequate because of the statute of limitations.

[00:34:13] Speaker 03:
If you were not going to assert the statute of limitations, we could dismiss this whole thing.

[00:34:17] Speaker 03:
Are you going to assert the statute of limitations in France, though?

[00:34:20] Speaker 01:
So I'm not prepared to waive that at this time, Your Honor, but just two points.

[00:34:24] Speaker 01:
So in RANSA v. Nike, the court said very clearly, and even more explicitly in RANSA too, that you don't need to prove that there is a future prospective forum, just that there was at one point a prospective forum if you did litigate there.

[00:34:37] Speaker 01:
So the statute of limitations issue was neither here nor there.

[00:34:40] Speaker 03:
So I can't remember whether that's the case, though, that has this language about intentionally

[00:34:45] Speaker 03:
running out the statute of limitations.

[00:34:47] Speaker 01:
No, Your Honor, that's a different case and this is a different doctrine.

[00:34:49] Speaker 01:
So the fact that they've already litigated fully in France is an independent reason, independent of the statute of limitations.

[00:34:55] Speaker 01:
By the time they sued, by the time RANSA 2 came around in 2023, it was some 13 years after the litigation in the Netherlands.

[00:35:03] Speaker 05:
At that point what they were trying to do was have a 60-B motion and there was a question of whether they had a duly delayed, as I understand it.

[00:35:11] Speaker 01:
That's true.

[00:35:12] Speaker 05:
But that's connected to a limitations period and whether it was too late for them to do this and the response was, well, you knew all the way back then that you had an adequate forum and you should have been in the adequate forum.

[00:35:28] Speaker 01:
That's precisely right, Your Honor.

[00:35:30] Speaker 01:
And so I think that's sufficient grounds for that.

[00:35:32] Speaker 01:
But on the limitations period too, I would point out the point that we make, I think, on page six of our supplemental brief,

[00:35:41] Speaker 01:
There is actually quite a bit of evidence that they intentionally ran down the statute of limitations.

[00:35:45] Speaker 01:
They waited to serve the US complaint literally the day before the statute of limitations expired.

[00:35:51] Speaker 01:
And I was surprised to hear Mr. Philbin say that they didn't know any of the relevant facts to bring their claims until 2020, given that they admitted below, and this was in the supplemental, supplemental excerpts of record that I submitted, they said below that actually they had sufficient notice as of August 27, 2018 to start bringing these claims.

[00:36:10] Speaker 01:
This whole thing about we didn't know about the facts until the Silvaco allegations came out is entirely irrelevant, because the Silvaco allegations have nothing to do with the management towards claims.

[00:36:20] Speaker 06:
Where in the supplemental record is that?

[00:36:22] Speaker 01:
It's the supplemental, supplemental excerpts of record that I submitted with the supplemental brief.

[00:36:27] Speaker 01:
And there's only about one page there, so you'll find it quickly.

[00:36:30] Speaker 01:
But just to pause there, that this has nothing to do with the Silvaco allegations.

[00:36:35] Speaker 01:
That's also another reason to dismiss the management towards claim, because they've collapsed in the reply brief.

[00:36:40] Speaker 01:
on this conspiracy with Silvaco Incorporated, notwithstanding that when they were litigating in France simultaneously with their US complaint, they were saying the sale actually went to Silvaco France, illustrating that this is just naked forum shopping and above all else.

[00:36:54] Speaker 01:
They've never explained how they were telling the Court of Appeals in France that it was Silvaco France and telling the US court here that was Silvaco Incorporated.

[00:37:03] Speaker 01:
They were making those contradictory assertions in two different forms at once.

[00:37:06] Speaker 01:
But set that aside.

[00:37:08] Speaker 01:
They've never explained how the Silvaco France allegations connected all to their management torts claims.

[00:37:13] Speaker 01:
Their management torts claims involve a conspiracy to drive a company to the ground.

[00:37:16] Speaker 01:
Those allegations are fanciful.

[00:37:18] Speaker 01:
They're completely conclusory and implausible.

[00:37:20] Speaker 01:
Everything's on information and belief.

[00:37:22] Speaker 01:
There's no specifics as to what financing opportunities were turned up and so on and forth.

[00:37:27] Speaker 01:
But even setting all that aside, they allege that Silvaco didn't enter this conspiracy until the middle of the bankruptcy proceedings, at which point all of those torts would have been completed.

[00:37:37] Speaker 01:
We make that point in our brief.

[00:37:38] Speaker 01:
They don't respond to it at all.

[00:37:40] Speaker 01:
It also was part of the court's ruling that they didn't have specific jurisdiction over that claim.

[00:37:45] Speaker 03:
So just so I can try to track this, you're saying under Ronza that we don't even need some sort of intentional decision to run out the clock.

[00:37:54] Speaker 03:
But you're also saying we have enough evidence in this record that we could ourselves find that?

[00:37:59] Speaker 03:
Or do we need the district court to find that?

[00:38:02] Speaker 03:
say that there was this intentional decision to run out the clock.

[00:38:04] Speaker 03:
Can we just do that ourselves?

[00:38:06] Speaker 01:
I think you could do it yourselves because RANSA found forum non-convenience when the district court didn't.

[00:38:11] Speaker 01:
They didn't make the finding that there was the running out the clock in RANSA, but there's no reason why.

[00:38:14] Speaker 03:
But I thought you were saying, I'm going to have to read the details of RANSA again, but it seems like you're saying RANSA doesn't even require an intentional running out of the clock as long as there was some French proceeding.

[00:38:23] Speaker 01:
That's true, yes.

[00:38:24] Speaker 01:
Those are two independent reasons.

[00:38:26] Speaker 03:
In Randza, was the French proceeding, because I think one of the weirdnesses here is that they didn't bring, I mean this is how we have the problem, they didn't bring the management torts in France.

[00:38:34] Speaker 03:
In Randza, had they brought some equivalent claim in the other forum?

[00:38:38] Speaker 01:
It was somewhat equivalent but not quite.

[00:38:40] Speaker 01:
It was a claim, they were requesting a finding from a Dutch commission that there had been discrimination and then they could have taken that commission finding to a court and potentially sought damages.

[00:38:50] Speaker 03:
But the claim there that they were trying to do in the U.S.

[00:38:53] Speaker 03:
was discrimination, the same kind of thing.

[00:38:55] Speaker 01:
Yeah, it was.

[00:38:56] Speaker 01:
That's right.

[00:38:57] Speaker 01:
And sorry, George Berson.

[00:38:58] Speaker 01:
Yeah, it was.

[00:38:59] Speaker 01:
That's right.

[00:38:59] Speaker 01:
They actually would have sought damages in the U.S.

[00:39:01] Speaker 01:
And they said that the that they wrote that the remedies were different for that reason.

[00:39:04] Speaker 01:
And they said that was that that mattered.

[00:39:07] Speaker 03:
But also, I would point here, we have the weirdness, I guess, a slight difference.

[00:39:09] Speaker 03:
Maybe it doesn't matter as a difference.

[00:39:11] Speaker 03:
But here we have them asserting management torts that they never assert in any form in France.

[00:39:15] Speaker 01:
Oh, that's true.

[00:39:16] Speaker 01:
But to be clear, they told the US court below in the 1782 proceeding, which they filed before the complaint, that they were actually intending to file their French management torts in France.

[00:39:27] Speaker 01:
We've noted this in our appellee brief, to be clear.

[00:39:30] Speaker 01:
There's no explanation for why they decided to drop it.

[00:39:33] Speaker 01:
I mean, the obvious explanation is because they kept getting sanctioned and because the rulings in France actually are preclusive on these issues.

[00:39:40] Speaker 01:
And I can turn to that now, but briefly on the speculative nature of the IEPA claim as well.

[00:39:48] Speaker 01:
First, I agree with fully all of the questions that this court was posing.

[00:39:51] Speaker 01:
But I also want to push back on an unstated assumption of Mr. Philbin's argument, that there was going to be a public auction if another bidder showed up.

[00:40:00] Speaker 01:
To be clear, there was another bidder who showed up to the prepack offer.

[00:40:03] Speaker 01:
It wasn't Aldini.

[00:40:05] Speaker 01:
The prepack hearing was a public hearing that they could have attended.

[00:40:08] Speaker 01:
And other people did attend, including people with contracts with Aldini.

[00:40:13] Speaker 01:
This is all in the bankruptcy judgment, which lists all of these parties being in attendance.

[00:40:17] Speaker 05:
What do you mean, people with contracts with Aldini?

[00:40:19] Speaker 01:
Yes, but also a shareholder, Mr. Gervier, did show up and said that he wanted to delay the proceedings so he could assemble another bid.

[00:40:26] Speaker 01:
And the court didn't say that, oh, well, if there's another bid, then I have to go to public bankruptcy proceedings, because that's not true.

[00:40:34] Speaker 01:
After this argument, if you look at pages 729 to 730 of the fourth volume of the excerpts of record, there is an uncontradicted declaration below by a French bankruptcy law expert, Frank Jean Tam, that explains that the reasons why a French bankruptcy court would go to a public auction would be if they determined that the price was unreasonable, not the existence of other bidders.

[00:40:56] Speaker 01:
And here, what the bankruptcy court said, yes, the price was lower than I wanted it to be,

[00:41:00] Speaker 01:
However, under the circumstances, I feel compelled to sell this right away rather than proceed to a public auction.

[00:41:07] Speaker 01:
The reasons were this was a company that was facing imminent failure.

[00:41:11] Speaker 01:
There were contracts that were going to be unfulfilled.

[00:41:14] Speaker 01:
There were 150 employees who had been immediately unemployed.

[00:41:19] Speaker 01:
This was a major company that required immediate saving to keep operations going.

[00:41:24] Speaker 01:
That's why the French Bankruptcy Court elected not to have a public bidding process.

[00:41:29] Speaker 01:
The other reason, which is also in the Jean Tan Declaration, I think pages 732 to 34, is that even if they had submitted a bid, there's no guarantee that they would have been allowed to purchase intellectual property, which according to their complaint is vital to national security products, including missiles technologies that MBDA wanted to employ.

[00:41:49] Speaker 01:
Because like in the US, France has a procedure to allow foreign companies from taking over important national security technology.

[00:41:57] Speaker 01:
And I'm pointing this out to be clear.

[00:41:59] Speaker 01:
This is every this is all actually in the district court's ruling on page one er five eight the district court ruled that their allegations that they would have been able to purchase this I.P.

[00:42:10] Speaker 01:
was speculative for purposes of the management towards claim but also for purposes of the IEPA claim I would argue.

[00:42:15] Speaker 01:
Because there is no evidence that there would have been an auction.

[00:42:18] Speaker 01:
And two, there's no evidence that they would have been allowed to win the auction.

[00:42:22] Speaker 01:
And notably, the first Treeco demo.

[00:42:24] Speaker 03:
Sorry, sorry.

[00:42:25] Speaker 03:
Just there's so many issues here.

[00:42:26] Speaker 01:
Of course.

[00:42:27] Speaker 03:
You're arguing this now as a way that we could affirm on other grounds on the merits of the management torts.

[00:42:33] Speaker 03:
Is this what you're trying to get us to do right now?

[00:42:34] Speaker 01:
Sorry, no.

[00:42:35] Speaker 01:
It's the management torts, but it's also the IEPA claim not being a possible.

[00:42:38] Speaker 03:
Let's assume the IEPA claim is no good.

[00:42:40] Speaker 01:
That's great from my perspective.

[00:42:42] Speaker 03:
Are you trying to say something about the management torts?

[00:42:44] Speaker 01:
Well, I'm happy to say more about the management torts.

[00:42:48] Speaker 03:
We're talking about the management torts for a moment there, and saying that something about the district court's findings.

[00:42:53] Speaker 03:
And I'm trying to figure out, are you asking for an alternative ground of how to deal with the other?

[00:42:58] Speaker 03:
Because personally, I'm having the most trouble with the management torts.

[00:43:00] Speaker 03:
That's why we're asking about forum non-convenes.

[00:43:02] Speaker 03:
But maybe you're suggesting something else, or no?

[00:43:04] Speaker 01:
I have an alternative grounds for the management torts claims, which is spelled out in the appellee brief, which they don't respond to.

[00:43:09] Speaker 01:
The alternative ground is this.

[00:43:11] Speaker 01:
There were only two different theories of damages that they claimed that they said that would give rise to their management towards claim.

[00:43:18] Speaker 01:
The two theories of damages that the court said they could theoretically be allowed to pursue are reputational harm suffered by Aldini and the harm of them incurring expenses in their acquisition efforts.

[00:43:32] Speaker 01:
There are no allegations of reputational harm in the complaint that are

[00:43:36] Speaker 01:
anywhere, let alone plausible or conclusory.

[00:43:39] Speaker 01:
I just don't even know what they are.

[00:43:40] Speaker 01:
There are no allegations of what they spent money doing and how they lost money in their investment efforts either.

[00:43:46] Speaker 01:
Again, not even a... I see.

[00:43:47] Speaker 03:
This is the thing you were just... This is the speculation about the auction.

[00:43:51] Speaker 03:
We have no idea if they would have won it, because they think they lost the money of the different value.

[00:43:55] Speaker 01:
That's actually not even an alternative round.

[00:43:59] Speaker 01:
That actually was the district court's ruling, and they didn't appeal that.

[00:44:02] Speaker 03:
Wait, no.

[00:44:05] Speaker 03:
That wasn't what the district court did with the management torts.

[00:44:07] Speaker 01:
It is partly, yes, your honor.

[00:44:09] Speaker 01:
So there were four original theories of harm.

[00:44:11] Speaker 01:
And one of the theories of harm for their management torts claim that they asserted is that the management torts prevented them from bidding on the IP.

[00:44:20] Speaker 01:
And this is on page 1ER58 of the excerpts of record, the first motion to dismiss order.

[00:44:25] Speaker 01:
The court said, there's no guarantee there would have been an auction.

[00:44:29] Speaker 01:
And there's no guarantee you would have been allowed to win the auction.

[00:44:32] Speaker 01:
And the first Trico declaration, which they submitted, didn't actually say that he was sure.

[00:44:37] Speaker 01:
He said he wasn't sure if they would have been allowed to win the auction, assuming that it actually happened.

[00:44:41] Speaker 01:
And that was part of the district court's ruling for the management torts claim.

[00:44:45] Speaker 01:
And they didn't challenge that in their opening brief, or in their reply brief, or in their supplemental brief, for that matter, or in their opening argument just now.

[00:44:54] Speaker 03:
I thought the district court thought that the management torts were precluded.

[00:44:58] Speaker 01:
Well, he did, just to be clear.

[00:45:00] Speaker 01:
So to be clear.

[00:45:01] Speaker 01:
Yes, he did.

[00:45:02] Speaker 01:
There were other species of harm that he said they could sue on for the management torts claim.

[00:45:07] Speaker 01:
But my argument that we make in the supplemental and the, excuse me, the appellee brief is those other theories of harm, reputational harm, and lost investment effort are also implausible and conclusory.

[00:45:19] Speaker 01:
And that's an alternative basis to affirm the decision below.

[00:45:22] Speaker 03:
On the merits.

[00:45:22] Speaker 01:
Yes, on the merits.

[00:45:23] Speaker 03:
Of failure to state a claim.

[00:45:24] Speaker 01:
Yes.

[00:45:24] Speaker 01:
I can get to issue a preclusion because I think it's, if you'll excuse me, I know that I'm over my time.

[00:45:29] Speaker 01:
But I want to be very clear here on a few things.

[00:45:31] Speaker 01:
This is, we did not get an explanation as to what arguments they thought they were raising here that were not litigated in France until the reply brief.

[00:45:41] Speaker 01:
The argument that we made, and this is on page 23 of the appellee brief, not made for the first time in our supplemental brief, as Mr. Philbin suggested, is that the second appeals judgment, which was filed after November 2020 when the Silvaco's deal was publicly announced, the entire point of the second appeals judgment

[00:45:59] Speaker 01:
was whether or not the Savaco transaction afterwards is evidence that there was collusion from the beginning and an effort to suppress bids.

[00:46:09] Speaker 01:
Now, Mr. Philbin said that wasn't a ruling on the merits.

[00:46:12] Speaker 01:
They were just saying you can't submit new evidence, that this is a final decision.

[00:46:16] Speaker 01:
I would direct this court's attention to 4ER780, where the second highlight on the page

[00:46:24] Speaker 01:
says the fact that a few months before the prohibition on transferring the assets in question came to an end, a request was filed so that a transfer could be made to the company Sylvako France is not sufficient to establish a collusion that would have been established two years earlier with a view to finally allocating these assets to this company and to allow a capital gain for the benefit of the transferor.

[00:46:46] Speaker 01:
It is not established that there was a collusion.

[00:46:48] Speaker 01:
That is a merits holding.

[00:46:50] Speaker 01:
It is not a holding that we refuse to consider new evidence.

[00:46:53] Speaker 01:
It says plain as day there was no collusion.

[00:46:56] Speaker 01:
Now the other thing that he says is this claim that there were no insider allegations, insider information allegations.

[00:47:04] Speaker 01:
I would direct this court to pages eight to nine of my supplemental brief.

[00:47:09] Speaker 01:
The allegation that there was insider information dealing was made before the first appeals judgment and was rejected by the first appeals judgment

[00:47:19] Speaker 01:
in the passages that I cited on page eight of the supplemental brief.

[00:47:25] Speaker 01:
The final point that they raise, and this argument is, it's hard to grasp where to even begin with this point.

[00:47:33] Speaker 01:
They claim that the court of castration affirmed the first appeals judgment on only timeliness grounds and did not address any of the merits grounds decisions.

[00:47:43] Speaker 01:
The second appeals judgment rejects that reading.

[00:47:45] Speaker 01:
The second appeals judgment says, on pages 779 and 780, that the court of castration dismissed all grants of castration and that that rendered final the assessment made by the court of castration on the absence of any fraud.

[00:48:00] Speaker 01:
Now, Mr. Philbin has appealed to Terez-Dudicata principles.

[00:48:03] Speaker 01:
This principle that's most relevant here is the last in time principle, a later in time judgment

[00:48:09] Speaker 01:
is preclusive as to the meaning of an earlier-in-time judgment.

[00:48:13] Speaker 03:
OK.

[00:48:14] Speaker 03:
I really thought the earlier one looked like it was about timeliness.

[00:48:17] Speaker 03:
And so final could just mean we're done or something.

[00:48:19] Speaker 03:
I mean, it's France.

[00:48:20] Speaker 03:
So I don't understand how if something is about timeliness and then someone else says, now this is final, that means we say the timeliness thing was merits.

[00:48:27] Speaker 01:
No.

[00:48:27] Speaker 01:
So Your Honor, it doesn't say the judgment was final.

[00:48:30] Speaker 01:
It says the assessment made by the Court of Cassation on the absence of any fraud.

[00:48:35] Speaker 01:
It doesn't say that it was a final decision, period.

[00:48:38] Speaker 01:
But also, and Your Honor, I would respectfully push back against the interpretation of the Court of Cassation decision.

[00:48:44] Speaker 01:
If you look at pages 799 to 800, the listing of the report of Miss Bailaval is a list of all materials considered by the court.

[00:48:53] Speaker 01:
It is not the holding.

[00:48:55] Speaker 01:
The holding is on page 800, which has two paragraphs that says all the grounds of Cassation are unlikely to lead to Cassation and then dismisses the appeal.

[00:49:05] Speaker 01:
Now, Mr. Philbin said, we have seven dueling expert declarations on the subject.

[00:49:10] Speaker 01:
Well, five of them are from his client.

[00:49:12] Speaker 01:
And the five declarations don't actually cite a single legal authority that endorses their view that whenever the court simply lists the report of effectively a bench memo, that means they are endorsing and adopting the bench memo.

[00:49:26] Speaker 01:
And you would think that if that was really what they meant, they would have said that in France when they got the second appeals judgment.

[00:49:34] Speaker 05:
No, I mean, you're being incredibly helpful, but I'm going back to where you started when you started down the race to the college.

[00:49:45] Speaker 05:
Before that, on page 58, as you noted, there are a couple of paragraphs that address the management towards and that seem to be talking about the merits of them.

[00:49:56] Speaker 01:
Sorry, what page, Your Honor?

[00:49:57] Speaker 05:
58.

[00:49:58] Speaker 01:
Of ER 58.

[00:49:59] Speaker 01:
That's where you directed us to look.

[00:50:00] Speaker 05:
Yes, that's right, yes.

[00:50:04] Speaker 05:
a discussion that seems to be on the merits of the management torts.

[00:50:09] Speaker 05:
So how does that interact with the race-judicata discussion in terms of what the district court held or what we should hold?

[00:50:16] Speaker 05:
You said earlier, as I understood it, that we don't even have to get to the preclusion questions because the management torts fail as a matter of not stating the cause of action for the reasons the district court said.

[00:50:29] Speaker 05:
Is that what you said?

[00:50:30] Speaker 01:
It is what I said.

[00:50:31] Speaker 01:
Yes, Your Honor.

[00:50:32] Speaker 05:
So this whole other argument

[00:50:34] Speaker 05:
is in the alternative.

[00:50:36] Speaker 05:
Is that correct?

[00:50:37] Speaker 05:
Is that what you're saying?

[00:50:38] Speaker 05:
They're both in the alternative.

[00:50:41] Speaker 05:
And if we agreed with the two very short paragraphs on page 58, we wouldn't get to the preclusion question.

[00:50:52] Speaker 01:
Do I have that straight?

[00:50:54] Speaker 01:
That's correct.

[00:50:55] Speaker 01:
You would need to find as well, to be clear, to add up that argument, that you would need to accept that the two theories of harm

[00:51:02] Speaker 01:
that Aldini was allowed to plead according to page 158.

[00:51:05] Speaker 01:
I think it's 58.

[00:51:06] Speaker 01:
Maybe it's 59, but I think it's 58.

[00:51:09] Speaker 01:
You would have to accept that those allegations are implausible and conclusory, as we argue they are in the supplemental brief.

[00:51:14] Speaker 01:
Or you could accept that they don't actually allege any specifics of any violation of duties of loyalty or any failure to secure financing as was legally required of them.

[00:51:24] Speaker 01:
And to be clear, you can read the complaint again.

[00:51:27] Speaker 01:
There's no mention of any refusal to take financing.

[00:51:30] Speaker 01:
This is also something that was litigated in the French court proceedings.

[00:51:33] Speaker 01:
So I pointed out the pages in the supplemental brief for this court's consideration.

[00:51:37] Speaker 03:
OK, so you're saying if we study more page 58, we're going to figure out there's a way to dismiss the management torts for failure to state a claim.

[00:51:45] Speaker 01:
If you study page 58 and part 1B2, I think, of the appellee brief where I addressed the management torts claim specifically.

[00:51:56] Speaker 03:
Another thing you think we could do.

[00:51:57] Speaker 03:
Is 4M9 convenes where we say they ran out the clock?

[00:52:00] Speaker 03:
Yes.

[00:52:01] Speaker 03:
And or, because there was another French proceeding they didn't even need to have run out the clock, it's just done?

[00:52:06] Speaker 01:
Yes.

[00:52:07] Speaker 03:
And then you also have this very complicated issue preclusion.

[00:52:10] Speaker 01:
Well, respectfully, I think that if you just look at that one page that I pointed to in the second appeals judgment, it's not that complicated.

[00:52:15] Speaker 01:
But if you disagree with me, then yes, that's the third.

[00:52:17] Speaker 01:
And the fourth option is to say, which I mentioned at the beginning, that the California allegations have nothing to do with the French management towards claims whatsoever.

[00:52:29] Speaker 01:
of these all involve that people flew to California and had this shady deal with Savaco, those allegations, while implausible, they don't involve board members violating their fiduciary duties.

[00:52:40] Speaker 01:
They involve a conspiracy that was- So wait, sorry.

[00:52:42] Speaker 03:
This one now is somehow there's no hook to the personal jurisdiction, or I'm not sure what you're saying.

[00:52:46] Speaker 01:
Yes, that's right.

[00:52:47] Speaker 01:
I apologize, Your Honor.

[00:52:48] Speaker 01:
This final fourth way to get rid of management torts is there's no personal jurisdiction over them, because there's no relevant jurisdictional contacts for management torts.

[00:52:59] Speaker 03:
But if there's any other claim, is it just supplemental jurisdiction to that?

[00:53:04] Speaker 01:
No, you have to have jurisdiction over every single claim for personal jurisdiction purposes.

[00:53:13] Speaker 03:
Does this get into the whether conspiracy jurisdiction is personal jurisdiction?

[00:53:17] Speaker 01:
No, Your Honor, it doesn't.

[00:53:19] Speaker 01:
No, no, I apologize if my argument hasn't been clear.

[00:53:22] Speaker 01:
Conspiracy jurisdiction turns on whether you can impute the contacts

[00:53:27] Speaker 01:
of one conspirator to another.

[00:53:30] Speaker 01:
But there's the separate issue about whether or not you have jurisdiction over every single claim that's alleged in the complaint.

[00:53:38] Speaker 01:
So, for example, if I were to allege jurisdiction over a breach of contract claim over a contract that specifies a choice of law clause, that doesn't mean that I can just bring a RICO claim that has nothing to do with that contract whatsoever and say that it's supplemental or part of the conspiracy.

[00:53:54] Speaker 01:
you need to show that there is a connection between the forum contacts and every individual claim before you even get to the question of imputing jurisdictional contacts between defendants.

[00:54:07] Speaker 03:
As a matter of it being sort of properly supplemental?

[00:54:12] Speaker 03:
I mean, we originally had a federal claim.

[00:54:16] Speaker 03:
We're a federal question, and we've got all these other claims that are supplemental jurisdiction to that.

[00:54:19] Speaker 03:
Are you saying there's not enough of a connection to bring this into the same case

[00:54:23] Speaker 01:
Oh, no, sorry, Your Honor.

[00:54:24] Speaker 01:
So the supplemental jurisdiction is subject matter jurisdiction.

[00:54:27] Speaker 01:
Subject matter jurisdiction was based on the supplemental jurisdiction statute for the state law claims.

[00:54:33] Speaker 01:
I'm talking about personal jurisdiction.

[00:54:35] Speaker 01:
And for personal jurisdiction, you need to have jurisdiction over every single claim that's brought in a complaint.

[00:54:42] Speaker 03:
Well, you need jurisdiction over the defendants.

[00:54:44] Speaker 03:
But you're saying the defendants for that claim.

[00:54:46] Speaker 03:
Is that what you're saying?

[00:54:46] Speaker 01:
Yes, that's right.

[00:54:47] Speaker 01:
Yes, the defendants for that claim.

[00:54:50] Speaker 01:
When it's specific jurisdiction, you need to be able to show a connection between the defendant, the claim, and the forum.

[00:54:58] Speaker 01:
And so you can't say, because there's connections for a different claim in this case, there is also connections for, just because there's connections for the IEPA claim, theoretically, doesn't mean there's connections for the management torts claim.

[00:55:09] Speaker 05:
Back to the back one.

[00:55:11] Speaker 05:
I'm sorry to be helping in this.

[00:55:13] Speaker 05:
Perhaps you need to.

[00:55:16] Speaker 05:
finishing your argument soon.

[00:55:17] Speaker 05:
But I'm still, so I'm back on page 58.

[00:55:21] Speaker 05:
And the conclusion is that the court denies MBDA and Swarovic Defendants Motion to dismiss the 10th Clause of Action because there was an expert who testified that the items are not company damages.

[00:55:37] Speaker 05:
And he says there's no response.

[00:55:39] Speaker 05:
So he denies.

[00:55:41] Speaker 05:
So how does that help us in finding a way to dismiss

[00:55:43] Speaker 01:
So to be clear, Your Honor, to be clear, so what I was pointing to on 158 originally, the reason I first brought up that page was in addressing the IEPA claim and explaining that his ruling about the bidding, yeah.

[00:55:56] Speaker 05:
But you said it's also true of the management.

[00:55:59] Speaker 05:
But only as to that one point, whether he had an opportunity to require Dolphin integration in its assets, but not as to anything else.

[00:56:08] Speaker 01:
Yes, and for the second point,

[00:56:10] Speaker 01:
That's the alternative ground for affirmance that I was mentioning to Judge Friedland, which is addressed in my appellee brief, where I say that he is correct, that maybe those are two theories they could plead in theory, but they didn't plead either of those theories of damages in their complaint.

[00:56:27] Speaker 01:
And they also didn't plead any actual management torts.

[00:56:34] Speaker 03:
I think we should end unless there are other questions.

[00:56:38] Speaker 03:
Do you have more?

[00:56:40] Speaker 01:
The only thing I'd add just your honor is this case is over determined We are happy to file any supplemental briefing that would be helpful in this court I believe truly that all of the issues are fully resolved by the record and the fuck pleadings before this court We rest in our briefs.

[00:56:54] Speaker 01:
Thank you very much

[00:57:07] Speaker 02:
Your honor, I'd like to touch on just a few points.

[00:57:11] Speaker 02:
First, on the management torts, as I think Judge Berzon was getting to at the end there, on page 58 of the excerpts of record, what the district court actually did was not dismiss the management torts on a failure to state a claim theory.

[00:57:24] Speaker 02:
It said that they survived.

[00:57:26] Speaker 03:
But he could have been wrong, or she.

[00:57:27] Speaker 03:
I don't remember.

[00:57:28] Speaker 03:
Anyway, the district court could be wrong.

[00:57:29] Speaker 03:
So why does it state a claim?

[00:57:32] Speaker 02:
For the reasons that are given by the district court, your honor, Aldini explained that it invested time and effort.

[00:57:40] Speaker 02:
It built up a strategic stake in the company for a reason.

[00:57:43] Speaker 02:
It got a 2% stake, which is about 10% of the free float of this company, because it was a very thinly traded company.

[00:57:50] Speaker 02:
And it was doing that, investing time and resources in order to figure out the value.

[00:57:54] Speaker 02:
Remember I mentioned they valued it at 649 million euro.

[00:57:58] Speaker 02:
And then it got squeezed out with zero.

[00:58:00] Speaker 02:
And that I'm sorry.

[00:58:02] Speaker 03:
So you're saying that your losses.

[00:58:04] Speaker 03:
So the stake is because you bought some share of this company, you're saying some stock in this company.

[00:58:09] Speaker 03:
But then I thought your theory was your injury was from losing the not getting to auction.

[00:58:15] Speaker 03:
Are you now saying your injury is the loss of the 2% of stock?

[00:58:19] Speaker 02:
Well, Your Honor, it's several forms of injury.

[00:58:21] Speaker 02:
And that's what the court points out here on page 58.

[00:58:24] Speaker 02:
There's the form of injury that there was stock.

[00:58:27] Speaker 02:
And that also goes to the AIIPA claim, as we point out in our brief.

[00:58:31] Speaker 02:
That's an economic relationship with a view for a prospective advantage in the future, that ownership of stock.

[00:58:38] Speaker 02:
Because if there had been fair bidding for fair value, then even if Aldini got bid out, if the company was bought, Aldini would get something for its stock instead of getting squeezed out for zero.

[00:58:49] Speaker 02:
So that's a whole separate ground for the AIIPA claim apart from winning the bidding.

[00:58:53] Speaker 03:
But I don't really understand squeezed out for zero, because didn't they buy it for some value, just think it was too low?

[00:59:00] Speaker 02:
Aldini got zero.

[00:59:01] Speaker 02:
It got nothing for its shares.

[00:59:03] Speaker 02:
The assets were sold.

[00:59:04] Speaker 02:
The company wasn't bought.

[00:59:05] Speaker 02:
So this was an asset sale to MBD and Soitech.

[00:59:08] Speaker 02:
So Aldini is a Swiss bank that specializes in finding targets for acquisition.

[00:59:15] Speaker 02:
It built up a strategic stake in this company after doing a lot of research and due diligence to figure out that this was an undervalued company, a target for it.

[00:59:24] Speaker 02:
It got its strategic stake.

[00:59:26] Speaker 02:
And then, because, as is alleged, there was some effort to prevent the bankruptcy court from realizing that there were other interested bidders and to suppress bids from Silbaco, they got an asset sale for just 200,000 euro, which was about one one hundredth of the value of the assets.

[00:59:46] Speaker 02:
So the injury is losing the potential to acquire.

[00:59:49] Speaker 02:
The injury is getting squeezed out for zero.

[00:59:51] Speaker 02:
The injury is having to spend all the time and resources to build up that strategic investment and do the research on that and get zero further return on that.

[01:00:01] Speaker 02:
And that's what the district court properly pointed out at page 58 was sufficient to sustain the claim for the management tort.

[01:00:07] Speaker 05:
I understand the response.

[01:00:10] Speaker 05:
of your opponents that the reputational issue and the share damages and, well, the reputational issue and the investment of time and effort issue was not alleged in the complaint as injuries.

[01:00:27] Speaker 05:
That's what he says.

[01:00:28] Speaker 05:
I haven't checked.

[01:00:30] Speaker 02:
Well, Your Honor, it is in the Trico Declaration that was put in.

[01:00:34] Speaker 04:
That's a declaration.

[01:00:35] Speaker 04:
That's not the complaint.

[01:00:37] Speaker 02:
And I can't point to a specific paragraph off the top of my head, but I do know that the complaint alleges that Aldini did research on the company and had evaluated.

[01:00:46] Speaker 03:
I remember that, but I thought it was as to buying them in the auction.

[01:00:49] Speaker 03:
I don't remember this thing about the shares and losing to zero.

[01:00:54] Speaker 03:
Can you point to anything in the complaint that talks about that?

[01:00:56] Speaker 02:
Yes, Your Honor.

[01:00:57] Speaker 02:
Paragraph 39 of the complaint and paragraph 395 of the complaint both refer to Aldini having its equity stake destroyed and that being the injury.

[01:01:09] Speaker 02:
And those are cited in our brief, in our reply brief, where we point out for the AIIPA claim

[01:01:15] Speaker 02:
that there is this second theory of the type of relationship and prospective advantage.

[01:01:21] Speaker 02:
There are two theories.

[01:01:23] Speaker 02:
One is, we have a relationship because we're a shareholder.

[01:01:25] Speaker 02:
We expect to benefit in the future from being a shareholder.

[01:01:28] Speaker 03:
You said 39, and what was the other one?

[01:01:30] Speaker 02:
I believe 395.

[01:01:31] Speaker 02:
If you would excuse me to pick up a... Yes, Your Honor, it's paragraph

[01:01:43] Speaker 02:
39 at ER 230 and paragraph 395 at ER 340.

[01:01:50] Speaker 02:
And it refers to Aldine having its equity state completely wiped out.

[01:01:58] Speaker 02:
So that is why paragraph page 58 of the excerpts of record, the district court decision there, that doesn't support any ground for getting rid of the management torts.

[01:02:10] Speaker 02:
Second, in terms of forum nonconvenience on the management torts.

[01:02:14] Speaker 02:
Your Honor, this idea that Aldini was warning out the clock was raised for the first time in the supplemental brief that the... Well, we asked them to, so it's not their fault.

[01:02:24] Speaker 02:
Well, no, but since they were simultaneous briefs, we have an opportunity to respond to that.

[01:02:28] Speaker 02:
In fact, we have a footnote in our supplemental brief that says... It acknowledges that in some cases, the fact that the statute of limitations says run is not going to be a problem, but that's only where

[01:02:41] Speaker 02:
it's alleged that there has been a strategic choice to run out the clock.

[01:02:44] Speaker 02:
And that's not alleged.

[01:02:44] Speaker 03:
But it sounds like they're saying, so are you saying you have a better response to Ronza?

[01:02:51] Speaker 02:
Well, Ronza, I think, is a separate issue from the way that running out the statute of limitations is.

[01:02:58] Speaker 02:
So running out of the statute of limitations, if the court's going to consider that, we would like an opportunity to have a couple of pages supplemental brief

[01:03:05] Speaker 02:
to respond to that because that was only raised.

[01:03:07] Speaker 03:
What would you say if we gave you that opportunity?

[01:03:10] Speaker 02:
Well, Your Honor, I believe that the situation, but I would like to check this with my client because it involves litigation from years before I was involved in this case, that there was a focus on litigation in France on unwinding the transaction.

[01:03:23] Speaker 02:
That's one type of litigation in France.

[01:03:26] Speaker 02:
and that there was not a shift to tort theories until after the information about Sivako became available in November of 2020.

[01:03:34] Speaker 02:
And at that point, litigation had already been started in France and still on appeal in the French Supreme Court.

[01:03:40] Speaker 02:
And the French Supreme Court didn't decide until May of 2021.

[01:03:43] Speaker 02:
And I think that is why then there was a shift to a different strategy, different theory.

[01:03:48] Speaker 02:
But at that point, it was coming up on August for the statute of limitations to run.

[01:03:53] Speaker 02:
But I would like to verify that.

[01:03:54] Speaker 03:
But the complaint was filed here in August, so why couldn't it have been filed there in August?

[01:03:59] Speaker 02:
Because at that point, Your Honor, Silvaco was clearly central.

[01:04:04] Speaker 02:
And in order to get jurisdiction over Silvaco, they had to come to California.

[01:04:09] Speaker 02:
And why then at that point split it up into, if you're starting new litigation... Wasn't there a Silvaco France or a Silvaco U.S.?

[01:04:16] Speaker 05:
?

[01:04:17] Speaker 02:
Well, Your Honor, Aldini has alleged that it was Sovako that purchased the assets because Sovako publicly announced that it purchased the assets.

[01:04:28] Speaker 02:
I mean, there's a press release with the dateline from California saying Sovako purchased the assets.

[01:04:34] Speaker 02:
And as we point out in our reply brief, if necessary, we could, on remand, put in the SEC filing that Sovako has made where Sovako says they own the assets.

[01:04:47] Speaker 02:
My opponent has pointed out that in France, we did refer to Savaco, France, having purchased the assets.

[01:04:52] Speaker 04:
And how is that central to what happened a couple years before Savaco was involved?

[01:04:58] Speaker 02:
Well, the situation was this, Your Honor.

[01:05:01] Speaker 02:
There was this sale that Aldini believed was grossly for undervalued.

[01:05:06] Speaker 02:
Aldini knew about the bankruptcy sale.

[01:05:08] Speaker 02:
Aldini knew it was grossly for undervalued.

[01:05:10] Speaker 02:
And Aldini was trying to figure out a way in the French courts to unwind the sale.

[01:05:15] Speaker 02:
Aldini had no idea that Silvaco had

[01:05:20] Speaker 02:
as Aldini now believes, been sort of brought into a scheme to suppress its bid, to keep it on the sidelines, so that they could then later buy some of the assets.

[01:05:29] Speaker 02:
Because remember, there's an embargo on selling the assets for two years.

[01:05:37] Speaker 05:
How was Silvaco suppressing its bid if there was no auction?

[01:05:42] Speaker 02:
What's alleged in the complaint, Your Honor, is that Silvaco, who's present at the bankruptcy sale,

[01:05:47] Speaker 02:
and clearly had some interest in the assets since they later bought part of them, that was alleged in the complaint is that there was an arrangement to get Silvaco to sit on the sidelines and not bid, don't show interest because, and this is another dispute, I believe that one of Mr. Trico's declarations describes that if there had been indications of sufficient interest, the French Bankruptcy Court would have had to have some sort of public auction.

[01:06:16] Speaker 03:
Can I bring you back to Ronza?

[01:06:18] Speaker 03:
What is your response to Ronza on Forum Non-Confused?

[01:06:22] Speaker 02:
Well, Your Honor, in the Ronza case, my response at this point is that the litigation that was going on in France was not litigation, as I understand it, where that management tort claim could have been bought.

[01:06:38] Speaker 02:
That would have been a separate tort claim.

[01:06:40] Speaker 03:
It was not... So you're trying to distinguish Ronza on the idea that Ronza had a discrimination claim and then a discrimination claim instead of here.

[01:06:46] Speaker 03:
You had some proceeding but not a management tort one.

[01:06:49] Speaker 03:
That's your distinction?

[01:06:50] Speaker 02:
Yes, Your Honor.

[01:06:51] Speaker 02:
That that was a proceeding to unwind the transaction and it's a different category of proceeding.

[01:06:56] Speaker 02:
That's my understanding is that there was a focus on unwinding the transaction.

[01:07:00] Speaker 02:
There were no tort claims for damages in France.

[01:07:02] Speaker 02:
It was just a different type of animal altogether.

[01:07:07] Speaker 03:
I think we've taken you over your time, so unless there are other questions.

[01:07:10] Speaker 03:
Thank you very much, both sides, for the helpful arguments in this very complicated case.

[01:07:15] Speaker 03:
This case is submitted.