Elliott Greenleaf wins new remedies in Delaware Chancery Court against Chinese Businesses Incoporated in Delaware

The Wall Street Journal recently reported that Elliott Greenleaf won novel remedies compelling Chinese businesses incorporated in Delaware to make their books and records available for inspection by investors.

In re Yinlips Technology Inc a/k/a Yinlips Digital Technology Co. Ltd. Litigation and In re Southern China Livestock, Inc. Litigation, investors purchased stock, believing these companies were soon going public through an IPO. When this failed to happen, both companies “went dark”, stopped reporting to the SEC, and the market for trading in their securities ceased.

After the Chinese companies stonewalled their investors’ requests for financial information, Elliott Greenleaf successfully brought suit in the Delaware Court of Chancery, and won orders compelling production. Then after both companies failed to timely comply, Elliott Greenleaf won contempt of: (a) a ‘put’ right at the fair market value of the companies’ shares; (b) the appointment of a receiver to exercise control over the Defendants’ records and assets to enforce the Court’s orders; and (c) attorneys’ fees. The Chancery Court described the relief sought fair and equitable. This creative remedy was reported in The Wall Street Journal article “Court Sides With U.S. Investors Against China’s Yinlips” as a “new legal tool for U.S. investors who are locked in disputes with Chinese companies”.

Elliott Greenleaf’s Jonathan M. Stemerman and Eric M. Sutty successfully represented the investors in these matters.