Gramercy Emerging Markets Fund v. Allied Irish Banks, P.L.C.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

GRAMERCY EMERGING MARKETS )
FUND, BALKAN VENTURES LLC, )
and RILA VENTURES LLC, )
)
Plaintiffs, )
)
v. ) C.A. No. 10321-VCG
)
ALLIED IRISH BANKS, P.L.C. and )
BULGARIAN-AMERICAN )
ENTERPRISE FUND, )
)
Defendants. )

MEMORANDUM OPINION

Date Submitted: September 14, 2016
Date Decided: December 30, 2016

Stephen B. Brauerman, Vanessa R. Tiradentes, and Sara E. Bussiere, of BAYARD,
P.A., Wilmington, Delaware; OF COUNSEL: Sean F. O’Shea, Michael E. Petrella,
Amanda L. Devereux, and Brian B. Alexander, of BOIES, SCHILLER & FLEXNER,
New York, New York, Attorneys for Plaintiffs Gramercy Emerging Markets Fund,
Balkan Ventures LLC, and Rila Ventures LLC.

Kevin R. Shannon and Christopher N. Kelly, of POTTER ANDERSON &
CORROON LLP, Wilmington, Delaware; OF COUNSEL: Walter C. Carlson and
Elizabeth Y. Austin, of SIDLEY AUSTIN LLP, Chicago, Illinois, Attorneys for
Defendant Allied Irish Banks, p.l.c.

Kenneth J. Nachbar, Ryan D. Stottmann of MORRIS, NICHOLS, ARSHT &
TUNNELL LLP, Wilmington, Delaware; OF COUNSEL: Brian D. Sieve, P.C. and
Jessica L. Staiger, of KIRKLAND & ELLIS LLP, Chicago, Illinois, Attorneys for
Defendant Bulgarian-American Enterprise Fund.

GLASSCOCK, Vice Chancellor
 The factual background of this case is baroque. The Plaintiffs are an

investment fund—a corporate citizen of the Cayman Islands doing business out of

Greenwich, Connecticut—and its two wholly-owned subsidiaries. The Plaintiffs

owned 26% of a bank that is a corporate citizen of, and which does business in,

Bulgaria. Majority control of the Bulgarian bank was held by a non-profit entity

incorporated in Delaware. The non-profit was created by the Congress of the United

States in 1991, to facilitate investment and the development of market capitalism in

Bulgaria, then newly emerging from Soviet domination.

In 2008, the non-profit sold a 49.99% interest in the Bulgarian bank to a bank

holding company, a corporate citizen of Ireland. According to the Plaintiffs, this

triggered a right of all minority stockholders in the bank to participate in the sale,

“pursuant to Article 149 of the Bulgarian Public Offer[ing] of Securities Act” (the

“Bulgarian POSA”). 1 According to the Complaint, that act triggers a participatory

right for minority stockholders upon a sale of a majority stake in a publicly-traded

company. The Plaintiffs contend that the sale of stock from the non-profit to the

Irish entity was a “de facto” sale of control, triggering the requirement that the Irish

entity make a mandatory tender offer for all outstanding bank stock. Alternatively,

the Plaintiffs assert there was a secret voting agreement between the non-profit and

the Irish bank, evidenced by a purported voting pattern, in circumvention of the same

1
Compl. ¶ 34.

1
regulation. Whether the Bulgarian POSA should be so interpreted appears to present

a novel question of Bulgarian law, and forms a key legal issue presented in this

litigation.

The initial question before me is more fundamental. Is Delaware an

appropriate forum? The Defendants have moved to dismiss on forum non

conveniens grounds, arguing that Bulgaria is the clearly-appropriate forum for this

litigation. They made this same argument, successfully, as defendants before an

Illinois court, in a virtually identical action involving the same plaintiffs. This raises

an interesting question under the forum non conveniens doctrine: how should the

Court address such serial filers?

The parties agree that a motion to dismiss on forum non conveniens grounds

is addressed to the discretion of this Court, but fundamentally disagree as to the

appropriate scope of the exercise of that discretion. Where a litigant has made a first

choice of venue (within jurisdictional limits), that choice is entitled to strong

deference. Such deference is attributable to public policy concerns involving comity

and avoidance of forum-shopping. So strong is the deference in favor of a plaintiff’s

choice of forum, that our case-law describes the showing required to defeat the

plaintiff’s first choice as one of “overwhelming hardship.”2 Recent cases have

2
See, e.g., Chrysler First Bus. Credit Corp. v. 1500 Locust Ltd. P'ship, 669 A.2d 104, 108 (Del.
1995) (emphasis added).

2
clarified that that adjective is not to be read as preclusive, but also make clear that a

defendant must demonstrate that the plaintiff’s choice of forum is manifestly

unreasonable before a court may dismiss on grounds of forum non conveniens.3

Such considerations are absent when a litigants’ first choice of forum is not

Delaware. Where a matter has been first-filed elsewhere, interests of comity and the

avoidance of forum shopping cut the other way, and this Court is able to “freely”

exercise its discretion to dismiss or stay in favor of the first-filed action, as justice

requires.4 These two doctrines are colloquially referred to by the seminal cases

setting them forth; the forum non conveniens analysis for cases first-filed in

Delaware is the overwhelming hardship test, analyzed via the Cryo-Maid factors;

the analysis used where another, earlier-filed action is pending elsewhere is known

as the McWane doctrine.

This case must, as I see it, be analyzed under the latter standard, despite the

fact that no earlier-filed actions remain pending. The Defendants argue that the

interests of justice weigh strongly in favor of the litigation proceeding, if at all, in

3
See Martinez v. E.I. DuPont de Nemours & Co., 86 A.3d 1102, 1106 (Del. 2014), as revised
(Mar. 4, 2014) (“To summarize, although the overwhelming hardship standard is stringent, it is
not preclusive. Accordingly, in deciding forum non conveniens motions to dismiss, Delaware trial
judges must decide whether the defendants have shown that the forum non conveniens factors
weigh so overwhelmingly in their favor that dismissal of the Delaware litigation is required to
avoid undue hardship and inconvenience to them.”).
4
See, e.g., Lisa, S.A. v. Mayorga, 993 A.2d 1042, 1047 (Del. 2010).

3
Bulgaria. The Plaintiffs, for their part, did not choose this Court, or this jurisdiction,

as the appropriate forum for resolution of this dispute. Their first choice of forum

was Federal District Court in Illinois, where the bank holding company does

business, and where they had jurisdiction over an individual defendant resident

there, a party defendant in Illinois but not here. This first action was dismissed for

lack of diversity. They then tried Illinois state court, where those same defendants

sought a dismissal on forum non conveniens grounds. That issue was litigated, and

the Illinois court, applying that jurisdiction’s forum non conveniens analysis,

dismissed, finding that Bulgaria, not Illinois, was the appropriate venue for this

litigation. The Illinois Appellate Court affirmed the trial court’s decision, by its own

detailed written opinion. While Plaintiffs’ petition for leave to appeal was pending

before the Illinois Supreme Court, as a third choice the Plaintiffs filed here. After

the Delaware action was filed, the Illinois Supreme Court denied Plaintiffs’ petition

for leave to appeal. The Plaintiffs indicated at oral argument that, if Defendants’

forum non conveniens motions are granted here, they may seek to litigate in yet

another American jurisdiction.

The forum non conveniens analysis employed by the Illinois court differs in

some respects from that applied in Delaware, and I assume (without deciding) that

the determination in favor of a Bulgarian forum in Illinois has no issue-preclusive

effect here. I note that no other litigation is currently pending in any forum

4
concerning these issues; therefore, a concern to avoid inconsistent future judgments

is not present. It is a fact inescapable, however, that Delaware is not Plaintiffs’ first

choice of forum, and the extreme deference paid to a plaintiff’s first choice of forum

is not indicated here. I determine, therefore, that the overwhelming-hardship

standard of Cryo-Maid and its progeny is inapplicable, and that I must apply my

discretion, in the interest of justice, in determining whether this forum is appropriate.

In the exercise of my discretion, after considering the facts of this case I find

dismissal of this matter appropriate. My reasoning follows.

I. BACKGROUND5

A. The Parties and Relevant Non-Parties

The Plaintiffs are an investment fund, Gramercy Emerging Markets Fund

(“Gramercy”), and two of its wholly owned entities—Balkan Ventures LLC and Rila

Ventures LLC (collectively “the Plaintiffs”). 6 Gramercy is a “Cayman Islands

Exempted Company incorporated in the Cayman Islands” with its principal place of

business in Greenwich, Connecticut.7 Balkan Ventures LLC “is a Delaware limited

liability company wholly owned by [Gramercy]” with its principal place of business

5
The facts, except where otherwise noted, are drawn from the allegations of the Complaint and
the documents incorporated by reference therein, and are presumed true for purposes of evaluating
the Defendants’ Motions to Dismiss. Because of the posture of this case, I take notice of certain
submissions of the parties as well. See VTB Bank v. Navitron Projects Corp., 2014 WL 1691250,
at *1 n.3 (Del. Ch. Apr. 28, 2014).
6
Compl. ¶ 10.
7
Id. at ¶ 1.

5
in Greenwich, Connecticut. 8 Rila Ventures LLC is also a “Delaware limited liability

company wholly owned by [Gramercy]” with its principal place of business in

Greenwich, Connecticut.9 The Plaintiffs share the same Greenwich, Connecticut

address.10

The Defendants are Allied Irish Banks, p.l.c. (“Allied”) and the Bulgarian-

American Enterprise Fund (“BAEF”).11 Allied is an “Irish Public Limited

Company” with an office in Chicago, Illinois.12 Allied has its principal place of

business in Dublin, Ireland.13 BAEF is a “not-for-profit corporation established by

the U.S. Congress, and incorporated in Delaware . . . .”14 BAEF has a mailing

address in Chicago, Illinois.

Non-party Bulgarian-American Credit Bank (“BAC Bank”) is a Bulgarian-

based bank located in Sofia, Bulgaria with a full banking license from the Bulgarian

National Bank.15 Transactions regarding BAC Bank’s stock are regulated by the

Bulgarian Financial Supervision Commission. 16

8
Id. at ¶ 2.
9
Id. at ¶ 3.
10
See id. at ¶¶ 1–3.
11
Id. at ¶¶ 4–5.
12
Id. at ¶ 4.
13
Allied’s Opening Br., Transmittal Aff. of Ryan T. Costa, Esq., (“Feb. 16, 2015 Costa Aff.”) Ex.
C.
14
Compl. ¶ 5.
15
Id. at ¶ 25.
16
See id. at ¶ 34.

6
 B. Factual Overview

This action arises from the sale of BAC Bank shares owned by BAEF to

Allied, which the Plaintiffs allege violated certain Bulgarian securities laws and thus

gives rise to claims for tortious interference, breaches of fiduciary duty, aiding and

abetting such breaches and tortious interference, and civil conspiracy in Delaware.17

1. The Origins of the BAEF and BAC Bank

Congress established BAEF in 1991 pursuant to the Support for East

European Democracy Act (the “SEED Act”). 18 The SEED Act was intended to

encourage American investment in Eastern Europe after the fall of the Soviet

Union.19 In light of this goal, “to fulfill its aim of encouraging American investment

in Eastern Europe, the SEED Act provided for the establishment of Enterprise

Funds.”20 BAEF is one of such funds.21 In 1996, BAC Bank was founded in Sofia,

Bulgaria, with a banking license from the Bulgarian National Bank, and was initially

funded “[u]sing money from BAEF raised primarily in the United States.” 22 “The

purpose of founding the [BAC Bank] by the U.S. Government was to foster

17
See id. at ¶¶ 9–17.
18
Id. at ¶¶ 19, 24.
19
Id. at ¶¶ 18–21.
20
Id. at ¶¶ 22, 24.
21
Id.
22
Id. at ¶ 25.

7
democracy in Eastern Europe, a mission the [BAC Bank] was to accomplish by

providing loans to small and medium sized businesses in Bulgaria.”23

2. The Plaintiffs Invest in BAC Bank

Prior to April 4, 2006, BAEF held a 65% stake in BAC Bank.24 On April 4,

2006, BAEF “issued an IPO through which it sought to reduce its 65% stake in [BAC

Bank] to a 53.88% stake.”25 The Plaintiffs participated in that IPO and bought

“approximately 3% of the outstanding shares of [BAC Bank].”26 The Plaintiffs

eventually increased their investment and “subsequently purchased additional shares

which increased their stake in [BAC Bank] to roughly 26%.”27 The Complaint

indicates that Plaintiffs’ investment decision was influenced by “statements

originating in the United States.”28

3. Sale of BAC Bank Shares by BAEF to Allied

BAEF announced on February 18, 2008, that it entered into an agreement to

sell 49.99% of the outstanding shares of BAC Bank to Allied. 29 At the time of this

announcement, “BAEF held 53.88% of the outstanding shares of [BAC Bank].”30

23
Id.
24
See id. at ¶ 26.
25
Id.
26
Id. at ¶ 27.
27
Id. at ¶ 30.
28
Id. at ¶ 28.
29
Id. at ¶ 32.
30
Id. at ¶ 33.

8
 The Complaint alleges that “pursuant to Article 149 of the Bulgarian Public

Offer[ing] of Securities Act, a shareholder purchasing a majority stake in a publicly

traded company was, at the time of the purchase, required to file at the Bulgarian

Financial Supervision Commission a tender offer for purchase of all outside

shares.”31 This amounts to a “mandatory tender offer rule;” if Allied bought a

majority of BAC Bank’s outstanding shares from BAEF, it was required to make a

tender offer to all other holders at a price equal to what it paid BAEF, according to

the Bulgarian POSA.32 The Complaint alleges the transaction was structured with

the “goal” of permitting Allied to gain “de facto control over [BAC Bank] while

willfully attempting to avoid the mandatory tender offer rule.” 33

In addition to structuring the sale to avoid the mandatory tender offer rule, the

Complaint alleges that there is “circumstantial evidence of a pre-mediated agreement

between [Allied] and BAEF . . .” which permitted Allied “to exercise de facto

majority control over [BAC Bank] through an agreement with BAEF that BAEF

would vote its shares in the same manner as [Allied].”34 Such circumstantial

evidence includes a “voting pattern” which suggests that BAEF voted with Allied

subsequent to the sale.35 Prior to the transaction between BAEF and Allied, the

31
Id. at ¶ 34.
32
Id. at ¶¶ 34–35.
33
Id. at ¶ 35.
34
Id. at ¶ 43.
35
Id.

9
“Plaintiffs made repeated demands on Defendants that they abide by the mandatory

tender offer rule and offer to purchase Plaintiffs’ shares at the price to be paid by

[Allied].”36 The Plaintiffs expressed their concerns via letters to the Defendants but

the sale still closed as structured on August 28, 2008.37 Ultimately, Allied sold its

shares in BAC Bank on May 16, 2011, thus the Complaint alleges that from “August

28, 2008 until May 16, 2011, [Allied] exercised control over [BAC Bank] through

an agreement with BAEF that allowed for [Allied] to determine the way in which

BAEF’s shares would be voted.”38

The Complaint alleges BAEF’s then President and Chief Executive Officer,

Frank Bauer, who is not a named defendant in this action (but was in Plaintiffs’

dismissed Illinois actions), as well as all other members of BAEF’s management

board, “were beneficiaries of BAEF’s incentive program which was tied to profits

on asset disposals.”39 Purportedly, this presented a conflict as to “whether to

recommend a share sale that would enrich themselves but also violate BAEF’s legal

duties to minority shareholders, or to vote against the share sale and forego a

personal pecuniary gain.” 40 The Complaint concludes that even in the face of “the

clear risks of participation, BAEF and Bauer participated in the vote to allow [Allied]

36
Id. at ¶ 38.
37
Id. at ¶¶ 38–42.
38
Id. at ¶ 44.
39
Id. at ¶ 45.
40
Id. at ¶ 46.

10
to purchase the vast majority of BAEF’s [BAC Bank] shares” and thus “BAEF

therefore placed its own financial gain over the duties it owed to [BAC Bank]

minority shareholders.”41

4. The Plaintiffs Raised Their Concerns to Bulgarian Regulators

Prior to the closing of the sale from BAEF to Allied in August 2008, the

Plaintiffs raised their concerns to various Bulgarian regulators. On April 22, 2008,

Gramercy’s lawyers in Bulgaria sent a letter to the Bulgarian Financial Supervision

Commission. 42 The letter relayed Gramercy’s concerns that the transaction was

structured to avoid the mandatory tender offer rule and that there was possibly an

agreement between the parties to exercise control, “in circumvention of mandatory

provisions of the Bulgarian legislation.”43 Gramercy requested that the Bulgarian

Financial Supervision Commission investigate any voting agreement. 44 The

Bulgarian Financial Supervision Commission replied on May 27, 2008.45 The

Bulgarian regulators noted that the transaction had not yet been finalized, and the

mandatory tender offer rule does not attach until more than 50% of voting shares are

actually acquired.46 Further, because the companies would be required to disclose

any such agreement upon the close of the transaction the regulator declined to solicit

41
Id.
42
See Feb. 16, 2015 Costa Aff. Ex. A-8.
43
See Feb. 16, 2015 Costa Aff. Ex. A-8 at 2–3.
44
Feb. 16, 2015 Costa Aff. Ex. A-8 at 3–4.
45
See Feb. 16, 2015 Costa Aff. Ex. A-9.
46
Feb. 16, 2015 Costa Aff. Ex. A-9 at 4.

11
any purported voting agreements from the parties at that time. 47 There are also

documents indicating that other regulators, such as the Bulgarian Commission for

Protection of Competition, were aware, prior to closing, of Gramercy’s challenges

to the transaction—specifically that “the transaction has resulted in the

circumvention of the [Bulgarian mandatory tender offer rule].”48 The transaction

ultimately closed despite such challenges. Certain regulatory decisions included an

appeal process.49 The record does not disclose whether the Plaintiffs pursued these

appeal rights.50

5. The Illinois Actions

a. The Federal Action

The Plaintiffs filed suit in Federal District Court in Illinois, demanding a jury

trial, on August 26, 2011. The complaint in the federal action is strikingly similar

to the Complaint in the later-filed action here—the Illinois federal action alleges the

same counts, on the same factual basis, but includes an additional defendant—Frank

Bauer.51 Other than Bauer the parties are identical, and the claims and facts pled

mirror those brought in this action. 52 The federal action was dismissed on December

47
Feb. 16, 2015 Costa Aff. Ex. A-9 at 5.
48
Feb. 16, 2015 Costa Aff. Ex. A-17 at 3–4.
49
See, e.g., Feb. 16, 2015 Costa Aff. Exs. A-12, A-18.
50
I note that it appears appeals were not taken, at least with respect to certain regulatory approvals.
See Feb. 16, 2015 Costa Aff. Exs. A-13, A-19.
51
Compare Feb. 16, 2015 Costa Aff. Ex. D with Compl.
52
Id.

12
13, 2011 for lack of subject matter jurisdiction due to a failure of complete diversity

of citizenship.53

b. The Illinois State Court Action

On February 24, 2012, the Plaintiffs filed a complaint in Illinois state court,

again demanding a jury trial.54 The complaint in the Illinois state court action is also

strikingly similar to the complaint in the federal action, and the present Complaint. 55

This Illinois action involved the same parties as the present action, except it also

included Bauer as a defendant.56 Like the federal action, the Illinois state action

asserted the same claims pled in the present Delaware action on a very similar factual

basis.57

The Defendants moved to dismiss the Illinois state action for failure to state a

claim and on forum non conveniens grounds.58 The Illinois court ordered “extensive

discovery to allow the parties to fully articulate their positions.” 59 The court applied

Illinois forum non conveniens law to the motion and dismissed the action, finding

that, in light “of the tenuous connection the case has to Illinois, a dismissal in favor

53
Feb. 16, 2015 Costa Aff. Ex. E at 1, 3.
54
Feb. 16, 2015 Costa Aff. Ex. F at 1.
55
Compare Feb. 16, 2015 Costa Aff. Ex. D and Ex. F with Compl.
56
See Feb. 16, 2015 Costa Aff. Ex. F.
57
Compare Feb. 16, 2015 Costa Aff. Ex. D and Ex. F with Compl.
58
Feb. 16, 2015 Costa Aff. Ex. G at 1 (the “Circuit Court of Cook County Illinois Order”).
59
Circuit Court of Cook County Illinois Order at 7.

13
of Bulgaria better serves the considerations of fundamental fairness, sensible and

effective judicial administration and the ends of justice.”60

The Illinois trial court, in applying its forum non conveniens analysis, made

the following observations: First, the court noted that Illinois was not the Plaintiff’s

“home forum” and their choice was therefore entitled to comparatively less

deference under Illinois law. 61 The court also noted that the “Plaintiffs chose to

invest in a Bulgarian bank in a transaction governed by Bulgarian securities laws, so

the risk of litigation in Bulgaria was foreseeable.” 62 Further the court found that

under the applicable Illinois standard “[o]btaining witness participation and access

to evidentiary sources favors having the case in Bulgaria.” 63 In support of this

finding the court observed that of the witnesses identified at the time “23 of the 25

reside in European Union countries with more than half residing in Bulgaria.”64 The

court also observed that while the Plaintiffs “have attempted to frame their claims as

recognized Illinois causes of action, their entire case is based on a violation of

Bulgaria’s Public Offering Securities Act.” 65 Further, the Court found that “the

courts and the public in Bulgaria have a significant interest in this controversy. The

alleged conspiracy to defraud foreign investors in one of its largest banks presents a

60
Id.
61
Id. at 4.
62
Id. at 3.
63
Id. at 5.
64
Id.
65
Id. at 6.

14
compelling interest in the subject matter.”66 Finally, the court observed that “[t]he

strong connection to Bulgaria cannot be ignored. Plaintiffs’ whole case is based on

Defendants’ alleged avoidance of a Bulgarian security law—a law which does not

exist in Illinois.”67

The Plaintiffs appealed the trial court’s June 27, 2013 dismissal to the Illinois

Appellate Court. On July 28, 2014, the Illinois Appellate Court affirmed the trial

court’s decision via a twenty-three page written opinion, finding the trial court did

not abuse its discretion in dismissing in favor of Bulgaria.68 The Plaintiffs then

petitioned for leave to appeal. The Illinois Supreme Court refused Plaintiffs’ appeal

on November 26, 2014. 69 I note the Complaint in the present Delaware action was

filed on November 5, 2014 and the Defendants moved to dismiss this action on

February 16, 2015.

6. The Purchase Agreement

BAEF and Allied entered into a purchase agreement (the “Stock Purchase

Agreement”) which governed the sale of BAC Bank shares from BAEF to Allied.70

The Plaintiffs were not parties to this agreement; in fact, they assert that existence

66
Id. at 7.
67
Id.
68
Feb. 16, 2015 Costa Aff. Ex. H at 1–2.
69
Gramercy Emerging Markets Fund v. Allied Irish Banks, p.l.c., 21 N.E.3d 714 (Ill. 2014)
(TABLE).
70
See Pls’ Answering Br., Transmittal Aff. of Amanda L. Devereux, Esq., Ex. 7 (the “Stock
Purchase Agreement”).

15
of this agreement was first revealed during forum non conveniens discovery in the

Illinois actions. Section 8.12 of the Stock Purchase Agreement provides a Delaware

choice of law clause indicating that “[t]his Agreement shall be governed by and

construed in accordance with the internal laws of the State of Delaware . . . .”71

Additionally, Section 8.13 of the Stock Purchase Agreement provides that “[a]ny

suit, action or proceeding against any Party hereto arising out of or relating to this

Agreement or any transaction contemplated hereby may be brought in any federal

or state court located in the [S]tate of Delaware . . . .”72 Further, Section 8.4 indicates

that there are no third-party beneficiaries to the contract and that the “Agreement is

for the sole benefit of the parties hereto . . . and nothing herein express or implied

shall give or be construed to give any Person, other than the Parties hereto and such

permitted assigns, any legal or equitable rights hereunder.” 73 The parties to the

contract were defined as BAEF and Allied. 74

C. Procedural History of this Action

The Plaintiffs filed their Complaint in this action on November 5, 2014. The

Complaint pleads five counts. Count I asserts a claim for tortious interference with

prospective business advantage against BAEF, for allowing Allied to purchase

71
Stock Purchase Agreement § 8.12.
72
Id. at § 8.13.
73
Id. at § 8.4.
74
Id. at § 1.1.

16
49.99% of BAC Bank “with knowledge that [Allied] would circumvent the share

purchase requirements under applicable law.”75 Count II asserts a breach of

fiduciary duty claim against BAEF, as a majority and controlling shareholder of

BAC Bank, for allowing Allied’s purchase which was “deliberately structured in an

impermissible and unlawful attempt to avoid the mandatory tender offer rule under

applicable law.”76 Count III asserts a breach of fiduciary duty claim against Allied,

as the “controlling shareholder” from “August 28, 2008 until May 16, 2011” for

breach of its fiduciary duties by “refusing to offer to Plaintiffs and all other minority

shareholders a tender offer in connection with its August 28, 2008 purchase of de

facto control over [BAC Bank] as provided for by Bulgarian law.”77 Count IV

asserts against BAEF a claim for aiding and abetting tortious interference and a

breach of fiduciary duty.78 Finally, Count V asserts a claim of civil conspiracy

against BAEF and Allied for conspiring to avoid the mandatory tender offer rule and

taking overt acts in furtherance of such agreements. 79 Each of these causes of action

depends, directly or secondarily, upon the application of Bulgarian Securities Law,

specifically, Article 149 of the Bulgarian POSA.

75
Compl. ¶¶ 50–59.
76
See id. at ¶¶ 60–66.
77
See id. at ¶¶ 67–72.
78
See id. at ¶¶ 73–80.
79
See id. at ¶¶ 81–85.

17
 Each Defendant moved to dismiss the Complaint on February 16, 2015 on

several grounds, including failure to state a claim, lack of personal jurisdiction and

forum non conveniens. The other grounds for Defendants’ Motions to Dismiss were

reserved, and the parties have proceeded solely on the forum non conveniens portion

of the motions.80 On October 16, 2015, I ordered that discovery provided in

connection with the Illinois state action be updated.81 An initial oral argument was

held on May 5, 2016. I requested supplemental briefing from the parties regarding

the appropriate standard of review under the unique facts of this case. Following

submission of supplemental briefing, a second oral argument was held on September

14, 2016. This Memorandum Opinion addresses Defendants’ Motions to Dismiss

on forum non conveniens grounds.

II. ANALYSIS

Stated simply, the Plaintiffs’ first choice of a forum was Illinois, presumably

because that state’s courts had jurisdiction over a greater number of potential

defendants than other American jurisdictions, and because (unlike Delaware) at least

some relevant actions—at least with respect to the Plaintiffs’ conspiracy theories—

arguably took place in Illinois.82 The Defendants sought a dismissal, arguing

80
See Order Regarding Briefing on Motions to Dismiss (Oct. 16, 2015); May 5, 2016 Oral
Argument Tr. 5:12–6:17 (indicating the parties are only proceeding on forum non conveniens).
81
See Order Regarding Briefing on Motions to Dismiss (Oct. 16, 2015).
82
See Feb. 16, 2015 Costa Aff. Ex. H. The intermediate appellate decision by the Appellate Court
of Illinois First Judicial District noted that the “plaintiffs contend the situs of the injury in Chicago
entitles them to substantial deference.” Id. at ¶ 22. It appears the Plaintiffs, in their earlier

18
Bulgaria was the appropriate forum for any litigation. Plaintiffs’ action was

accordingly dismissed by the Illinois state trial court on forum non conveniens

grounds in favor of Bulgaria—a decision affirmed by the Illinois Appellate Court.

After the Illinois Appellate Court affirmed the trial courts dismissal, but before the

Illinois Supreme Court denied Plaintiffs’ petition for leave to appeal, the Plaintiffs

filed this near-identical case in Delaware, and rely on our supposedly more-plaintiff-

friendly forum non conveniens standard for a result more favorable than received in

the Prairie State.83

My analysis, detailed below, must begin with whether the Cryo-Maid or

McWane standard applies here. The answer, to me, is made obvious by considering

that, if the Plaintiffs had initially responded to the Defendants’ motions to dismiss

in Illinois by filing this action in Delaware—before the Illinois trial court had an

opportunity to consider the motion—the Delaware placeholder action would clearly

have been subject to a McWane analysis on a motion to dismiss in Delaware. I see

no basis to employ a more plaintiff-friendly analysis here, simply because the

Plaintiffs were unsuccessful in Illinois before making this second-choice Delaware

filing.

litigation, asserted a theory that the purported secret voting agreement was related to a January
2008 meeting in Chicago. See id.
83
Obviously, a decision of the Illinois court that Illinois is a fatally-inconvenient forum for this
litigation is not res judicata of whether a Delaware forum is appropriate. Because of my decision
here, I need not decide whether the Plaintiffs are precluded from re-litigating particular issues
addressed by that court.

19
 A. The Applicable Standard

“A forum non conveniens motion is addressed to the trial court's sound

discretion.”84 However, that discretion is not unlimited, and this Court must follow

the analysis prescribed by our Supreme Court.85

Our Supreme Court has recognized two principal forum non conveniens

doctrines.86 As recently explained in Lisa, S.A. v. Mayorga,87 the two doctrines of

“overwhelming hardship and McWane—operate consistently and in tandem to

discourage forum shopping and promote the orderly administration of justice ‘by

recognizing the value of confining litigation to one jurisdiction, whenever that is

both possible and practical.’”88 Which doctrine applies depends, primarily, upon the

posture of the case and the considerations which flow from that posture. The

Supreme Court has indicated, “[i]t is a well settled rule of Delaware law that

defendants moving to dismiss a first-filed suit on the ground of forum non

conveniens must establish with particularity that they will be subjected to

overwhelming hardship and inconvenience if required to litigate in Delaware.” 89

However, under certain circumstances the McWane doctrine, as interpreted in Lisa,

84
Martinez v. E.I. DuPont de Nemours & Co., 86 A.3d 1102, 1104 (Del. 2014) (citation omitted).
85
See, e.g., id. at 1105 n.11 (collecting cases where the Supreme Court reversed trial court
determinations that the overwhelming-hardship standard was met).
86
See Lisa, S.A. v. Mayorga, 993 A.2d 1042, 1047 (Del. 2010).
87
Id.
88
Id. (quoting United Phosphorus, Ltd. v. Micro-Flo, 808 A.2d 761, 764 (Del. 2002)).
89
Id. (citations omitted) (emphasis supplied by Supreme Court).

20
attaches and provides a trial court broader discretion in analyzing a motion to dismiss

on forum non conveniens grounds.90 Thus, as a threshold issue, I must determine

which doctrine attaches here.

1. Overwhelming Hardship

Our Supreme Court recently had occasion to discuss the “origins and

meaning” of the overwhelming-hardship standard in Martinez v. E.I. DuPont de

Nemours & Co.91 Our case law provides that, when seeking to vitiate a first-filed

choice of forum, “a defendant must meet the high burden of showing that the

traditional forum non conveniens factors weigh so heavily that the defendant will

face ‘overwhelming hardship’ if the lawsuit proceeds in Delaware.” 92 The Supreme

Court clarified that perceptions that this test presents an insurmountable burden are

“not accurate.”93 Rather, the Court held in Martinez that “‘a more restrained

meaning is at the essence of the [overwhelming hardship] standard.’” 94 Specifically,

“the overwhelming hardship standard is not intended to be preclusive. Rather, it is

intended as a stringent standard that holds defendants who seek to deprive a plaintiff

of her chosen forum to an appropriately high burden.”95

90
See id.
91
86 A.3d 1102, 1105 (Del. 2014).
92
Id. at 1104 (citation omitted).
93
Id. at 1105.
94
Id. (quoting IM2 Merchandising & Mfg., Inc. v. Tirex Corp., 2000 WL 1664168, at * 8 (Del.
Ch. Nov. 2, 2000)) (alterations supplied by Supreme Court).
95
Id. (citation omitted) (emphasis added).

21
 One justification for application of the overwhelming-hardship standard is a

deference for a plaintiff’s choice of forum. 96 To my mind, this represents the default

rule in Delaware: when a plaintiff avails herself of our courts as her first choice of

forum, her choice is entitled to the extraordinary deference which the overwhelming-

hardship standard provides. Absent such a rule, unwholesome forum shopping

would result, comity would be damaged and inconsistent judicial decisions could

result. Here, however, Delaware was not Plaintiffs’ first choice of forum. Rather

the Plaintiffs filed their suit in Delaware only after being dismissed by both Federal

and State courts in Illinois. In light of this, I turn to a discussion of the other

applicable analysis available under our law.

2. McWane and Lisa

McWane addresses a scenario where one party has filed in a jurisdiction other

than Delaware, and the party-opponent has thereafter filed here. 97 It is obvious that,

in such a matter, the factors that weigh so strongly in favor of a first-filed Delaware

plaintiff under Cryo-Maid—the respect for a plaintiff’s choice of forum, to avoid

96
See, e.g, id.; Chrysler First Bus. Credit Corp. v. 1500 Locust Ltd. P'ship, 669 A.2d 104, 107
(Del. 1995) (noting that one of the rationales for the traditional Cryo-Maid analysis is the principle
that “only in a rare case should a plaintiff's choice of forum be defeated in favor of a later-filed
action in another jurisdiction”).
97
See McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng'g Co., 263 A.2d 281, 282–83
(Del. 1970).

22
forum-shopping and inconsistent judicial decisions—cut just as strongly against the

Delaware second filer. A McWane analysis directs the court to examine whether the

actions arise from the same facts, and whether the first forum can provide justice; if

so, the court may freely exercise its discretion to stay or dismiss. Thus, McWane

and Cryo-Maid are simply mirror-image analyses bent on serving the same

beneficial interests.

Cryo-Maid and McWane involve competing litigants with competing choices

of forum. But what of a plaintiff who sees an advantage to filing first in another

jurisdiction, then, while that action is pending, files in Delaware? That situation was

addressed by our Supreme Court in Lisa.

a. The Lisa Decision

Because it is central to my rationale here, it is worth reviewing Lisa in some

detail. In Lisa, the Delaware Supreme Court affirmed a Court of Chancery dismissal

on forum non conveniens grounds.98 Lisa arose from a later-filed Delaware action

in which the plaintiff, Lisa S.A. (“Lisa”), a Panamanian corporation, alleged that

after it commenced a prior 1998 Florida Action alleging fraud in a 1992 stock sale,

the defendants “fraudulently reorganized” in order “to eliminate or diminish Lisa's

ability to obtain relief in the 1998 Florida Action.” 99 Lisa was the plaintiff in the

98
Lisa, 993 A.2d at 1045–48.
99
Id. at 1045.

23
Delaware action as well as the related earlier-filed Florida actions.100 The Delaware

Supreme Court observed that “Lisa's Delaware action was the last filed in [a]

complicated family dispute.”101 Prior to dismissing the Delaware action, the Court

of Chancery stayed the later-filed Delaware action “in favor of the then-pending

first-filed 1998 Florida Action, and held the motion to dismiss in abeyance pending

the outcome of Lisa's appeal in that Florida action.” 102 Following Lisa’s

unsuccessful appeal of the dismissal of its 1998 Florida Action, the Court of

Chancery dismissed all claims against the defendants—with certain claims

dismissed on forum non conveniens grounds.103

In its analysis the Court of Chancery applied the traditional factors provided

by the Cryo-Maid standard. 104 On appeal of the Court of Chancery’s dismissal, the

Delaware Supreme Court framed Lisa’s argument as asserting

that the Vice Chancellor misapplied the forum non conveniens standard,
under which (Lisa says) the defendants were required to establish that
they would be subjected to ‘overwhelming hardship’ if forced to litigate
in Delaware. Lisa argues that although the Court of Chancery
purported to apply the overwhelming hardship test, in fact it merely
balanced the hardship to the defendants from being required to litigate
in Delaware against the hardship to Lisa from having to litigate in the
defendants' proposed forum-Guatemala. Lisa contends that the legal
standard, properly applied, required the Court of Chancery to determine
whether the defendants made a strong showing that the burden of
100
Id. at 1044–46.
101
Id. at 1047 n.16 (emphasis in original).
102
Id. at 1045.
103
Id. at 1045–46.
104
See Lisa, S.A. v. Mayorga, 2009 WL 1846308, at *8–10 (Del. Ch. June 22, 2009) (finding the
defendants met the “heavy burden” of showing an overwhelming hardship).

24
 litigating in this forum is so severe as to result in manifest hardship to
them. The trial court did not do that, Lisa claims, and therefore
reversibly erred.105

The Supreme Court found that “Lisa's claim is without merit, because the

‘overwhelming hardship’ standard does not apply to Delaware actions—like this

one—that were not ‘first filed.’”106 The Supreme Court emphasized that “[i]ndeed,

in all cases where this Court has applied the ‘overwhelming hardship’ standard, the

Delaware action was either the first filed or the only filed action.” 107 The Court

discussed the deference given to first-filed complaints via the overwhelming-

hardship standard,108 but explained that

[c]onversely, where the Delaware action is not the first filed, the policy
that favors strong deference to a plaintiff's initial choice of forum
requires the court freely to exercise its discretion in favor of staying or
dismissing the Delaware action (the ‘McWane doctrine’). These two
forum non conveniens doctrines-overwhelming hardship and McWane-
operate consistently and in tandem to discourage forum shopping and
promote the orderly administration of justice by recognizing the value
of confining litigation to one jurisdiction, whenever that is both
possible and practical. 109

105
Lisa, 993 A.2d at 1046–47 (citations and internal quotations omitted).
106
Id. at 1047.
107
Id. at 1047 n.13 (collecting cases).
108
See id. at 1047 (“Where the Delaware action is the first-filed, the plaintiff's choice of forum
will be respected and rarely disturbed, even if there is a more convenient forum to litigate the
claim.”).
109
Id. (internal quotations and citations omitted) (emphasis supplied by Supreme Court).

25
 The Supreme Court then conducted a McWane-style analysis.110 First, the

Court observed that the Delaware action was not the first-filed action. 111 Next, the

Court acknowledged that “[a]lthough the parties to the 1998 Florida Action are not

identical to the parties in this Delaware case, the 1998 Florida Action squarely

implicated the McWane doctrine, because it was filed in a jurisdictionally competent

court and was ‘functionally identical’ to the later-filed Delaware action.” 112 Further

the Court found that “[b]oth actions arose out of a ‘common nucleus of operative

fact’”113—both stemmed from the underlying allegation of fraud in the 1992 stock

sale.114

The Supreme Court indicated that “[t]he 1998 Florida Action was what

propped up this Delaware action. Its dismissal caused that prop to collapse and

warranted the dismissal of the Delaware action under McWane.”115 Importantly the

Supreme Court found “[t]hat the 1998 Florida Action is no longer pending does not

110
See id. at 1047–48. Our Supreme Court has stated the McWane considerations as follows:
“[u]nder McWane and its progeny, a judge, in the exercise of his or her discretion, may stay or
dismiss a later-filed suit where a first-filed suit is pending in a court capable of administering
prompt and complete justice, and involves substantially similar parties and issues.” Chadwick v.
Metro Corp., 2004 WL 1874652, at *2 (Del. Aug. 12, 2004) (TABLE) (citation omitted). I note
that the origins of the McWane doctrine arise from an inverse set of facts than present in Lisa. In
a traditional McWane circumstance a Delaware action is filed second in an effort to defeat the
plaintiff’s original choice of forum. See McWane, 263 A.2d at 282–83. Our case law, as evidenced
by Lisa, has evolved past such original circumstance.
111
Lisa, 993 A.2d at 1047.
112
Id. at 1047–48 (quoting Chadwick, 2004 WL 1874652, at *2).
113
Id. at 1048 (quoting Chadwick, 2004 WL 1874652, at *2).
114
Id.
115
Id.

26
change the outcome, even though language in McWane speaks in terms of a ‘prior

action pending in another jurisdiction.’”116 Immediately after making this

observation, the Court went on to discuss comity principles stating:

[t]o allow Lisa to proceed with this Delaware action after the dismissal
with prejudice of the predicate Florida action, would ignore the binding
effect of the Florida adjudication, and create the possibility of
inconsistent and conflicting rulings. That is precisely the outcome
McWane's doctrine of comity seeks to prevent. We therefore affirm the
Court of Chancery's dismissal of Lisa's action, on forum non conveniens
grounds, under McWane.117

b. Lisa’s Rationale Applied Here

Lisa involved a plaintiff who had filed in Florida, alleging fraud in a stock

sale, and sought to redress alleged bad-faith litigation tactics following

commencement of that action—as well as vindicate the underlying fraud118—via

litigation in Delaware; the Florida action was, in the Supreme Court’s words, a

“prop” beneath the Delaware action—the actions arose from a common nucleus of

operative facts, but the causes of action were only “functionally” identical.119

Here, by contrast, the Illinois and Delaware actions are, for practical purposes,

fully identical. The Illinois court dismissed in favor of Bulgaria on forum non

116
Id. (quoting McWane, 263 A.2d at 283) (emphasis added).
117
Id. at 1048 (citation omitted). The Supreme Court noted that the 1998 Florida Action “raises
questions of res judicata and collateral estoppel,” but such doctrines were not the basis of its
decision. See id. at 1048 n.19.
118
See Lisa, 2009 WL 1846308 at *9. The Court of Chancery found that “[i]n order to prevail on
either of the remaining counts, Lisa will first have to prove the existence of the underlying fraud
alleged to have occurred in Guatemala in 1992.” Id.
119
See Lisa, 993 A.2d. at 1047–48.

27
conveniens grounds; Plaintiffs want an American forum; accordingly, they bring the

same action here as was dismissed in Illinois, seeking Delaware’s plaintiff-friendly

overwhelming-hardship standard.

It is, I think, beyond cavil that, had this case been brought prior to the

dismissal of the Illinois action, an appropriate motion would have been addressed

under the McWane analysis, and the Delaware action dismissed or stayed. The

McWane analysis would have proceeded thusly: The Illinois state action was first-

filed, predating the present action by several years. The Illinois state court was

“capable of administering prompt and complete justice,”120 and in fact had greater

jurisdictional scope over the litigants than this Court. The parties in each action are

nearly identical. The Plaintiffs are the same, and the Defendants are the same, except

Bauer is no longer named as a Defendant, presumably because of jurisdictional

strictures. Further, the disputes pursued in Illinois and here arise from a common

nucleus of operative fact—actually, they are identical: an alleged structuring of a

2008 stock sale that either violated Bulgarian securities law by the nature of its

structure or via a purported secret voting agreement. Dismissal would therefore have

been proper under McWane. The Plaintiffs point out that, unlike in McWane, no

prior action remains pending; they argue that having litigated and lost in Illinois,

they are entitled to the plaintiff-friendly overwhelming-hardship standard here, as

120
See Chadwick, 2004 WL 1874652, at *2.

28
though this jurisdiction were their first choice of forum. But this contention runs

afoul, not only of incongruity, but of our Supreme Court’s analysis in Lisa.

Lisa clarified that the forum non conveniens analysis of McWane applies

outside the factual scenario of McWane itself, and may apply despite the absence of

a pending action in another jurisdiction. 121 The Plaintiffs argue strenuously that Lisa

involved stronger principles of comity than the instant situation; they point out that

the Florida court’s substantive decision in Lisa had kicked the “prop” out of the

Delaware action, and that an inconsistent result would have been necessary in

Delaware for the plaintiff to be successful here, whereas the instant case involves an

Illinois dismissal on a non-substantive ground. That is true, but to my mind

unpersuasive. Lisa involved two (actually, several) related actions; the substantive

resolution in Florida served, under principles of comity, as a bar to the Delaware

action. The Plaintiffs here have brought two (actually, three) nearly identical actions

serially.122 The fact that the Plaintiffs waited to lose in Illinois, then take—and

121
See Lisa, 993 A.2d at 1048. Evincing McWane’s evolution, our Supreme Court, beyond its
decision in Lisa, has also explicitly expanded McWane to hold that the doctrine can be invoked
when an arbitration proceeding was pending before commencement of a Delaware action. See LG
Elecs., Inc. v. InterDigital Commc'ns, Inc., 114 A.3d 1246, 1253 (Del. 2015) (affirming a Court of
Chancery dismissal under McWane holding “that the parties' arbitration proceeding constitutes a
first-filed action for purposes of the McWane analysis”). I note the Court’s decision in LG
Electronics relied primarily on the principles of efficiency and consistency of results in reaching
its determination that McWane should apply. See id. at 1252–53.
122
Requiring the attachment of the overwhelming-hardship standard to this later-filed Delaware
action could incentivize such a species of serial litigation. Plaintiff’s counsel has candidly
admitted that all his client is “trying to do here is get a forum to be heard in the United States.”
May 5, 2016 Oral Argument Tr. at 58:22–23. Were the overwhelming-hardship standard to attach

29
lose—an appeal in that jurisdiction, before coming to Delaware to litigate the same

issues, does not, to my mind, strengthen their case. The fact that the forum non

conveniens analysis in Illinois differs in some respects from that in Delaware means

that the Illinois decision may not be issue-preclusive here, but it does not, to my

mind, completely eliminate issues of comity and forum-shopping as concerns.

Under McWane, a subsequent Delaware action would have been subject to dismissal

in favor of an identical first-filed pending action in Illinois; under Lisa, the fact that

the pending action has been resolved does not necessarily change this result. The

Illinois trial and appellate courts, after discovery and on consideration of the

positions of the parties, determined that Bulgaria provides an adequate forum and is

the appropriate forum for any litigation. I find, based on the record before me, that

dismissal under the McWane analysis is appropriate.123

I note that the Plaintiffs rely on two Delaware Superior Court cases applying

the overwhelming-hardship standard following a forum non conveniens dismissal in

to later-filed Delaware actions such as Plaintiffs’ here, litigants could, with little risk, test their ties
to another forum for strategic reasons and then file in Delaware and still benefit from the great
deference afforded by the overwhelming-hardship standard. Such a result, I believe, is not
consistent with inter-state comity.
123
In further support of the application of McWane here, I find instructive certain Delaware
Superior Court decisions interpreting Lisa. See, e.g., Chaverri v. Dole Food Co., Inc., 2013 WL
5977413, at *2 (Del. Super. Nov. 8, 2013) (applying McWane in light of Lisa and dismissing a
later-filed Delaware action on forum non conveniens grounds where a first-filed Louisiana action
was already dismissed pursuant to Louisiana’s prescription statute, stating that “[t]he Delaware
Supreme Court reaffirmed and expanded the McWane doctrine when it decided Lisa v. Mayorga”)
(citation omitted) aff'd, 2014 WL 7367000 (Del. Oct. 20, 2014).

30
a prior-filed action. 124 One, Trinity Investment Trust, L.L.C. v. Morgan Guaranty

Trust Co. of New York,125 was decided long before Lisa clarified the application of

the McWane doctrine; the second, In re Asbestos Litigation,126 was decided shorty

after Lisa; the opinion does not mention Lisa, and it appears that the litigants there

failed to make the court aware of the decision. 127 Accordingly I find neither Trinity

nor In re Asbestos persuasive here.

A final argument of the Plaintiffs should be briefly addressed. The Plaintiffs

point to a choice of law and a forum provision in favor of Delaware in the Stock

Purchase Agreement, which they learned of during discovery in the Illinois action.

They assert had they known of these clauses they would have brought their action in

Delaware initially. They argue that I should exercise discretion in favor of allowing

the action to proceed here, in light of the fact that this information was unknown at

the time of the Illinois filing. 128 This argument, however, overlooks the fact that

such provisions were explicitly limited to the parties to that agreement—BAEF and

124
See Pls’ Supp. Opening Br. at 5–7 (citing Trinity Inv. Trust, L.L.C. v. Morgan Guar. Trust Co.
of N.Y., 2001 WL 1221080 (Del. Super. Sept. 28, 2001) and In re Asbestos Litig., 2012 WL
1980414 (Del. Super. May 16, 2012)).
125
2001 WL 1221080 (Del. Super. Sept. 28, 2001).
126
2012 WL 1980414 (Del. Super. May 16, 2012).
127
See id. at *2 (stating “Delaware law consistently refers to pending cases and the court is aware
of no decision applying a differen[t] standard because other similar suits were previously filed and
dismissed elsewhere”).
128
Of course, the Plaintiffs did not react to discovery of this contractual provision by seeking
dismissal without prejudice in Illinois, in favor of a Delaware filing; far from it. They continued
litigating in favor of their first choice of forum and pursued an unsuccessful appeal.

31
Allied. The agreement in no way creates a contractual right for another shareholder

to sue the parties to that contract in Delaware to enforce purported violations of

Bulgarian securities laws. The issues, burdens, and considerations in litigating in

Delaware a sale contract governed by Delaware law, between the parties to that

contract, are radically different than the burden raised by litigating in Delaware an

alleged violation of Bulgarian securities law, premised on a purported secret

agreement and accompanying conspiracy. Thus, on the facts of this case, and given

the clear terms and intent of the parties to the contract, the provisions in the Stock

Purchase Agreement do not require nor favor that this litigation occur in Delaware.

Because of my decision here, I need not reach the question of whether

litigation in Delaware would create an overwhelming hardship for the Defendants.

I note, however, that I am dubious of the Plaintiffs’ assertion that, if the

overwhelming-hardship standard attached, they would easily defeat this motion.

The following considerations would inform such an analysis, as they inform my

decision here under McWane and Lisa. Plaintiffs’ claims in the present action hinge

on whether Bulgarian law was violated. 129 I note that Bulgarian regulators, despite

having been on notice and responding to Plaintiffs’ concerns, did not find such a

violation of the Bulgarian POSA existed. The Plaintiffs ask, nonetheless, that I

129
See, e.g., Pls’ Supplemental Answering Br. 9–10 (stating “Plaintiffs’ claims under U.S. law
(e.g., tortious interference with prospective business advantage) hinge on Defendants’ POSA
violation . . . which Plaintiffs do not dispute”).

32
interpret Bulgarian securities law in light of the instant fact pattern, a matter which,

according to the record, poses certain questions of first judicial impression. 130 They

then ask that I apply that law, find that a violation of Bulgaria’s mandatory tender

offer rule occurred, and that such violation provides a basis for the causes of actions

currently pled in Delaware. This presents questions presumably of keen interest to

Bulgaria, but not Delaware. At bottom, the relief sought would require that I find

the regulators of Bulgaria failed to enforce their law, or applied their law incorrectly.

As noted earlier, it is unclear from this record whether the Plaintiffs pursued rights

to review actions of the regulators, and addressing this matter here would,

presumably, require me to apply Bulgarian law on exhaustion of remedies, as well

as doctrines of deference to regulators, a daunting matter for this Court, and of

interest primarily to Bulgaria, not Delaware. Additionally, as the Illinois court

noted, the record indicates that a number of the witnesses necessary to the

Defendants are in Europe, including in Bulgaria, and there would be some burden

securing their testimony. Obtaining the live testimony of some witnesses would

130
See Allied’s Reply Br., Declaration of Silvy Chernev ¶ 22 (stating “no interpretive decisions
(which carry the greatest precedential value) are available regarding what constitutes an agreement
under Article 149 of the POSA”). The Plaintiffs point out that Bulgaria is a civil-law country, and
that case precedent—and thus the decision of this Court—is accordingly less important to the
development of Bulgarian law than would be the case in a common-law jurisdiction; nonetheless,
I presume a Bulgarian interest in the development of its law regarding a novel issue. See Martinez,
86 A.3d at 1109–10 (“If, as our jurisprudence holds, significant weight should be accorded the
neutral principle that important and novel issues of Delaware law are best decided by Delaware
courts, then it logically follows that our courts must acknowledge that important and novel issues
of other sovereigns are best determined by their courts where practicable.”) (citations omitted).

33
require overseas travel on their part, and would raise questions of the availability of

compulsory attendance. Undoubtedly, trial here would require translation of some

documents written via the Cyrillic, not Latin, alphabet.

While it is obvious that the Plaintiffs desire to litigate this matter in an

American forum, the fact is that the Plaintiffs bought stock in a Bulgarian company

regulated by Bulgarian law, and are trying to vindicate a right under that law. A

foreign judge blundering in to vindicate such rights under the circumstances present

here seems problematic. 131 A decision by this Court could have serious, unintended

consequences on the development of Bulgarian law and on conditions for investment

of capital in that country.

Delaware’s interests in this litigation, in contrast, are sparse. Two of the

Plaintiffs are Delaware entities who chose to first sue in Illinois. Each is an on-shore

limited liability company wholly owned by a Cayman Islands hedge fund. One of

the Defendants—BAEF—is not-for-profit and is a creature of the United States

Congress, incorporated in Delaware. There are no novel issues of Delaware

corporate governance to be decided. Rather there is a decision to be made whether

certain individual actors at the Defendants’ respective entities—all of whom are

131
I note that I am cognizant of our case law which indicates that a balancing analysis is
inappropriate in a traditional forum non conveniens analysis. See, e.g., Mar-Land Indus.
Contractors, Inc. v. Caribbean Petroleum Refining, LP, 777 A.2d 774 (Del. 2001). The Supreme
Court in Lisa characterized Mar-Land “as reversing dismissal for forum non conveniens because
the Court of Chancery inappropriately applied a balancing test to a Delaware lawsuit that was the
only action filed.” Lisa, 993 A.2d at 1047 n.13 (emphasis added).

34
outside of Delaware—structured a transaction which violated Bulgarian securities

law.

Accordingly, I note that Plaintiffs’ first choice of forum resulted in a decision

that justice required the litigation to proceed, if at all, in Bulgaria; that issues of

Bulgarian law would require expert testimony; and that the Illinois courts’

determination—that notions of efficiency and comity indicate that a dismissal on

forum non conveniens grounds would be just—appear to be supported by the record

here.132 In light of these considerations, the outcome here if Cryo-Maid applied is

by no means obvious. At any rate, all these factors inform my exercise of discretion

in favor of dismissal here, consistent with McWane and Lisa.

III. CONCLUSION

For the foregoing reasons, Defendants’ Motions to Dismiss are granted. An

appropriate order accompanies this Memorandum Opinion.

132
I note that the parties vigorously dispute the head-count and location of witnesses and the
location and language of relevant documents. The only thing that is clear from this dispute is that
many documents and witnesses are abroad, primarily in European Union nations including
Bulgaria, while none are in Delaware.

35
 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

GRAMERCY EMERGING MARKETS )
FUND, BALKAN VENTURES LLC, )
and RILA VENTURES LLC, )
)
Plaintiffs, )
)
v. ) C.A. No. 10321-VCG
)
ALLIED IRISH BANKS, P.L.C. and )
BULGARIAN-AMERICAN )
ENTERPRISE FUND, )
)
Defendants. )

ORDER

AND NOW, this 30th day of December, 2016,

The Court having considered Defendants’ motions to dismiss, and for the

reasons set forth in the Memorandum Opinion dated December 30, 2016, IT IS

HEREBY ORDERED that Defendants’ Motions to Dismiss are GRANTED.

SO ORDERED:

/s/ Sam Glasscock III

Vice Chancellor