01/17/2013 03:49:40 PM EST
Big Award in Chinese Reverse Merger Case
In what appears to be the first actual judgment in the
several dozen cases involving allegations of impropriety in cases of Chinese
companies that went public in the US, a $77 million arbitration award was
granted to a plaintiff in an arbitration case in Hong Kong.
AIG CEO Hank Greenberg's C.V. Starr & Co. sued
the founding shareholders of China MediaExpress, which had gone public
through a reverse merger in the US. There is also apparently a companion case
that Greenberg brought in the US as well, this one against the company itself.
So it is the founders that have to pay the arbitration judgment, not the
company. Greenberg has also sued Deloitte's Chinese affiliate which was the
auditor of CME.
The arbitrators in Hong Kong determined that CME
was a "fraudulent enterprise."
For additional insights on reverse mergers,
SPACs, other alternatives to traditional initial public offerings, the small
and microcap markets and the economy, visit the Reverse Merger and
SPAC Blog by David N. Feldman, Esq., Partner of Richardson &
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