Use this button to switch between dark and light mode.

Experience a New Era in Legal Research with Free Access to Lexis+

TMT Procurement Corp. v. Vantage Drilling Co. (In re TMT Procurement Corp.)

TMT Procurement Corp. v. Vantage Drilling Co. (In re TMT Procurement Corp.)

United States Court of Appeals for the Fifth Circuit

September 3, 2014, Filed

No. 13-20622, Consolidated with No. 13-20715

Opinion

 [*515]  PER CURIAM:

Vantage Drilling Company ("Vantage") appeals three orders from the district court and two orders from the bankruptcy court. The orders were entered during the course of the Chapter 11 proceedings of twenty-one shipping companies. Their combined effect was to place certain shares of Vantage stock in custodia legis with the clerk of the court. Because we find that both courts below lacked subject-matter jurisdiction, we VACATE and REMAND.

In 2012, Vantage, an offshore drilling company, brought an action in Texas state court against Hsin-Chi Su, also known as Nobu Su, alleging breach of fiduciary duty, fraud, fraudulent inducement, negligent misrepresentation, and unjust enrichment (the "Vantage Litigation"). In its original petition, Vantage alleged that Su made material misrepresentations to induce Vantage to contract with companies controlled by Su for the acquisition of certain offshore drilling rigs and drillships. Vantage alleges that, in exchange, it issued approximately 100 million shares of Vantage stock to F3 Capital, an entity solely owned and wholly controlled by Su, and granted Su three seats on Vantage's board of directors, including a seat for himself. According [**3]  to Vantage, the subsequent disclosure of Su's misrepresentations placed Vantage in severe financial duress, threatening its ability to obtain necessary financing  [*516]  and its ability to perform on several critical contracts. Vantage alleges that Su leveraged Vantage's financial crisis to extract additional Vantage stock and other benefits. Among other relief, Vantage sought a "[j]udgment imposing a constructive trust upon all profits or benefits, direct or indirect, obtained by Su."

Su removed the Vantage Litigation pursuant to 28 U.S.C. § 1446 to the United States District Court for the Southern District of Texas, alleging diversity jurisdiction.1 Vantage moved to remand, which the district court denied.2 On appeal, this Court reversed and remanded the Vantage Litigation to the district court with instructions to remand the case to state court.3

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

764 F.3d 512 *; 2014 U.S. App. LEXIS 17088 **; Bankr. L. Rep. (CCH) P82,696; 59 Bankr. Ct. Dec. 267

In the Matter of: TMT PROCUREMENT CORPORATION; A WHALE CORPORATION; B WHALE CORPORATION; C WHALE CORPORATION; D WHALE CORPORATION; E WHALE CORPORATION; G WHALE CORPORATION; H WHALE CORPORATION; A DUCKLING CORPORATION; F ELEPHANT INCORPORATED; A LADYBUG CORPORATION; C LADYBUG CORPORATION; D LADYBUG CORPORATION; A HANDY CORPORATION; B HANDY CORPORATION; C HANDY CORPORATION; B MAX CORPORATION; NEW FLAGSHIP INVESTMENT COMPANY LIMITED; RORO LINE CORPORATION; UGLY DUCKLING HOLDING CORPORATION; GREAT ELEPHANT CORPORATION, Debtors;TMT PROCUREMENT CORPORATION; A WHALE CORPORATION; B WHALE CORPORATION; C WHALE CORPORATION; D WHALE CORPORATION; E WHALE CORPORATION; G WHALE CORPORATION; H WHALE CORPORATION; A DUCKLING CORPORATION; F ELEPHANT INCORPORATED; A LADYBUG CORPORATION; C LADYBUG CORPORATION; D LADYBUG CORPORATION; A HANDY CORPORATION; B HANDY CORPORATION; C HANDY CORPORATION; B MAX CORPORATION; NEW FLAGSHIP INVESTMENT COMPANY LIMITED; RORO LINE CORPORATION; UGLY DUCKLING HOLDING CORPORATION; GREAT ELEPHANT CORPORATION, Appellees v. VANTAGE DRILLING COMPANY, Appellant

Prior History:  [**1] Appeals from the United States District Court for the Southern District of Texas and the United States Bankruptcy Court for the Southern District of Texas.

In re TMT Procurement Corp., 2014 Bankr. LEXIS 1684 (Bankr. S.D. Tex., Apr. 16, 2014)

CORE TERMS

Shares, bankruptcy court, district court, Lender, orders, property of the estate, good faith, stock, proceedings, deposited, adverse claim, Escrow, collateral, rights, moot, authorization, custodia legis, subject-matter, purchaser, shipping company, Interim, asserts, clerk of the court, provisions, financing, entity, notice, commencement of the case, constructive trust, million shares

Bankruptcy Law, Judicial Review, Standards of Review, Clear Error Review, De Novo Standard of Review, Administrative Powers, Estate Property Lease, Sale & Use, General Overview, Civil Procedure, Justiciability, Mootness, Bankruptcy, Postpetition Credit, Stays of Judgments, Appellate Stays, Ordinary Course of Business, Use of Estate Property, Sale of Estate Property, Subject Matter Jurisdiction, Jurisdiction Over Actions, Lease of Estate Property, Procedural Matters, Bankruptcy Appeals Procedures, Appeals, Reviewability of Lower Court Decisions, Preservation for Review, Evidence, Burdens of Proof, Allocation, Claims, Types of Claims, Definitions, Preliminary Considerations, Jurisdiction, Core Proceedings, Federal District Courts, Noncore Proceedings, Estate Property, Contents of Estate, Federal & State Interrelationships, Erie Doctrine