Watson v. Riptide Worldwide

U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Business Law

New York Law Journal

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Judge Paul Crotty

After Riptide Worldwide (Riptide) acquired Riptide Software, Loeffel became Riptide's president. Vitetta was Riptide's executive vice president. Connelly its chief financial officer. Watson owned Bravera. His amended complaint, arising from Bravera's acquisition, included claims for negligent misrepresentation against Connelly and Vitetta (Counts III and VIII) and fraudulent conveyance against Loeffel under New York Debtor and Creditor Law §276 (Count XVIII). In addition to Count III, the court dismissed Watson's negligent misrepresentation claims against Connelly to the extent they were based on an April 2007 merger pact. In dismissing the claims against Loeffel, the court noted Watson's failure to specify the defendants who executed the allegedly fraudulent transfers, the amount of those transfers, the mechanism by which funds were transferred, or the source of those funds. Watson's time as a corporate insider overlapped Loeffel's. Riptide Software and Bravera were "second stage targets," suggesting Riptide's acquisition of Riptide Software while pursuing and completing its merger with Bravera. Watson's complaint did not allege that the purportedly fraudulent conveyances to Loeffel occurred after Watson left Riptide.

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