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Wei v. Rocky Point International LLC

United States District Court, E.D. Wisconsin

January 6, 2017




         In this case, Plaintiffs, liquidators of Traxiar Drilling Partners II Pte., Ltd. (“Traxair”), assert several claims arising from allegedly fraudulent transfers of funds to Defendant Rocky Point International LLC (“Rocky Point”). Currently ripe for decision are Rocky Point's motion to dismiss for failure to join indispensable parties (Docket #12 at 1-2) and the motion to intervene by Treatmil Holdings, Ltd. (“Treatmil”), AMS Asia Pacific, Ltd., and Dag Dvergsten AS (collectively, the “Intervenors”) (Docket #14). For the reasons stated below, both motions will be denied.[1]

         1. BACKGROUND

         In its prior order on Plaintiffs' motion for preliminary injunction, the Court reviewed the complex series of events giving rise to this litigation. See Wei v. Rocky Point Int'l, LLC, Case No. 16-CV-1282-JPS, 2016 WL 7046802, at *1-2 (E.D. Wis. Dec. 2, 2016). To fully understand the relationships between the parties and the Intervenors, the Court must review those facts again in some detail.

         In late 2013, Symphony Ventures Pte. Ltd. (“Symphony”) entered into a loan agreement for $15 million with Traxiar in order to finance the down payment on the Somnath, an oil rig located in Qatar. The Intervenors are several entities which guaranteed or provided security for the loan agreement. Specifically, Treatmil allegedly owns Traxair and acted as guarantor for the loan agreement. AMS Asia Pacific, Ltd., which is also owned by Treatmil, pledged security for the loan through one of its subsidiaries, AMS Atlantic Marine Services Singapore Pte. Ltd. (“AMS Singapore”), in the form of a share charge to Symphony of one share in AMS Singapore. Finally, Dag Dvergsten AS, which owns 36.5% of Treatmil, pledged to Symphony over 730 of its Treatmil shares as security for the loan.

         Pursuant to the loan agreement, in December 2013, Symphony advanced $6 million of the $15 million loan to a bank account owned by Dag Dvergsten Pte., Ltd. (“DDPTE”). The transfer was not made directly to Traxair because the company did not have its own bank account. Once it did have an account, ostensibly DDPTE was supposed to transfer the $6 million to Traxiar.

         Plaintiffs allege that DDPTE did not follow through on its promise. Instead, DDPTE transferred $3.25 million of the $6 million to TY Global, LLC (“TY Global”), a company located in Houston, Texas. TY Global then transferred $2.25 million to AT Offshore, LLC (“AT Offshore”), another Houston company. AT Offshore transferred $2 million of that amount to Rocky Point. Plaintiffs believe that Dag Dvergsten, a Norwegian businessman who owns DDPTE and Rocky Point, masterminded this series of transfers in order to steal the $2 million transferred to Rocky Point. Rocky Point, on the other hand, asserts that the $3.25 million transferred to TY Global was payment for brokerage services. TY Global transferred some of that payment to AT Offshore, which then sent $2 million to Rocky Point. Rocky Point claims that it received the $2 million so that it could reinvest it for TY Global's benefit. Rocky Point allegedly used most of the funds to renovate a lake house in Pewaukee, Wisconsin.

         Eventually, Symphony accelerated the amounts due under the loan agreement because it believed that the Somnath was no longer for sale. Traxiar defaulted on the loan and was ordered into liquidation. Plaintiffs, acting as liquidators for Traxair, assert that they have recovered funds so that the balance due to Symphony from Traxiar is now just a little more than $4.3 million.

         In this action, Plaintiffs seek to recover Rocky Point's $2 million pursuant to the Wisconsin Uniform Fraudulent Transfers Act (“WUFTA”), which allows a creditor to recover transfers made either “[w]ith actual intent to hinder, delay or defraud any creditor” or “[w]ithout receiving a reasonably equivalent value in exchange for the transfer.” See Wis. Stat. § 242.04(1). Plaintiffs originally filed this action in the U.S. District Court for the Southern District of Texas, where TY Global and AT Offshore are located. However, the district court there dismissed Rocky Point for want of personal jurisdiction. Plaintiffs then filed the instant complaint in this Court.

         Rocky Point and the Intervenors take a far different view of the purpose of this litigation. The Intervenors believe that Plaintiffs are essentially acting as debt collectors for Symphony, which they allege is the only remaining creditor of Traxair. Orchestrating the whole affair is Symphony's principal, Michel Kurzer (“Kurzer”). The Intervenors allege a nefarious scheme by Kurzer to use the defaulted loan agreement to extract funds from various entities.[2]

         According to the Intervenors, the scheme began when Kurzer prematurely accelerated the amount due under the loan agreement based on the false premise that the Somnath was no longer available for purchase. Once the loan balance was accelerated, Kurzer forced the liquidation of Traxair. He then used Plaintiffs, Traxair's liquidators, to engage in litigation to collect amounts due under the agreement. Kurzer also allegedly used his positions of power within the Intervenors, which he gained by virtue of their share pledges, to drain funds from those entities for his own use. For instance, the Intervenors claim that Kurzer, who took over as sole director of AMS Singapore as a result of the share pledge, allowed one of his associates to extract $8.5 million from that company. The Court need not relate the full scope of Kurzer's campaign for purposes of deciding this motion. It is sufficient to state that the Liquidators believe Kurzer or the Plaintiffs have failed to fully credit the amounts they have collected, either through litigation or by draining the Intervenors from within, against the obligation due under the loan agreement, and have in fact managed to collect amounts in excess of that obligation, to the tune of $6.95 million. In the Liquidators' view, this action forms one more chapter in Kurzer's scheme.

         The Intervenors seek to assert several counterclaims against Plaintiffs, Symphony, and Kurzer based on the alleged overpayments they have received, including breaches of contract and fiduciary duty. Plaintiffs, Symphony, and Kurzer are all allegedly residents of Singapore. While they do not state their citizenship, the Court gathers that the Intervenors are all foreign entities.


         2.1 Required Joinder of ...

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