Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


November 9, 2005.


The opinion of the court was delivered by: AMY ST. EVE, District Judge


Plaintiff Harry Edelson ("Edelson") brought suit against Defendants Chinadotcom Corporation ("CDC"), Raymond K.F. Ch'ien ("Ch'ien"), Peter Yip Hak Yung ("Yip"), and Asia Pacific Online Ltd. alleging that Defendants were liable under (1) Section 13(d) of the Securities Exchange Act and (2) a state law theory of tortious interference with a prospective economic advantage. The Court has dismissed all but Plaintiff's tortious interference claim against CDC. Edelson v. Ch'ien, No. 03 C 7320, 2004 WL 422674, *1 (N.D. Ill. Jan 28, 2004), aff'd 405 F.3d 620 (7th Cir. 2005); Edelson v. Ch'ien, 352 F. Supp. 2d 861 (N.D. Ill. 2005). Currently before the Court is CDC's motion for summary judgment (the "Motion") on that claim. For the reasons below, the Court grants CDC's Motion.


  I. Legal Standard

  Summary judgment is proper when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of material fact exists only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In determining whether a genuine issue of material fact exists, the Court must construe all facts in a light most favorable to the non-moving party and draw all reasonable and justifiable inferences in favor of that party. Id. at 255. The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552, 91 L. Ed.2d 265 (1986). The existence of a factual dispute is not sufficient to defeat a summary judgment motion, instead the non-moving party must present definite, competent evidence to rebut the summary judgment motion. Butts v. Aurora Health Care, Inc., 387 F.3d 921, 924 (7th Cir. 2004).

  When resolving summary judgment motions, a court may consider affidavits submitted by the parties, but "[s]upporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Fed.R.Civ.P. 56(e). "Thus, statements outside the affiant's personal knowledge or statements that are the result of speculation or conjecture or merely conclusory do not meet [the] requirement of [Rule 56(e)]." Stagman v. Ryan, 176 F.3d 986, 995 (7th Cir. 1999); Drake v. Minnesota Min. & Mfg. Co., 134 F.3d 878, 887 (7th Cir. 1998) ("[a]lthough `personal knowledge' may include inferences and opinions, those inferences must be substantiated by specific facts."). With these standards in mind, the Court turns to the merits of CDC's Motion. II. Facts

  A. The Parties

  Plaintiff Harry Edelson is a citizen of New Jersey and a former outside, independent non-management director of CDC. (R. 96-1, Def.'s Stmt. of Material Facts ("SMF") at ¶ 1.) Defendant CDC is a corporation formed and existing under the laws of the Cayman Islands, with its principal place of business in Hong Kong. (Id. at ¶ 2.) CDC is an integrated enterprise solutions company offering software services and outsourcing, technology, marketing and media services and content for companies and end users throughout greater China and the Asia-Pacific region, the United States, and the United Kingdom. (Id.)

  B. Edelson's Background and Experience

  Edelson has worked in the investment business for almost thirty five (35) years. (R. 115-1, Pl.'s Stmt. of Additional Material Facts ("SAMF") at ¶ 3.) At the onset of his career, Edelson worked as a research analyst in New York for several securities firms, including Prescott Ball & Turben, Merrill Lynch Pierce, Fenner & Smith, Drexel Burnham Lambert, and First Boston. (Id.) In 1984, Edelson founded Edelson Technology Partners ("ETP") and through that enterprise Edelson has formed and managed five prior investment funds — Edelson Technology Partners I-V (id. at ¶ 4) — that have invested in more than 80 companies in all areas of technology, including information technology, telecommunications, satellite and microwave communications, fiberoptics, genetic engineering, and industrial automation. (Id. at ¶ 8.) While at ETP, Edelson has devoted a substantial amount of his time to identifying prospective investors and raising money for these funds. (Id. at ¶ 6.) To that end, Edelson called on personal acquaintances and various corporations with which Edelson had contacts, and then explained to these prospective investors the strategy and objectives of each fund. (Id.) Investors in these funds consist mainly of major corporations such as AT&T, Viacom, 3M, Ford Motor Company, Cincinnati Bell, and Reed Elsevier, but also include a few partnerships, trusts, and private investors. (Id. at ¶ 5.) Under Edelson's management, the funds have returned gains of up to 28%. (Id. at ¶ 7.)

  C. Edelson's Association with CDC

  Edelson initially became aware of CDC through his acquaintance, Yip, the CEO of CDC (until 2004) and the current Vice Chairman of CDC's Board of Directors. (Id. at ¶ 12; R. 96-1, Def.'s SMF at ¶ 5.) In the mid to late 1990s, while Edelson was looking for investment opportunities for his venture capital fund, Yip approached him with the opportunity to invest in CDC. (R. 96-1, Def.'s SMF at ¶ 7.) At some point after his fund initially invested in CDC, Edelson joined CDC's board of directors. (Id. at ¶ 8.) As part of his compensation for serving on CDC's board of directors, Edelson personally acquired shares of CDC stock and stock options that he subsequently exercised, thereby acquiring additional shares of CDC stock. (Id.) In July 1999, CDC made an initial public offering (which dramatically increased the value of the ETP fund's investment in CDC), and as a result, CDC became a publicly-held company. (Id. at ¶ 9; R. 115-1, Pl.'s SAMF at ¶ 14.) After CDC went public the ETP fund distributed some, but not all, of CDC's stock to investors in the fund. (R. 96-1, Def.'s SMF at ¶ 9; R. 115-1, Pl.'s Resp. to Def.'s SMF at ¶ 9.)

  By Spring 2003, Edelson's relationship with CDC's management had soured. (R. 115-1, Pl.'s SAMF at ¶ 15.) Among other things, Edelson disagreed with Yip and Ch'ien regarding the advisability of CDC expanding a CDC stock buy-back program. (Id.) On April 16, 2003, Edelson sent an e-mail to Ch'ien and others stating that corporate governance at CDC was "falling to pieces," that "[t]he voices of independent directors are ignored or abused," and that Yip should be taken up on his offer to resign. (Id. at ¶ 15; R. 120-1, Decl. of Harry Edelson, Ex A.) Edelson's term as CDC director expired at CDC's 2003 Annual General Meeting (held on June 17, 2003), and, although a candidate, Edelson was not re-elected to the board. (R. 115-1, Pl.'s SAMF at ¶¶ 16, 19.)

  D. The Lawsuits and the Press Release

  On October 15, 2003, in the wake of his failed bid for re-election, Edelson filed this suit. On October 28, 2003, CDC filed suit against Edelson in the High Court of Hong Kong alleging that Edelson breached his fiduciary duties and violated CDC's insider trading policies. (Id. at ¶¶ 22, 24.)

  On the same day that it filed suit in Hong Kong, CDC informed the investing public of the existence of both complaints in a press release dated October 28, 2003 (the "Press Release") which states in pertinent part:
[CDC] recently filed a claim in the courts of Hong Kong against former board member, Harry Edelson and his affiliated fund seeking damages related to the alleged breach of fiduciary duties owed to the company and violations of the company's insider trading policy. The company also recently became aware that Mr. Edelson has filed an action against the company and certain board members and one shareholder alleging claims that related principally to his disagreement with the results of this year's annual shareholders meeting whereby he was not reelected by shareholders to the [CDC] board of directors.
(R. 96-1, Def.'s SMF at ¶ 13.) The Press Release also devoted three and one-half pages to third quarter results, highlights, and key operational developments. (Id.) The Press Release is still available on the internet through CDC's website and various other websites. (R. 115-1, Pl.'s SAMF at ¶¶ 49, 50.) After CDC issued the Press Release, Edelson amended his complaint to allege an additional ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.