Deutsche Bank AG v. Sebastian Holdings, Inc. v. Malone

Citations

• 346 Conn. 564

Syllabus

The plaintiff bank sought to enforce a foreign judgment that it had secured against the defendant S Co., a corporation organized under the laws of Turks and Caicos Islands. The foreign judgment resulted from an action previously brought by the plaintiff in England, in which the plaintiff recovered money owed in connection with an unpaid margin call on a foreign exchange portfolio of S Co., for which the plaintiff served as the primary broker. S Co.'s trading had been profitable between 2006 and the latter part of 2008, and, on October 7, 2008, a representative of the plaintiff informed the defendant V, S Co.'s sole shareholder and director, that S Co. held nearly $1 billion in its accounts. Nonetheless, as the financial and currency markets became increasingly volatile, S Co. faced hundreds of millions of dollars in losses. As a result, the plaintiff issued a series of margin calls on the portfolio. S Co. paid the first five margin calls in full from assets held at the plaintiff bank. The plaintiff's internal records showed, however, that the plaintiff had not properly valued and entered S Co.'s trades, which purportedly led to S Co.'s accounts being overvalued. Accordingly, on October 22, 2008, the plaintiff informed V of the computational errors, that S Co.'s accounts were in the red, and that it would seek a sixth margin call. S. Co. ultimately failed to pay the sixth margin call. Meanwhile, as a result of the plaintiff's representations regarding the value of S Co.'s accounts on October 7, and throughout that month, V caused S Co. to transfer a large portion of its assets to various entities associated with V in further- ance of V's plans to execute certain estate planning and to establish a trust for the benefit of his children. By the end of October, 2008, S Co.'s accounts with the plaintiff and other banks had been depleted, rendering S Co. effectively judgment proof. In 2013, the English court rendered judgment for the plaintiff and awarded it damages and in