# Petition for Writ of Certiorari — Radmore v. Aegis Communications Group, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2010
- **Citation:** 559 U.S. 940

## Text

me Court, U.S.
Supren ILE 5

09 748 ~~ DEC 22 2008

OFFICE OF THE CLERK

IN THE SUPREME COURT
OF THE UNITED STATES

DOCKET NO.

JAMES RADMORE
Petitioner

Vv.

AEGIS COMMUNICATIONS GROUP, INC.
Respondent

On Petition for Writ of Certiorari to the
Supreme Court of the United States

—

PETITION FOR WRIT OF CERTIORARI

JAMES R. RADMORE, ESQUIRE

LAW OFFICE OF JAMES R. RADMORE, PC
TWO PENN CENTER, SUITE 312

1500 JFK BOULEVARD

PHILADELPHIA, PA 19102

COUNSEL OF RECORD

(215) 568-9900

FAX (215) 568-4546

QUESTION PRESENTED FOR REVIEW

Section 253 of the Delaware General Corporation Law
allows a party with a ninety (90%) percent interest in
a corporation to acquire and “freeze-out” the interests
of the remaining shareholders without prior notice to
said minority shareholders. The question presented
is: Whether due process requires notice to minority
shareholders of an impending merger before the
merger takes place and the minority’s property rights
are affected?

(Answered in the negative by the Court below)

THE PARTIES TO THE PROCEEDING

James Radmore

Two Penn Center Plaza — Suite 300
1500 John F. Kennedy Blvd.
Philadelphia, PA 19102

Petitioner

Aegis Communications Group, Inc
8001 Bent Branch Drive

Irving TX 75063
Respondent
CORPORATE DISCLOSURE STATEMENT

Plaintiff is not a corporation

il

TABLE OF CONTENTS

Page
Questions Presented for Review ....................00000000+- i
The Parties to the Proceeding..................0....00...002- il
Corporate Disclosure Statement................c0ecceeeeees ll
ee ciinsiser dese sp vetntsstnaisciebeeeneoiioneen ili
ee Oe FD itis estcrsitnrcn dae vi
Citations to the Orders and Opinions Below ......... 1
Statement of Jurisdiction in this Court.................. 1

Constitutional Provisions and Statutes Involved ..2
Statement of the Case ................cccccccececseccccsceccsceeces 5

Basis for Federal Jurisdiction In the
Court of First Instance ............. 0.0.0 cccccccccccccccceccecceee 5

1. Procedural] Background.........................00000- 5

Fe a NE I iii sncsetetee en 6

THE REASONS RELIED ON FOR
ALLOWANCE OF THE WRIT

Section 253 of the Delaware General
Corporation Law allows a party with a
ninety (90%) interest in a corporation to
acquire and “freeze-out” the interests of the
remaining stockholders without prior notice
to said minority shareholders. Said statute is
violative due process clause of the Fourteenth
Amendment where minority shareholders
were not informed of an impending merger
before the merger took place and the minority’s
property rights were affected. Said statute
failed to meet the reasonable notice standard
of Mullane v. Central Hanover Bank & Trust
Co., 339 U.S. 306, 314, 70 S. Ct. 652, 94 L. Ed.
865 (1950), even though the requirements of

the statute were followed ............... 9
Se uaueadavaneaveansnemamiuneinwens 18
APPENDIX

The Order and Memorandum Opinion of the
United States District Court for the Eastern
District of Pennsylvania, Timothy J. Savage
entered December 4, 2008, granting the

FE OU BID c.scssdianedsscscetercintisvecccnnciion la

1V

The Judgment and Memorandum Opinion

of the United States Court of Appeals for the
Third Circuit, Sloviter, Fuentes and Smith,
Circuit Judges, entered September 24, 2009,
affirming the decision of the District Court. . .16a

T E A IT

Constitutional Provisions, Statutes and Rules:
Fourteenth Amendment of the Constitution.......... 2
Seventh Amendment of the Constitution................ 2
oe er ee, Ce REED... cc cndusdasawensusstesecseevees ]
Be I Oe IE sin sscic conponncnuseiiasnnnsnchavccaecbsanienin 15
Securities and Exchange Act, 15 U.S.C. §78)........ 15
OF Speke cies ee RD BD oi ccsevicccevecccnccccacsscvesessves 15
Re CN A, A Me I soc acacescsacnnesacsvavesonsnsonsvens 14

Del. Code Ann. Tit. 8 Section 258 (a)....... 3,9, 10, 15
Del. Code Ann. Tit. 8 Section 262 (d.................. 3, 11
Federal Rule of Civil Procedure 12 (b)..................... 2

Federal Rule of Civil Procedure 12 (b)(2) ........2, 3, 6

Federal Rule of Civil Procedure 12 (b)(6) ........ 2, 3,6

Cases

Berger v. Pubco Corp., 976 A.2d 132
REPRE SEE a RnR ae 16

CA, Inc, v. AFSCME Employees Pension Plan,
ae ee re Eo, is cnsndceansoseientasennsedecs 14

Glassman v Unocal Exploration Corporation,
vreau % ¢ |. 5. | Ss eet 10, 15

Grannis vy. Ordean, 234 U. S. 385, 394 (1914)....... 16

Green v Santa Fe 533 F.2d 1283, 1289 (2d Cir. 1976),
reu d on other grounds, 430 U.S. 462, 97 S.Ct.

1292, 51 L.Ed.2d 480 (1977) .......... 9, 10, 11, 13, 15, 16

Mennonite Board of Missions v. Adams,
462 U.S. 791, 103 S.Ct. 2706,

Fe ee He iiecastetenicineteinsinscscvmniotcnicensenits 14

Mullane v. Central Hanover Bank & Trust Co.
339 U.S. 306, 314, 70S. Ct. 652,
94 L. Ed. 865 (1950) ......ccccccccecseceseseeseeeeeees 9, 12, 13, 16

Santa Fe Industri Inc. v. Gr '
430 U.S. 462, 87 &. Ce. BGR C177) ....0.cccccccccccescccceess: 15

Tulsa Professional Collection Services, Inc.

v. Pope 485 U.S. 478, 484, 108 S.Ct. 1340 (1988).... 12

ARTICLES AND TREATISES

Holland, Randy J. Journal of Corporation Law,
Spring Edition, April 1, 2009 at p. 15-16. ............ 13

Holland, Randy J. The Delaware Constitution,
A Reference Guide, note 49, at 141

Vill

CITATIONS TO THE OFFICIAL AND
UNOFFICIAL REPORTS OF THE OPINIONS
AND ORDER ENTERED IN THE CASE

The Order and Opinion of the United States
District Court for the Eastern District Court for the
Eastern District of Pennsylvania entered December
4, 2008 was not reported and is set forth in the
Appendix at page la.

The Judgment and Memorandum Opinion of
the United States Court of Appeals for the Third
Circuit, Sloviter, Fuentes and Smith, Circuit
Judges, entered September 24, 2009, affirming the
judgment of the District Court was not reported.
The Judgment and Memorandum Opinion are set
forth in the Appendix at page 16a.

STATEMENT OF THE BASIS FOR
THE JURISDICTION IN THIS COURT

The Judgment sought to be reviewed was
entered by the Court of Appeals for the Third Circuit
on September 24, 2009.

The statutory provision believed to confer
jurisdiction on this Court to review on a writ of
certiorari the judgment of the Court of Appeals is 28
U.S.C. Section 1254(1).

CONSTITUTIONAL PROVISIONS AND
STATUTES INVOLVED

Section One of the Fourteenth Amendment
of the United States Constitution provides:

“No State shall make or enforce any law
which shall...deprive any person of life, liberty, or
property, without due process of law....”

The Seventh Amendment of the United
States Constitution provides:

In Suits at common law, where the value in
controversy shall exceed twenty dollars, the right of
trial by jury shall be preserved, and no fact tried by
a jury, shall be otherwise reexamined in any Court
of the United States, than according to the rules of
the common law.

Federal Rule of Civil Procedure 12 (b) provides
in pertinent part:

b) How Presented. Every defense,
in law or fact, to a claim for relief
in any pleading, whether a claim,
counterclaim, crossclaim, or third-
party claim, shall be asserted in the
responsive pleading thereto if one is
required, except that the following
defenses may at the option of the
pleader be made by motion:

2

(2) lack of personal jurisdiction;

(6) failure to state a claim upon which
relief can be granted

Del. Code Ann. Tit. 8 Section 253 (a) provides:

In any case in which at least 90% of the
outstanding shares of each class of the
stock of a corporation or corporations
is owned by another corporation
. the corporation having such stock
ownership may either merge the other
corporation or corporations into itself
and assume allofits ortheir obligations,
or merge itself, or itself and 1 or more
of such other corporations, into 1 of the
other corporations ...

Del. Code Ann. Tit. 8 Section 262 (d) provides:

If the merger or consolidation was
approved pursuant to ... § 253 of
this title, then either a constituent
corporation before the effective date
of the merger or consolidation or the
surviving or resulting corporation
within 10 days thereafter shall notify
each of the holders of any class or series

of stock of such constituent corporation
who are entitled to appraisal rights
of the approval of the merger or
consolidation and that appraisal rights
are available for any or all shares of
such class or series of stock of such
constituent corporation, and shall include
in such notice a copy of this section....

STATEMENT OF THE CASE

7 is for Federal Jurisdictio
in The Court of First Instance

The district court had jurisdiction pursuant to
diversity of citizenship, 28 U.S.C. § 1332 (a).

The Facts Material to Consideration
of the Questions Involved

1. Procedural Background

This matter was commenced by Petitioner, James
Radmore, against Aegis Communicaticns Group, Inc,
World Focus and Essar Investments. Aegis is part
of a multi-billion dollar conglomerate headquartered
in India. The action was also commenced against
members of the board of directors of defendant
corporations but said individuals were subsequently
dismissed from the case by Agreement. The matter
was commenced in the Court of Common Pleas of
Philadelphia County, Pennsylvania and removed
to the United States District Court for the Eastern
District of Pennsylvania.

The Complaint sought damages against
defendants arising from their alleged intentional
wrongful acts and breach of their fiduciary duties of
loyalty, duty of care and good faith to plaintiff and

others. The Complaint also alleged the transaction
lacked fair dealing and fair process. The matter
arose from the purchase by World Focus of 100
percent of the stock of Aegis Communications
Group for $0.05 per share. Pursuant to the terms
of the merger, World Focus converted Aegis, a
publicly traded Corporation, into a privately held
Corporation. Prior to the merger, World Focus
had diluted the value of the shares so that, at the
time of the merger, there were over a billion shares
of common stock outstanding. Petitioner asserted
the value per share was at least $1.05 per share and
sought damages to be compensated for the proper
market value of his investment.

Respondents filed a Motion to Dismiss
pursuant to Federal Rules of Civil Procedure 12 (b)
(6) and 12 (b) (2) and the “internal affairs doctrine”
of the Commonwealth of Pennsylvania. On or about
December 4, 2008, Judge Savage entered an Order
granting Motions to Dismiss and dismissing the
action as to all defendants. On September 24, 2009,
the Third Circuit affirmed. In the relevant part,
the Court ruled Petitioner did not need to receive
notice.

2. The Material Facts

Petitioner was at all relevant times a minority
shareholder of Aegis Communications Group,
Inc. The matter arose from a short form merger
pursuant to the Delaware General Corporation law.
In the transaction, World Focus converted Aegis, a

publicly traded Corporation, into a privately held
Corporation. Prior to the merger, World Focus
had diluted the value of the shares so that, at the
time of the merger, there were over a billion shares
of common stock outstanding. Of those shares,
over ninety (90%) percent were held by World
Focus and the balance was held by minority public
shareholders. The number of outstanding shares
was increased tenfold prior to the completion of the
shortform merger thereby further diluting the share
value. Pursuant to the Schedule 13E-3 filing of Aegis
with the Securities and Exchange Commission, only
the holders of the stock of World Focus would have
the opportunity to participate in the future earnings
and growth, if any, of Aegis.

Despite Petitioner holding significant shares
in Aegis, he was unable to object to the short-form
merger pursuant to statute. His interest was
directly affected and the value of his investment
reduced to virtually nothing. Petitioner learned of
this transaction through other sources and a dissent
was therefore filed on his behalf.

The Notice sent to Petitioner’s agent advised
that on November 3, 2006 “ACG Acquisition, Inc.,
a Delaware Corporation (“ACG”), was merged (the
“Merger”) with and into Aegis Communications
Group, Inc., a Delaware corporation (the “Company”)
with the Company continuing as the surviving
corporation (the “Surviving Corporation”).” It was
the merger of the “Surviving Company’, Aegis, into

World Focus, which was the subject of this lawsuit.

The conduct of respondents herein as
delineated in the Complaint constituted a series of
fraudulent acts and petitioner was deprived of his
rights by said fraudulent acts and the breach of
fiduciary duty of Respondent. The statute which
permitted the shortform merger to be consummated
violated the requirement of fair notice under the due
process clause of the Fourteenth Amendment of the
U.S. Constitution.

THE REASONS RELIED ON FOR THE
ALLOWANCE OF THE WRIT

Section 2530fthe DelawareGeneralCorporation
Law allows a party with a ninety percent
(90%) interest in a corporation to acquire and
“freeze-out” the interests of the remaining
stockholders without prior notice to said
minority shareholders. Said statute is violative
of the due process clause of the Fourteenth
Amendment where minority shareholders
were not informed of an impending merger
before the merger took place and the minority’s
property rights were affected. Said statute
failed to meet the reasonable notice standard
of Mullane v, Central Hanover Bank & Trust
Co., 339 U.S. 306, 314, 70 S. Ct. 652, 94 L. Ed. 865
(1950), even though the requirements of the
statute were followed.

Delaware’s short form merger law, Del, Code
Ann. Tit. 8 § 253 (a), has been the subject of much
litigation over the years. In none of these cases
has the failure of the Act to meet the fair notice
requirements of the Fourteenth Amendment of the
U.S. Constitution been the basis for the decision of
the Court.

The very purpose of the Act is to facilitate the
squeezing out of minority shareholders. See Green

v_ Santa Fe 533 F.2d 1283, 1289 (2d Cir. 1976),
reud on other grounds, 430 U.S. 462, 97 S.Ct. 1292,
51 L.Ed.2d 480 (1977). In Glassman v Unocal

Exploration Corporation, 777 A 2d 242 (Del
2001), the Supreme Court of Delaware noted at p.

247 that:

The problem is that §253 authorizes a
summary procedure that is inconsistent
with any reasonable notion of fair
dealing. In a short-form merger, there
is no agreement of merger negotiated by
twocompanies; there is only a unilateral
act — a decision by the parent company
that its 90% owned subsidiary shall
no longer exist as a separate entity.
The minority stockholders receive no
advance notice of the merger; their
directors do not consider or approve it;
and there is no vote. Those who object
are given the right to obtain fair value
for their shares through appraisal.

The Court in Glassman held at p. 248 that
absent fraud or illegality, appraisal was the exclusive
remedy available to a minority stockholder who
objects to a short-form merger.

Petitioner asserts that the short-form merger
law can be, as it was in this case, a blueprint to
defraud minority shareholders. The second circuit in
Green described the purpose of the Act as follows:

10

The salient feature of this short-
form merger was that a majority of 90%
of the shareholders could eliminate the
10% minority without any vote of the
shareholders, without prior notice to
the minority shareholders, without any
statement of corporate purpose and by
fixing an amount to be paid per share
to the minority shareholders, who were
given the option of selling their shares
at the stipulated price or demanding
an appraisal under the auspices of the
Delaware Court of Chancery, pursuant
to the terms of Section 262 of the
Delaware Corporation Law. We are
told that the avowed purpose of these
laws was to wipe out the minority. The
Delaware courts have held that the sole
remedy of the minority shareholders is
to demand the appraisal and be paid
the amount per share fixed by the
appraisal. No opportunity is afforded
the minority shareholder in advance
of the date when the merger becomes
effective to apply to any court for
injunctive relief to stop the merger, nor
is there any provision for rescission or
other relief. Green, supra, p. 1289

1]

Thus the Act as written permitted the majority
shareholders to follow the letter of the law and still
take the minority shareholders shares without due
process.

This Court has recognized in Mullane v.
Central Hanover Bank & Trust Co., 339 U.S.
306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950), that
a state action affecting property must generally
be accompanied by notification of that action: “An
elementary and fundamental requirement of due
process in any proceeding which is to be accorded
finality is notice reasonably calculated, under all the
circumstances, to apprise interested parties of the
pendency ofthe action and afford them an opportunity
to present their objections.” This Court has since
“adhered to these principles, balancing the “interest
of the State” and “the individual interest sought to
be protected by the Fourteenth Amendment.” Ibid.
The focus is on the reasonableness of the balance,
and, as Mullane itself made clear, whether a
particular method of notice is reasonable depends on
the particular circumstances. Tulsa Professional

Collection Services, Inc. v. Pope 485 U.S. 478,
484, 108 S.Ct. 1340 (1988).

There are essentially two parts to the
Delaware shortform merger process. Initially,
the parent corporation amasses ninety percent of
the outstanding stock and completes the merger
generally through the use of a shell corporation.
The minority shareholder receives no notice of this
proceeding and has no right to object. The “avowed

12

purpose” of the Act as noted by the Court in Green,
was to “wipe out the minority.” In the second part of
the process, the minority shareholder finally receives
notice of the merger and is given the opportunity to
file for an appraisal. Obviously, at this point in the
proceedings, the merger itself is a fait accompli. The
Court of Appeals sanctioned this procedure at p. 7
of its Opinion (Appendix, p. 25a). This is contrary
to this Court’s holding in Mullane, supra and its
progeny.

The record shows this is precisely what
occurred in this matter. The parent corporation
formed a shell corporation known as ACG Acquisition,
Inc. It was this shell corporation which was merged
into Aegis Communication Group, Inc. Petitioner
would obviously be unaware of the existence of ACG
Acquisition or the purpose for which it was formed.
In fact, the shell corporation was formed for the very
purpose of freezing out the interest of petitioner and
the other minority shareholders.

This law permitting the taking the property
of a minority shareholder without notice should be
reviewed by this Court as Delaware is the jurisdiction
which courts around the country look to for guidance
on corporate issues. As noted by Randy J. Holland

in an article in the Journal of Corporation Law,
Spring Edition, April 1, 2009 at p. 15:

13

The Delaware Constitution vests the
State’s Supreme Court with the power
to accept and decide certified questions
of law. Del. Const. art. IV, § 11(8)....

In 1983, the jurisdiction of the Supreme Court of
Delaware to answer certified questions of law from
the Delaware state trial courts was expanded to
include certifications from the United States District
Court for the District of Delaware. Ten years later,
the Delaware Constitution was amended to permit
the Delaware Supreme Court to hear and determine
certified questions from all federal courts, including
the United States Supreme Court, as well as from
the highest appellate court of any other state.

Randy J. Holland, The Delaware Constitution,
A Reference Guide, note 49, at 141. In 2007,

the Delaware Constitution was further amended
to authorize the SEC to certify questions of law to
the Delaware Supreme Court. Del. Const. art. IV, §
11(8).

The Securities and Exchange Commission
also has certified cases to the Delaware Supreme

Court beginning in 2008 in CA, Inc. vy. AFSCME

Employees Pension Plan, 953 A.2d 227 (Del.
2008). Thus, in addition to the due process issue

presented, this matter also presents an important
issue of federal law as the Federal Courts and SEC
look to Delaware for guidance.

In Mennonite Board of Missions v. Adams,
462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983),

14

this Court noted that “actual notice is a minimum
constitutional precondition to a proceeding which
will adversely affect the liberty or property interests
of any party, whether unlettered or well versed in
commercial practice, if its name and address are
reasonably ascertainable.” /d., at 800, 103 S. Ct., at
2712 (emphasis in original).

There is no question that the rights of
Petitioner as a minority stockholder were adversely
affected without notice. The parent corporation
had diluted the value of the shares so that, at the
time of the merger, there were over a billion shares
of common stock outstanding. Having used this
process to secure an interest of over ninety percent
(90%), respondent then completed the short-form
merger. Petitioner had no recourse and this was
all done without the knowledge of Petitioner. This
series of transactions designed to freeze-out minority
shareholders without notice was completely legal
under § 253.

It is clear that this procedure has troubled
the Courts. Both the Glassman and Green Courts
pointed out the purpose of the Act was to wipe out
the minority and there was no reasonable notion of
fair dealing. This Court in Santa Fe Industries,
Inc. v. Green, 430 U.S. 462, 97 S. Ct. 1292 (1977)
reversed the Court of Appeals and held a breach of
fiduciary duty by majority stockholders, without any
deception, misrepresentation, or nondislosure, did
not violate Rule 10b-5, 17 C.F.R. § 240 Rule 10b-5,
promulgated under the Securities and Exchange Act,

15

15 U.S.C. §78). Green had been brought under 10b-5
and the Court held Congress did not seek to regulate
transactions which constituted no more than internal
corporate mismanagement. The issue of reasonable
notice under the Fourteenth Amendment was not
decided or addressed in any way in Green.

The Supreme Court of Delaware has again
discussed the short-form merger procedure in Berger
v. Pubco Corp., 976 A.2d 132 (Del., 2009). There
the issue was the consequence of the controlling
stockholder’s failure to disclose the facts material
to an informed shareholder decision whether or not
to elect that exclusive remedy. The Court struggled
with the issue of the remedy if full disclosure was
not given pursuant to Section 253.

This Court clearly has concerns regarding the
short-form merger process having previously granted
certiorari in Green. As previously stated, the issue
there was whether the process violated 10b-5 in the
absence of deception or full disclosure. This Court
has traditionally been troubled by failure to give
reasonable notice and has stated “[t]he fundamental
requisite of due process of law is the opportunity
to be heard.” Grannis vy. Ordean, 234 U. S. 385,
394 (1914). This right to be heard has little reality
or worth unless one is informed that the matter
is pending and can choose for himself whether to
appear or default, acquiesce or contest.” Mullane,
supra, 339 US at p. 314.

16

The short-form merger process accomplishes
none of these notice requirements. Rather, at the
time a minority shareholder first learns ofthe merger,
it is a fait accompli. The minority shareholder is
powerless to stop it no matter how severely his
property rights have been violated.

The issues herein are important and relate to
significant issues worthy of this Court’s attention.
Petitione~ no longer is a stockholder in respondent
corporation and he has been deprived of this property
without reasonable notice. It is acknowledged the
purpose of the Delaware short-form merger statute
is to “freeze out” minority shareholders. Due process
requires a minority shareholder have the right to
object before the merger becomes final. This matter
therefore presents an important question of federal
law that should be settled by this Court.

17

CONCLUSION
WHEREFORE, Petitioner prays this Court
grant a Writ of Certiorari to the United States Court
of Appeals for the Third Circuit.

Respectfully submitted,

LAW OFFICKS oe R. RADMORE P.C.
Pia %

BY: JAMES R\RADMORE, ESQUIRE

Counsel of record

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF

PENNSYLVANIA
JAMES R. RADMORE : CIVIL ACTION
Vv.

AEGIS COMMUNICATIONS =:
GROUP, INC., et al. : NO. 08-1616

MEMORANDUM OPINION

Savage, J. December 4, 2008

In this action brought by a former shareholder
of a Delaware corporation alleging that the price
paid for the stock by the corporation that acquired
the company was far below the actual market value,
we must decide whether the Delaware short-form
merger statute, Del. Code Ann. tit. 8 § 253(a), limits
the minority shareholder’s remedy to an appraisal
action, which would preclude any other form of
challenge to the fairness of the merger. Before we
reach that issue, we must determine whether there
is personal jurisdiction over the two foreign corporate
defendants.

The plaintiff, James R. Radmore
(“Radmore”), a former minority shareholder of
Aegis Communications Group, Inc. (“Aegis”), seeks
compensatory damages for the difference between

la

the price he was paid and the alleged actual value
of his shares, as well as punitive damages. Among
those named as defendants are Aegis and Aegis’s
parent corporations, Essar Services (Mauritius)
(f.k.a. World Focus) (“World Focus”) and Essar
Investments Ltd. (“Essar”).! He alleges that the
defendants breached their fiduciary duties in the
execution of Aegis’s merger with World Focus.

After removing the state court action, the
defendants moved to dismiss it. Both World Focus
and Essar have raised lack of personal jurisdiction
pursuant to Fed. R. Civ. P. 12(b)(2). Additionally, the
three corporate defendants have moved to dismiss
for failure to state a claim upon which relief can be
granted because, under Delaware law, Radmore’s
sole remedy is an appraisal action in the Delaware
Court of Chancery. The defendants also contend that
the Pennsylvania internal affairs doctrine precludes
the court from exercising jurisdiction in order to
avoid interfering in the internal affairs of a foreign
corporation.

Because there is no personal jurisdiction over
World Focusand Essar, the motiontodismisspursuant
to Fed. R. Civ. P. 12(b)(2) will be granted as to those
two defendants. The action against the remaining

' Radmore had also named ten former and current members of Aegis’s
board of directors (“individual defendants’) At oral argument, Radmore
conceded lack of personal jurisdiction over the individual defendants. Tr
20:24 — 23:2 Oct. 14, 2008. He subsequently filed a Notice of Dismissal
concerning these individual defendants. See Notice of Dismissal (Dec.
No. 33), filed Oct. 31, 2008.

2a

defendant, Aegis, will be dismissed pursuant to Fed.
R. Civ. P. 12(b)(6) because Radmore’s sole remedy
is appraisal in Delaware state court. Finally,
Radmore’s motion to amend his complaint will be
denied because, based upon his representations
that the amendment would not change any factual
allegations in the complaint but only the name of
one defendant, his proposed amendment would be
futile.

Background and Procedural History

On November 3, 2006, World Focus, which
then held over 94% of Aegis’s voting stock, converted
Aegis, a Delaware corporation, into a privately held
corporation pursuant to a short-form merger under
Delaware law.? Compl. 44 2, 17, 19-20, 28. Aegis’s
minority shareholders were paid five cents per share.
Id. ¥ 33.

Radmore, a Pennsylvania resident, filed suit in
Pennsylvania state court, alleging that the price paid
to minority shareholders after the short-form merger
“was blatantly unfair and fraudulent and was grossly
inadequate compensation for the shares at issue.” Id.
4] 34. Heclaims that at the time of the merger, the real
market value was at least $1.05 per share. Id. 4 46.
He seeks compensatory damages for the difference

2 In pertinent part, Delaware law allows a corporation owning “at least
90% of the outstanding shares of each class of another corporation’s vot-
ing, stock to “merge the other corporation” into the stockholder corpora-
tion. Del. Code Ann. tit 8§ 253(a).

3a

in the alleged real value of his 1,065,500 shares and
what World Focus paid for them.

Personal Jurisdiction

World Focus and Essar, both foreign
corporations, contest personal jurisdiction. They
aver that they have no contacts, let alone minimal
ones, with Pennsylvania.

The defendants having challenged personal
jurisdiction, Radmore bears the burden of
demonstrating facts establishing a basis for the
exercise of jurisdiction. O’Connor v. Sandy Lane
Hotel Co., Lid., 496 F.3d 312, 316 (3d Cir. 2007);
Kehm Oil Co. v. Texaco, Inc., 537 F.3d 290, 300-01 (3d
Cir. 2008). Bald assertions and legal conclusions are
insufficient and Radmore must show the existence of
sufficient contacts between each defendant and the
forum. Kanter v. Barella, 489 F.3d 170 (3d Cir. 2007)
(quoting Evancho v. Fisher, 423 F.3d 347, 350 (8d
Cir. 2005)); see, e.g., Time Share Vacation Club v.
Atlantic Resorts, Ltd., 735 F.2d 61, 66 (3d Cir. 1984)
(rejecting plaintiffs “bald, self-serving statement”
concerning the defendants’ contacts with the forum).
Thus, to meet his burden, Radmore must present
“competent evidence” showing that each defendant
has therequisite minimal contacts with the forum
to warrant the exercise of personal jurisdiction over
each defendant. Miller Yacht Sales, Inc. v. Smith,
384 F.3d 93, 101 n.6 (3d Cir. 2004) (citing Patterson
v. FBI, 893 F.2d 595, 603-04 (3d Cir. 1990)); BP
Chems. Lid. v. Formosa Chem. & Fibre Corp., 229
F.3d 254, 259 (3d Cir. 2000).

4a

Radmore argues that Essar and World Focus
are subject to general jurisdiction in this forum.
Radmore has not asserted nor is there any basis for
specific jurisdiction, which arises when the cause of
action is related to or arises out of the non-resident
defendant’s contacts with the forum and the injury
is related to those contacts. General Electric Co. v.
Deutz A.G., 270 F.3d 144, 150 (8d Cir. 2001); Pinker
vu. Roche Holdings Ltd., 292 F.3d 361, 368 (8d Cir.
2002).

The focus of general jurisdiction is on the
relationship between the defendant and the forum
state, not on the relationship of the claims to the
forum. See Mesalic v.Fiberfloat Corp., 897 F.2d 696,
699 (3d Cir. 1990). General jurisdiction exists where
the nonresident has substantial, continuing and
systematic contacts with the forum. Provident Natl
Bank v. California Fed. Savs. & Loan Ass’n, 819
F.2d 434, 437 (8d Cir. 1987). Once these contacts are
established, the defendant can be answerable for any
claim even if thecause of action has no relationship
to the forum. Penzoil Prods. Co. v. Colelli Assocs.,
Inc., 149 F.3d 197, 200 (8d Cir. 2004). Thus, general
jurisdiction is not premised onconduct related to the
litigation, but on the defendant’s unrelated contacts
in the forum.

Sa

Radmore has presented no evidence that either
World Focus or Essar does business in or has any
contacts with Pennsylvania.’ Rather, he relies on
the parent-subsidiary relationship, arguing that
“[ajs Aegis is a wholly owned subsidiary, the parent
corporation, Essar, has clearly indicated it does
business in Pennsylvania” and “World Focus, by its
actions in taking majority ownership of Essar, also
subjected to the jurisdiction of the Commonwealth
of Pennsylvania.” Pl.’s Opp’n at 6. Even after
jurisdictional discovery, Radmore posits nothing
more than “World Focus is the parent of Essar, the
multi-nation conglomerate which has substantial
business interests in the United States including the
Commonwealth of Pennsylvania.” Pl.’s Supp. Mem.
at 5. He has proffered no specific evidence of these
alleged Pennsylvania interests. He cites contacts by
Aegis, which does not contest that it is registered
to do business in Pennsylvania, and, without any
evidentiary basis, argues that these contacts should
be imputed to Essar and World Focus, the parent
corporations. The fact that Aegis does business
within Pennsylvania “does not confer jurisdiction

* Essar is a privately held company formed and existing under
the laws of India, where it has its principal place of business.
World Focus is a privately held company established under the
laws of the Republic of Mauritius, where its principal place of
business is also located.

6a

over its nonresident parent, even if the parent is
the sole owner.” Kehm Oil, 537 F.3d at 301 (quoting
Escude Cruz v. Ortho Pharm. Corp., 619 F.2d 902,
905 (1st Cir. 1980)); cf. Keeton v. Hustler Magazine,
Inc., 465 U.S. 770, 781 n.13 (1984) (“jurisdiction over
a parent company [does not] automatically establish
jurisdiction over a wholly owned subsidiary.”).

As a general rule, a subsidiary’s contacts may
not be imputed to the parent. See Craig v. Lake
Asbestos of Quebec, Ltd., 843 F.2d 145, 150 (3d Cir.
1988). To warrant imputing the subsidiary’s contacts
for jurisdiction, the parent must control the business
operations and affairs of the subsidiary, effectively
making it the parent’s alter ego. Arch v. Am. Tobacco
Co., Inc., 984 F. Supp. 830, 836 (E.D. Pa. 1997).

Examining whether an alter ego relationship
exists requires a comprehensive evaluation of all
factors bearing on the intimacy of the relationship
between the parent and the subsidiary. It looks
to the legal relationship between the entities, the
parent’s ability to control and its actual exercise
of control over the subsidiary, the administrative
and organizational structures, the respective
performance of functions, and the public’s perception
of the companies. Simeone v. Bombardier-Rotax
GmbH, 360 F. Supp. 2D 665, 675 (E.D. Pa. 2005).

Radmore has failed to provide any evidentiary
basis for concluding that Aegis is the alter ego
of World Focus and Essar. He has not pleaded
or established any of the indicia of an alter ego
relationship. Accordingly, Essar and World Focus
will be dismissed for lack of personal jurisdiction.

7a

Failure to State a Claim

World Focus acquired Aegis as a wholly owned
subsidiary “through a short-form merger that was
not subject to fairness review” under § 253 of the
Delaware General Corporation Law. Compl. 4 28.
Section 253 provides that a company owning at least
90% of the voting stock of another corporation may
merge the subsidiary into itself without providing
notice of the merger to minority shareholders. Del.
Code Ann. tit. 8, § 253(a). The majority shareholder
need only notify the minority shareholders of their
right to seek an appraisal once the merger has taken
place. Id. § 253(d). Minority shareholders cannot
prevent the merger nor object to it. They can only
contest the valuation of the shares after the merger
and demand appraisal in the Delaware Court of
Chancery. Id.; Glassman v. Unocal Exploration
Corp., 777 A.2d 242, 248 (Del. 2001).

In a similar action brought by another Aegis
minority sharsholder, the Delaware Court of
Chancery dismissed the case, holding that “the
sole remedy to a minority shareholder challenging
a short-form merger is appraisal.” Matulich v.
Aegis Commc’ns Group, Inc., Civ. A. No. 2601-
CC, 2007 WL 1662667, at *9 (Del. Ch. May 31,
2007), affd on other grounds, 942 A.2d 596,
598 (Del. 2008)* (citing Glassman, 777 A.2d at

* Because the Matulich plaintiff did not appeal the Court of
Chancery’s holding that his sole remedy was appraisal if World
Focus had the authority to complete the short-form merger, the
Delaware Supreme Court did not reach this issue.

8a

248). The Matulich Court applied the rule that
absent fraud or illegality in a short-form merger, a
minority shareholder may not seek, as the plaintiff
does in this action, a fairness review.

Unlike the plaintiff in Matulich, Radmore
argues that he has alleged fraud. Pl.’s Opp’n at
3.5 However, he has failed to plead fraud with the
necessary particularity. At oral argument, to support
his claim of fraud, Radmore referred specifically
to three paragraphs of the complaint. Tr. 24:8-24.
These paragraphs state that the defendants (1)
“with malice and forethought increased the shares
of Aegis . . . for no purpose,” (2) the price per share
“was blatantly unfair and fraudulent and was
grossly inadequate,“ and (3) “[t]he transaction herein
lacked fair dealing and fair process.” Compl. {{
18, 34, 40.

Radmore’s allegations fall far short of that
required to allege fraud pursuant to Fed. R. Civ.
P. 9(b), especially given that the “bald assertions
or legal conclusions improperly alleged in the
complaint” need not be credited. In re Rockefeller
Ctr. Props., Inc. Sec. Litig., 311 F.8d 198, 216
(3d Cir. 2002) (citing In re Burlington Coat
Factory Sec. Litig., 114 F.3d 1410, 1429 (83d Cir.

> Radmore also claims to have alleged illegality. Pl.’s Opp’n at
3. Notably contrary to this assertion however, the complaint
does not reference any potentially illegal acts by any of the de-
fendants. Therefore, there is no cause to consider whether al-
legations of illegality would entitle the plaintiffs complaint to
a remedy other than appraisal.

9a

1997)). To comply with the requirements of Rule
9(b), a complaint must state “the date, place or time
of the fraud,” or otherwise inject “precisicn or some
measure of substantiation into [the] allegations
of fraud.” Lum v. Bank of Am., 361 F.3d 217, 224
(3d Cir. 2004) (quoting Seville Indus. Mach. Corp.
v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d
Cir. 1984)). Radmore has offered nothing more than
conclusory allegations, which will not suffice.

Furthermore, Radmore admitted at oral
argument that the only fraud about which he
complains is the dilution of the shares. Tr. 34:23-
35:13. Under Delaware law, a dispute as to share
value does not constitute fraud. Glassman, 777 A.2d
at 245 (citing Stauffer v. Standard Brands Inc., 187
A.2d 78, 80 (Del. 1962)).6 Indeed, the valuation of
shares is subject to an appraisal that is exclusively
within the purview of the Delaware Chancery
Court.

Radmore’s sole remedy in disputing Aegis’s
short-form merger is an action for appraisal in
Delaware state court. Thus, he has failed to state
a claim in this forum upon which relief can be
granted.

® Even though previously overruled, the Delaware Supreme
Court return(ed) to Stauffer in Glassman, thus resurrecting
the Stauffer decision as good law. Glassman, 777 A.2d at 248.

10a

Notice Required by Del. Code Ann. tit. 8 § 262(d)

At oral argument, Radmore, for the first time,
contested having received the requisite notice of
his appraisal rights. Tr. 37:13-41:21; 58:19-24; see
Del. Code Ann. Tit. 8 § 262(d).’ He conceded that
the notice requirement can be satisfied by notice to
the stockholder’s broker, and he admitted that he
did not “know whether [his] broker” received such
notice. Tr. 59:6-7. Rather, he argued that it was the
defendants’ “burden” to show that he received the
proper notice and that, unless they met this burden,
his remedy was not limited to appraisal. /d. 59:20-
60:12. He represented that he would not assert that
the required notice was not given if the defendant
had proof. Jd. 60:17-21 (“They don’t have a copy of a
notice that was sent to the broker. Let’s see it. They
can show it to me and I'll withdraw that argument.
I don’t see it here.”),

On October 23, 2008, the defendants
supplemented the record with the notice provided to
Radmore’s broker ofhis appraisal rightssubsequent to
theshort-form merger. SeeDefs.’Supp. Mem.ofLaw Re:
Notice at 4. This notice provided record shareholders

’ Radmore argued that he pleaded lack of notice in his com-
plaint. See Tr. 58:6-11. However, the complaint only alleges
that “(t]he minority shareholders including plaintiff were not
given any notice of the impending merger or any vote on the
merger prior to its consummation,” Compl. § 42. Such notice
is not required by § 262(d) for a § 253 short-form merger.

lla

with information concerning their right to appraisal
subsequent to the merger between Aegis, and ACG
Acquisition, Inc., a wholly-owned subsidiary of World
Focus.* Radmore did not argue that this notice was
deficient or untimely. Instead, shifting his argument
to avoid implication of judicial estoppel, he contends
that he was never a shareholder of ACG Acquisition
and that the notice produced by the defendants was
not related to the merger between Aegis and World
Focus. Pl.’s Reply at 1. He argues that it was the
merger of Aegis into World Focus, and not Aegis into
ACG Acquisition, that “is the subject of this lawsuit.”
Id.

Radmore’s latest argument is contradicted by
the facts. The Schedule 13E-3, filed withthe Securities
and Exchange Commission and citedin the complaint,
makes clear that the merger involved “Aegis
Communications Group, Inc. and ACG Acquisition,
Inc,” a“wholly-owned subsidiary of World Focus.”’ The
defendants have produced evidence, which Radmore

® An exhibit attached as Exhibit I to Radmore’s Memorandum
of Law on issue of Personal Jurisdiction (Doc. No. 15) and Ex-
hibit | to Radmore’s Motion to Amend/Correct Complaint (Doc.
No. 16) noted that ACG Acquisition was a special purpose ve-
hicle crested for the purpose of merging Aegis into a World Fo-
cus subsidiary.

° Because Radmore cites Schedule 13E-3 in his Complaint, it
may be considered for purposes of dismissing this action. See
Winer Family trust v. Queen, 503 F. 3d 319. 327 (3d Cir. 2007)
(when deciding a motion to dismiss, courts consider documents
incorporated into the complaint by reference).

12a

does not dispute, that he received the notice through
his broker. His attempt to avoid this undisputed
evidere by arguing that the notice applied to some
other merger is disingenuous.

Leave To Amend

Radmore has moved to amend his complaint to
“substitute Essar Global Limited as party defendant”
rather than Essar Investments. PI.’s Mot. 4 10. The
plaintiff, however, has failed to attach a proposed
amended complaint to his motion, which “is fatal to
a request for leave to amend.” Fletcher-Harlee Corp.
v. Pote Concrete Contractors, Inc., 482 F.3d 247,
252 (3d Cir. 2007). Normally, without the proposed
amended complaint, a court cannot “determine
whether amendment would be futile.” Jd.; see also
Kanter, 489 F.3d at 181 (stating the well-established
rule that motions to amend may be denied “where
pleading deficiencies would not [be] remedied by
proposed amendments’).

Nevertheless, at oral argument, Radmore
was given the opportunity to explain the scope of
his proposed amended complaint. He stated that
he seeks only to amend the caption and there is “no
change to the body of the Complaint itself.” Pl.’s
Reply at 1. Radmore has admitted that the proposed
complaint alleges no new facts nor any allegations
that would affect the jurisdictional inquiry. Tr.
8:4-21; 10:3-18. Rather, Radmore seeks to properly
designate the Essar defendant. Jd. 10:19-11:6.
No matter what name is ascribed to the Essar

l3a

defendant - Essar Investments Ltd. or Essar Global
Limited - there is no personal jurisdiction over that
defendant. Additionally, Radmore has not fleshed
out any claims of fraud. Accordingly, even absent
a copy of the proposed amended complaint, we can
determine that the proposed amendment would be
futile because it does not change anything in the
original complaint that would alter the disposition
of this motion.

CONCLUSION

There is no personal jurisdiction over World
Focus and Essar. As to the defendant Aegis, Radmore
has failed to state a claim upon which relief can be
granted. Therefore, the action will be dismissed.

l4a

IN THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF
PENNSYLVANIA

JAMES R. RADMORE : CIVIL ACTION
vi. )
AEGIS COMMUNICATIONS |
GROUP, INC., et al. : NO. 08-1616
ORDER

AND NOW, this 4th day of December, 2008,
upon consideration of the Defendants’ Motion to
Dismiss (Document No. 4), the plaintiffs response,
supplemental briefing, and after oral argument, it is
ORDERED that the motion is GRANTED and the
complaint is DISMISSED.

/s/ Timothy J. Savage
TIMOTHY J. SAVAGE, J.

15a

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 08-4751

JAMES RADMORE,
Appellant
Vv.
AEGIS COMMUNICATIONS GROUP, INC.,
ET AL.,
Appellees

On Appeal from the United States District Court

for the Eastern District of Pennsylvania
(D.C. No. 08-cv-01616)
District Judge: Honorable Timothy J. Savage

Submitted Under Third Circuit L.A.R. 34.1(a),
September 15, 2009
Before: SLOVITER, FUENTES, and SMITH,
Circuit Judges.
(Opinion Filed: September 24, 2009)

OPINION OF THE COURT
FUENTES, Circuit Judge:

Appellant James Radmore appeals the
District Court’s dismissal of his claim charging

l6a

Aegis Communications Group, Inc., (“Aegis”), Essar
Services (Mauritius) (f.k.a. World Focus), (“World
Focus”), and Essar Investments Ltd., (“Essar,”
collectively “appellees”), with breaches of their
fiduciary duties of loyalty, care and good faith in
connection with the 2006 short-form merger wherein
World Focus converted Aegis into a privately held
corporation. First, the District Court dismissed
Radmore’s claims against World Focus and Essar
pursuant to Fed. R. Civ. P. 12(b)(2), holding that
it lacked personal jurisdiction over these foreign
corporations. Second, the District Court dismissed
Radmore’s claims against Aegis pursuant to Fed. R.
Civ. P. 12(b)(6) for failure to state a claim upon which
relief could be granted because the court determined
that Radmore’s sole remedy was an appraisal action
in Delaware’s Court of Chancery. For the foregoing
reasons, we affirm the District Court’s judgment.

I.

The District Court had jurisdiction over this
case pursuant to 28 U.S.C. § 13832(a) and we have
jurisdiction to hear this appeal under 28 U.S.C. §
1291. We exercise plenary review of the District
Court’s order granting appellees’ motion to dismiss.
See Santiago v. GMAC Mortgage Group, Inc., 417
F.3d 384, 386 (3d Cir.2005).

17a

II.

Because we write primarily for the parties,
we discuss the facts only to the extent necessary for
resolution of the issues on appeal.

This suit stems from the 2006 short-form
merger, executed pursuant to Section 253 of
Delaware General Corporation Law, whereby
World Focus acquired Aegis’s outstanding minority
common stocks by merging World Focus’s wholly-
owned subsidiary ACG Acquisition into Aegis. As a
result, Aegis was converted into a privately owned
company. Radmore, a minority shareholder, held
1,065,500 shares at the time of the merger. Pursuant
to Section 262(d)(2) of Delaware General Corporation
Law, Computershare mailed a Notice of the short-
form merger via first class U.S. mail to all of Aegis’s
record holders of common stock. The document sent
to record holders was entitled “Notice of Merger
and Appraisal Rights.” The first page on this Notice
indicated Aegis’s minority shareholders were to be
paid five cents per share. Because Radmore was
a beneficial owner of the stock, Notice was sent to
Cede & Co., his broker and the holder of record.

Radmore commenced this’ action= in
Pennsylvania state court, accusing appellees of
breaching their fiduciary duties of care, loyalty and
good faith. He further contended that the merger
lacked fair dealing and fair process. Radmore
also stated that the five cent cash-out price was

18a

“blatantly unfair and fraudulent and_ grossly
inadequate compensation for the share’and a dollar
below market value. (App. 13). Appellees removed
the action to federal court and subsequently filed
a motion to dismiss the complaint, contending, in
relevant part, that: (1) the District Court lacked
personal jurisdiction over World Focus and Essar,
and (2) Radmore failed to state a claim because he
did not plead fraud with the 1 Aegis conceded the
District Court’s jurisdiction. 2 Essar Investments is
a privately held Indian company. It owns no shares
of World Focus. (App. 397). sufficient particularity
required by Fed. R. Civ. P. 9. !

The District Court granted appellee’s
motion to dismiss. Citing Provident Nat’] Bank v.
California Fed. Savs. & Loan Ass’n, 819 F.2d 434,
437 (3d Cir. 1987), the Court ruled that it lacked
general jurisdiction over foreign corporations
World Focus and Essar, because Radmore failed
to offer competent evidence demonstrating that
either corporation had “substantial, continuing and
systematic contacts with the forum.” (App. 201).
See also Reliance Steel Prods. Co. v. Watson, Ess,
Marshall & Engass, 675 F.2d 587, 588-89 (3d Cir.
1982). The District Court also rejected Radmore’s
argument that its personal jurisdiction over Aegis
could be imputed onto parent corporations World

' Aegis conceded the District Court’s jurisdiction

19a

Focus and Essar,” because he failed to demonstrate
the requisite alter ego relationship. Thus, the
District Court dismissed Radmore’s claims against
World Focus and Essar.

Next, the District Court granted Aegis’s Rule
12(b)(6) motion to dismiss for failure to state a
claim. Relying on Glassman v. Unocal Exploration
Corp., 777 A.2d 242, 248 (Del. 2001), the District
Court noted that Delaware’s short-form merger
statute permits a majority shareholder of at least
90% of another company’s voting stock to merge
that corporation into itself without providing notice
to the minority shareholders of the merger. See Del.
Code. a. Tit. 8 § 253(a). Absent fraud or illegality,
Delaware law proscribes a minority shareholder from
preventing a short-form merger. The shareholder
may, however, challenge the valuation of his or her
shares in Delaware Chancery Court via an appraisal
action. Despite Radmore’s protestations to the
contrary, the District Court held that his allegations
were bald and conclusory, falling “far short of that
required to allege fraud pursuant to Fed. R. Civ. P.
9(b).” (App. 204). Having failed to adequately plead
fraud or illegality, the District Court concluded that
appraisal rights were the exclusive remedy available
to Radmore.

2 Essar Investments is a privately held Indian company. It
owns no shares of World Focus. (App.397).

20a

Finally, the District Court rejected Radmore’s
assertion that notice was deficient because it related
to a merger between Aegis and ACG Acquisition, and
not a merger of Aegis into World Focus. The Court
reasoned that Radmore’s claim of inadequate notice
was “disingenuous” because the Schedule 13E-3,
filed with the Securities and Exchange Commission
and cited in his complaint, makes clear that the
merger involved ‘Aegis . . .and ACG Acquisition,
Inc.,’ a ‘wholly owned subsidiary of World Focus.”
(App. 207). Furthermore, The District Court noted
that Radmore did receive notice through his broker.
Therefore, The District Court granted Aegis’s motion
to dismiss.

Hil.

On appeal, Radmore argues that the
District Court erred because: (1) evidence revealed
“substantial and significant contacts [between
World Focus, Essar and] the Commonwealth of
Pennsylvania; (2) the complaint met Rule 9(b)’s
heightened pleading standard; and (3) Aegis’s notice
was deficient. We consider each argument in turn.

A. The District Court Properly Granted
‘or Lack of Jurisdicti

The District Court properly ruled that it lacked
personal jurisdiction over World Focus and Essar.
Radmore correctly notes that the focus of general
jurisdiction is on the defendant’s relationship with

2la

the forum state. See Mesalic v. Fiberfloat Corp., 897
F.2d 696, 699 (3d Cir. 1990). He continues to advance
his argument that jurisdiction can be conferred on
World Focus and Essar through their relationships
with Aegis. See Appellant’s Brief. at 20. Assuming,
ayguendo, that a district court could impute personal
jurisdiction to a parent through its subsidy because
the subsidy was the parent’s alter ego, Radmore has
failed to offer competent evidence demonstrating that
such a relationship existed between World Focus,
Essar and Aegis. The only specific piece of evidence
Radmore cites in support of his alter-ego theory is
an e-mail from Aegis employee and Pennsylvania
resident Daniel Mattson to Essar employee Sandip
Sen, wherein Mr. Mattson requested approval of an
expense voucher. See Appellant’s Brief at 20. This
lone piece of evidence certainly does not demonstrate
that Essar maintained continuous and substantial
contacts with Pennsyivania such that the District
Court had personal jurisdiction over appellees.

Finally, Radmore’s attempt to confer
personal jurisdiction through World Focus’s and
Essar’s relationships with Essar Global Ltd. and
Essar Group, see Appellant’s Brief at 20-24, also
fails because neither Essar Global Ltd. nor Essar
Group is a party to this action. Likewise, Radmore’s
reliance on the failed bid of Essar Steel to Purchase
Pennsylvania corporation Wheeling Pittsburgh
does not alter our analysis since he did not name

22a

Essar Steel as a defendant in this action.’ Therefore,
the District Court properly granted World Focus’s
and Essar’s motion to dismiss for lack of personal
jurisdiction.

B. The Court Properly Granted Aegis’s Motion
ismiss for Fai tate a Claim

Next, the District Court correctly concluded
that Radmore failed to plead fraud with the
necessary particularity required by Rule 9Q(b).
Indeed, the District Court properly characterized
Radmore’s allegations as bald assertions, conclusory
statements, and improper legal conclusions. See
Compl. at 4/4] 34, 40 (“Said price was .. . fraudulent.
..-The Transaction . .. lacked fair dealing and fair
process.”) (App.13-14). Furthermore, the District
Court correctly rejected Radmore’s only specific
allegation — that Aegis fraudulently increased shares
of Aegis in order to dilute minority shareholders’
interests — because a dispute over share value does
not taint a short-form merger such that appraisal
rights would no longer be a minority shareholder's
exclusive remedy . See Glassman, 777 A.2d at 245.

3 Likewise, Radmore’s reliance on the failed bid of Essar Steel

to Purchase Pennsylvania corporation Wheeling Pittsburgh
does not alter our analysis since he did not name Essar
Steel as a defendant in this action.

23a

Additionally, the “context” of the complaint
Radmore contends provides the particularity
required by Rule 9(b) demonstrates Appellant's
fundamental misunderstanding of Delaware’s short-
form merger statute. Radmore faults the legality of
the short-form merger because it was not subject
to fairness review and because Aegis did not send
out advance notice seeking minority shareholders’
approval of the merger. See Appellant’s Brief at 17.
In advancing these arguments, Radmore completely
ignores Glassman’s conclusion that “(bly enacting
a statute that authorizes the elimination of the
minority without notice, vote, or other traditional
indicia of procedural fairness, [Delaware] effectively
circumscribed the parent corporation’s obligations
to the minority in a short-form merger.” 777 A.2d
at 243. Aegis was under no legal obligation to seek
Radmore’s approval of the merger or afford him
advance notice of the transaction. Thus, Aegis’s
supposed inaction cannot serve as the basis for
pleading fraud or illegality such that appraisal rights
would not remain Radmore’s exclusive remedy.

Finally, the District Court correctly held that
Radmore had received proper notice of the short-
form merger. First, for the reasons noted above and
contrary to Radmore’s assertions in paragraphs 31
and 42 of his complaint, Aegis was under no legal
obligation to give minority shareholders advance
notice of the short-form merger. Second, the
District Court correctly held that Aegis complied
with 8 Del. C. § 262(d)(2), Delaware's appraisal
statute. Computershare timely mailed a Notice to

24a

Radmore’s broker. The Notice clearly set forth the
merger’s terms, including the corporations involved,
the purchase price of minority shareholder’s stock,
and Radmore’s right to seek appraisal. Radmore’s
reliance on Gilliand v. Motorola Inc., 859 A.2d 80
(Del. Ch. 2004), is misplaced because that case is
readily distinguishable. Unlike the deficient notice
in Gilliand, which only contained “the statutorily
mandated information about the mechanics of
perfecting a demand for appraisal and no other
information relating to the value of the merged
entity or its securities,” the Notice at bar contained
detailed disclosures. 859 A.2d at 82.

IV.
For the foregoing reasons, we affirm the
judgment of the District Court.

25a

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1400%3A1. Public record. Not legal advice.