OPINION and ORDER

JOHN KEENAN, Senior District Judge

INTRODUCTION

Plaintiffs move pursuant to Fed.R.Civ.P. 41(a) (2) to dismiss the claims in their Second Amended Complaint (the "Complaint") against defendants Robert Everett Wolin ("Wolin"), Tom Ching-Yun Tung ("Tung") and John P. Takacs ("Takacs") without prejudice. Wolin has filed a cross-motion for sanctions. Plaintiffs and Wolin now have agreed to a dismissal with prejudice, which the Court ordered in a Memorandum Opinion dated February 1, 2005. Despite the dismissal, Wolin's sanctions motion remains alive. Tung and Takacs, who have not reached an agreement with Plaintiffs, ask the Court to convert Plaintiffs' Rule 41(a) (2) motion and dismiss the Complaint with prejudice.

Also before the Court are prior motions by Tung and Takacs to dismiss the claims against them. These remaining claims are fraud (Count I), RICO violations (Count III), breach of fiduciary duty (Count IV), aiding and abetting breach of fiduciary duty (Count V — Takacs only), conversion (Count VI — Tung only), negligence (Count VII), unjust enrichment (Count IX — Tung only), tortious interference with contract (Count X), injunctive relief (Count XI) and replevin (Count XII). Tung and Takacs seek dismissal of the Complaint on standing and forum non conveniens grounds, and dismissal of the RICO claim on Fed.R.Civ.P. 12(b) (6) grounds. Additionally, Tung moves for dismissal of all claims on personal jurisdiction grounds. Takacs moves for dismissal of the fraud and fiduciary duty claims on Fed.R.Civ.P. 9(b) grounds.

This Opinion and Order resolves all of the pending motions with the exception of Wolin's motion for sanctions. Decision on that motion remains reserved, and a separate opinion on that issue will be filed in the near future.

FACTUAL BACKGROUND

Plaintiff Pacific Electric Wire Cable Co., Ltd. ("PEWC") is a Taiwanese corporation headquartered in Taipei. (Compl. ¶ 14). PEWC has three subsidiaries of interest to this case. The first is plaintiff Asia Pacific Wire Cable Corp., Ltd. ("APWC"). APWC's shares are at the heart of this controversy. The second subsidiary is defendant Kinbong Holdings Limited ("Kinbong"), which borrowed $4.1 million from former defendant Set Top International, Inc. ("Set Top"). In return, Kinbong pledged its 3,097,436 shares of APWC as collateral (approximately 22.4% of the total APWC shares). The third subsidiary is non-party Pacific USA Holdings Corp. ("PUSA"). PUSA pledged 6,976,666 shares of APWC (approximately 50.44%) to former defendant Swiss Re Financial Corporation ("Swiss Re"), in exchange for a letter of credit. These shares also found their way to Set Top. These two transactions form the core of the instant dispute.

The leading role in the entire drama was played by defendant Tung. Tung was allegedly the President and Chairman of PEWC (Id. ¶ 35), but there is some dispute as to who was actually in charge. The power struggle at the top of PEWC is not relevant to the resolution of these motions. Tung also was the chairman of subsidiaries APWC and PUSA, and one of the two directors of subsidiary Kinbong. (Id.). Most importantly, Plaintiffs allege, upon information and belief, that Tung was either a beneficial owner of Set Top, or acted in concert with Set Top's principal shareholders (allegedly without the knowledge of PEWC's board). (See id. ¶ 37). This allegation places Tung on both sides of the transactions at issue.

According to the Complaint, PUSA owned approximately 53% of APWC shares. (Compl. ¶ 33). In September 2001, PEWC and Swiss Re entered into a Letter of Credit and Reimbursement Agreement ("LC Agreement") whereby Swiss Re issued a Letter of Credit in favor of Standard Chartered Bank ("Standard") for $124 million to satisfy credit and loan obligations of PUSA to PUSA's lenders. (Id. ¶¶ 44-45). In return, PUSA pledged Swiss Re a security interest in 6,976,666 shares of APWC (approximately 50.44% of the total). (Id. ¶ 46).

In December 2002, PUSA filed a voluntary Chapter 11 petition in the Bankruptcy Court for the Northern District of Texas. (Id. ¶ 47). Swiss Re paid to Standard $90.6 million under the Letter of Credit, thereby becoming the successor-in-interest to Standard and PUSA's other creditors. (Id. ¶ 48). Under the LC Agreement, PEWC and PUSA were now on the hook to Swiss Re. During the automatic stay of bankruptcy, PEWC, PUSA and Swiss Re entered into an agreement whereby Swiss Re agreed to reduce the amount of its secured claim in the bankruptcy proceedings and its secured interests in the APWC shares to $50 million. (Id. ¶¶ 51-53). After partial payment of the debt, PEWC and PUSA were required to pay Swiss Re $22.4 million before August 31, 2003, otherwise Swiss Re could foreclose on the APWC shares. (Id. ¶ 56). In September 2003, defendant Tung told the PEWC board that he had entered into an agreement with Swiss Re, on behalf of PEWC, whereby PEWC would pay $11.1 million immediately, and the remainder on November 30, 2003, in exchange for Swiss Re's agreement not to foreclose on the APWC shares. (Id. ¶ 59).

The Complaint alleges that Tung and others misappropriated PEWC funds to reduce PEWC's Swiss Re debt from $22.4 million to $11.1 million. (Id. ¶ 65). Plaintiffs claim that a representative from Swiss Re came several times to Taiwan to speak to PEWC about resolving the debt, but each time Tung told him that the board of directors was not free to meet with him. (Id. ¶ 60). Plaintiffs claim that Tung wanted Swiss Re to believe that PEWC was not interested in satisfying its debt obligation. (Id.). Tung and PUSA C.E.O. Takacs then "introduced" Set Top to Swiss Re as a party interested in buying PEWC's debt from Swiss Re and taking an assignment of Swiss Re's collateral interest in the 6,796,666 shares of APWC. (Id. ¶ 63).

At this point, Kinbong's involvement begins. Plaintiffs allege that Tung, acting on behalf of Kinbong, borrowed $4.1 million from Set Top to be wire-transferred directly to Swiss Re in partial satisfaction of the $11.1 million debt. (Id. ¶¶ 66-73). The collateral for this loan was Kinbong's 3,097,436 shares of APWC (22.4%), and Kinbong was obliged to repay Set Top the entire $4.1 million by November 15, 2003. (Id. ¶¶ 67, 73). The loan agreement gave Set Top the right to dispose of the 22.4% of the APWC shares pledged by Kinbong, and the right of first refusal to purchase the 50.44% of the APWC shares pledged to Swiss Re for a price not exceeding $11 million. (Id. ¶ 75). Plaintiffs claim that the $11 million price was well below the $48 million net book value of these shares. (Id.).

Plaintiffs allege that at all times, Tung refused to provide copies of the Kinbong-Set Top agreements to the PEWC or APWC boards of directors. (Id. ¶ 71). Once Plaintiffs found these documents through counsel by the SEC's EDGAR system, they confronted Tung, who allegedly expressed surprise that Plaintiffs were able to get copies of the documents. (Id.).

On October 16, 2003, Swiss Re and Set Top entered into an assignment agreement whereby Set Top paid Swiss Re $11.5 million in exchange for Set Top's rights in the 50.44% of the APWC shares pledged by PUSA to Swiss Re. (Id. ¶ 82). Tung, purportedly on behalf of PEWC (but without knowledge or consent of the PEWC board), consented to this assignment by letter dated the same day. (Id. ¶ 83). Plaintiffs allege that Tung and PUSA C.E.O. Takacs never advised them of the nature of this transaction, even though their fiduciary duties required them to do so. (Id. ¶ 85). Plaintiffs claim that, once again, the first time they saw the Swiss Re-Set Top documents was through the SEC's EDGAR system. (Id. ¶ 86). They also contend that a Schedule 13D filed by Set Top on October 27, 2003 misstates the fraudulent purpose of the Swiss Re-Set Top transaction and fails to disclose that Set Top's principal shareholders work with Tung in other capacities. (Id. ¶¶ 110-18).

PEWC's counsel at this time was defendant Wolin, a partner in the Dallas office of Kirkpatrick Lockhart Nicholson Graham LLP. (See id. ¶¶ 24, 42). Plaintiffs allege that Wolin was copied on correspondence relating to the Swiss Re-Set Top assignment agreement. (Id. ¶ 87). Nevertheless, Plaintiffs say that Wolin failed to inform them of the transaction. (Id. ¶ 85). Plaintiffs also claim that no buy back agreement was executed with the assignment agreement, leaving PEWC's interests unprotected — for which they also blame Wolin. (Id. ¶ 89). At a November 2003 meeting, Wolin allegedly denied any knowledge of, and any involvement with, the Swiss Re-Set Top assignment agreement. (Id. ¶ 90).

As a result of the transactions described above, Set Top received 3,097,436 shares of APWC (22.4%) for $4.1 million, and 6,976,666 shares of APWC (50.44%) for $11.5 million. (Id. ¶ 91). On November 17, 2003, Set Top announced its intention to put up for "Public Sale" on December 9, 2003, the 6,976,666 shares of APWC that had been assigned by Swiss Re to Set Top. (Id. ¶ 92). Five days before the scheduled sale, Plaintiffs moved by Order to Show Cause for a temporary restraining order and preliminary injunction that would prevent the sale or transfer of any of the APWC shares in Set Top's hands. (Id. ¶ 94). On December 8, 2003, this Court issued the TRO ex parte. The Court subsequently dissolved the TRO and denied Plaintiffs' motion for a preliminary injunction in an Order filed December 30, 2003.Pac. Elec. Wire Cable Co. v. Set Top Int'l Inc., No. 03-9623 (JFK), 2003 WL 23095564 (S.D.N.Y. Dec. 30, 2003).

Set Top again announced a scheduled sale of the 6,976,666 APWC shares, causing Plaintiffs to file a renewed motion for a TRO. (Id. ¶¶ 97-98). The Court denied the motion by Order dated January 20, 2004. (Id. ¶ 99). Plaintiffs immediately filed a notice of appeal with the Second Circuit, which issued a temporary stay the next day. (Id. ¶¶ 100-01). On February 24, 2004, the Circuit denied PEWC's motion for an injunction pending appeal. (Pl. Mem. in Supp. of Mot. to Dismiss at 4).

While discovery progressed in 2004, the case began to shrink. By Stipulation and Order dated February 10, 2004, Plaintiffs withdrew all of their claims against Wolin except a malpractice claim. In March 2004, Plaintiffs dismissed their claim against one of Set Top's principal shareholders. (Tung Takacs Mem. in Opp. to Mot. to Dismiss at 4). Plaintiffs also dropped their claims against Swiss Re.

On July 2, 2004, PEWC, APWC and Set Top executed a settlement agreement. (De Palma Decl. ¶ 17). The parties amended the agreement on July 15, 2004. (Id. ¶ 18). On July 19, 2004, Mr. Belowich of Coudert Brothers (Plaintiffs' counsel) sent a letter to the Court stating that "a final settlement has not yet been reached." (his emphasis). (King Decl., Exh. 21 at 1). Mr. Belowich expressly stated in this letter that "assuming a final settlement is reached, Plaintiffs' claims against Tung, Takacs and Wolin will not be impacted" and that "regardless of whether a settlement is reached, Plaintiffs are fully prepared to complete all necessary depositions by the Court-ordered deadline of August 20, 2004." (Id., Exh. 21 at 2).

On July 20, 2004, PEWC, Set Top and four other defendants executed a stipulation, which this Court so-ordered on July 26, 2004. True to its word, PEWC continued to prosecute its claims against the remaining defendants: Wolin, Tung and Takacs. Three witnesses from Swiss Re were deposed in July and August 2004. (Tambe Decl. ¶ 8). Two Rule 30(b) (6) witnesses from PEWC and APWC were deposed in New York, along with a third witness from PEWC. (Id.). The parties also traveled to Dallas to take the depositions of Wolin and Takacs. (Id.). On September 15, 2004, pursuant to the Set Top settlement, PEWC regained control of the Asia Pacific shares. (Pl. Mem. in Supp. of Mot. to Dismiss at 2). On September 23, 2004, Plaintiffs informed Defendants that they intended to cancel the final round of depositions scheduled for late September and early October in Taiwan. (See Tambe Decl. ¶ 9-10). Plaintiffs filed the instant Rule 41 (a) (2) motion on October 1, 2004.

The parties agreed at oral argument on the Rule 41(a) (2) motion that Wolin would be dismissed with prejudice. No such agreement was reached with respect to Tung and Takacs. On February 1, 2005, the Court issued a Memorandum Opinion and Order dismissing Wolin with prejudice. Additionally, pursuant toGravatt v. Columbia Univ., 845 F.2d 54 (2d Cir. 1988), the Court gave Plaintiffs the opportunity to proceed with the case on the merits or face conversion of their motion to dismiss Tung and Takacs without prejudice to one with prejudice. Pac. Elec. Wire Cable Co. v. Set Top Int'l Inc., No. 03 Civ. 9623 (JFK), 2005 WL 236515 (S.D.N.Y. Feb. 1, 2005). Plaintiffs informed the Court by letter dated February 15, 2005 that they do not wish to withdraw the motion. Therefore, should the Court find that dismissal without prejudice is unwarranted, the Court is free to consider dismissal with prejudice.

DISCUSSION

I. PLAINTIFFS' RULE 41(a) (2) MOTION

A. Dismissal Without Prejudice

The Court first takes up Plaintiffs' motion to dismiss because a dismissal here moots the other pending motions except Wolin's sanctions motion. Rule 41(a) (2) permits Plaintiffs to seek an order of dismissal from the Court when the parties are unable to stipulate to a dismissal. Any dismissal ordered by the Court is "upon such terms and conditions as the court deems proper" and "[u]nless specified in the order . . . without prejudice." Fed.R.Civ.P. 41 (a) (2).

Dismissal under Rule 41 (a) (2) is appropriate only "if the defendant will not be prejudiced thereby." Wakefield v. N. Telecom, Inc., 769 F.2d 109, 114 (2d Cir. 1985). A five-factor test drives the analysis of whether dismissal without prejudice is appropriate: "[1] the plaintiff's diligence in bringing the motion; [2] any 'undue vexatiousness' on plaintiff's part; [3] the extent to which the suit has progressed, including the defendant's effort and expense in preparation for trial; [4] the duplicative expense of relitigation; and [5] the adequacy of plaintiff's explanation for the need to dismiss." Zagano v. Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990).

Beginning with the diligence factor, Plaintiffs contend that they brought the motion as soon as possible after achieving the fundamental goal of this litigation: the re-acquisition of the APWC shares from Set Top. In actuality, Plaintiffs settled with Set Top in July 2004. When Defendants caught wind of the settlement and requested an extension of the discovery deadlines, Plaintiffs' counsel sent a letter dated July 19, 2004, opposing the request and assuring the Court that a final settlement with Set Top would have no effect on the prosecution of claims against Tung, Takacs and Wolin. A stipulation of settlement was filed on July 20, 2004. As the summer wore on, further discovery took place and depositions in Taiwan were scheduled for September. Now, with the APWC shares back in hand (and the primary mission of the litigation accomplished), Plaintiffs abruptly attempt to pull the plug. Quite simply, it is too late. At this stage, a Rule 41 (a) (2) dismissal would prejudice Defendants, who were forced to continue defending this action after the Set Top settlement. The time to move for dismissal was in July and certainly before further discovery and depositions. A without-prejudice dismissal at that time would have allowed Plaintiffs to re-file against Tung, Takacs and Wolin if the Set Top settlement fell through.

The Court also finds some vexatiousness in Plaintiffs' prosecution of this case. As stated, Plaintiffs assured the Court, in no uncertain terms, that this case would continue. Now they have gone back on their word, calling their choice a "business decision." In addition, once they decided to move for dismissal, Plaintiffs unilaterally and abruptly canceled six depositions scheduled for Taiwan. These depositions were included in a schedule that was so-ordered by Magistrate Judge Peck on July 28, 2003. While the order provided that the schedule could "be changed by written signed agreement of counsel w/o need for court approval," the Magistrate surely did not permit one party to cancel depositions on slender notice without consulting the opposition or the Court. Plaintiffs imply that they did Defendants a favor by canceling the depositions before the trip to Taiwan and bringing on the dismissal motion. (Pl. Mem. in Further Supp. at 14). This argument is beside the point. As a general rule, it is good form for attorneys to contact the Court before disregarding one of its directives.

The third factor weighs toward Tung and Takacs for the reasons already discussed. This matter has been on the docket since December 2003, and the parties were only one-and-one-half weeks away from completing discovery when Plaintiffs brought on their Rule 41 (a) (2) motion. Although no trial date has been set, it would be prejudicial to Defendants for the Court to halt the proceedings just prior to the close of the discovery and the inevitable setting of a briefing schedule for summary judgment motions. After getting this far, Defendants are entitled to a final adjudication of this lawsuit, either at the summary judgment stage or at trial.

The fourth factor also leans in favor of Defendants. While "the prospect of starting litigation all over again does not constitute legal prejudice," D'Alto v. Dahon California, 100 F.3d 281, 283 (2d Cir. 1996), there is no reason at this point to keep the threat of litigation hanging over Defendants' heads. (See Pl. Mem. in Supp. of Mot. to Dismiss at 6 n. 4) ("Plaintiffs may decide in the future to proceed in other appropriate forums against both Tung and Takacs for additional claims. . . ."). Surely Defendants will face at least some duplicative expense if Plaintiffs decide to bring suit again in another jurisdiction or a foreign country. While some of the material discovered in this case might be usable, some might not. Plaintiffs pressed this matter ahead after settling with Set Top. It would be extremely prejudicial for the Court to saddle Defendants with the risk of duplicative expenses now that Plaintiffs wish to discontinue with the option of re-filing either in this jurisdiction or elsewhere.

Finally, the Court is not impressed with Plaintiffs' explanation for the dismissal. Plaintiffs claim that dismissal is a bona fide business decision brought on by the accomplishment of the primary goal of the litigation: re-acquisition of the APWC shares from Set Top. If that were true, Plaintiffs would not have assured everyone back in July that final settlement with Set Top had no effect on prosecution of the claims against Wolin, Tung and Takacs. Also, Plaintiffs would not be so vociferously opposed to dismissal of Tung and Takacs with prejudice now. Obviously, there are other goals to this litigation.

Plaintiffs' conduct of this case since the Set Top settlement in July 2004 reminds the Court of a line from Robert Bolt's A Man for All Seasons: "There's a man who raises the gale and won't come out of the harbor." The storm being up, the Court declines Plaintiffs' invitation to rebuke the wind. The motion for dismissal of Tung and Takacs without prejudice is denied.

B. Conversion to Dismissal with Prejudice

Defendants seek conversion of Plaintiffs' Rule 41(a) (2) motion for dismissal without prejudice to a dismissal with prejudice. The Second Circuit has held that district courts are authorized to make the conversion after notification to the plaintiff. Gravatt v. Columbia Univ., 845 F.2d 54, 56 (2d Cir. 1988). Pursuant to Defendants' request and Gravatt, the Court included in its February 1, 2005 Order a notice to Plaintiffs that a conversion of their motion was possible. The Court gave Plaintiffs the opportunity to withdraw the motion and proceed on the merits rather than risk a dismissal with prejudice, but Plaintiffs refused the offer. Accordingly, the Court considers whether dismissal with prejudice is warranted.

Tung and Takacs contend that the action should be dismissed with prejudice because Plaintiffs fail to meet the Zagano factors. (Tung Takacs Mem. in Opp. at 12). Defendants argue, additionally, that they will be prejudiced if they must defend the case all over again in a different forum. (Id. at 13). These arguments do not persuade the Court. If Plaintiffs fail to meet the Zagano factors, and Defendants will be prejudiced by re-commencement of the suit elsewhere, the Court will deny Plaintiffs' Rule 41(a) (2) motion for dismissal without prejudice and proceed with the case on the merits. Dismissal with prejudice, however, is an "extreme sanction" requiring something more. See Gravatt, 845 F.2d at 57. For instance, this remedy would be appropriate where the plaintiff violated a court order, refused to appear for a proceeding, or found himself completely unable to remedy a defect in his pleadings. Johnson v. City Univ. of N.Y., No. 00 Civ. 4964 (WK) (RLE), 2002 WL 1750841 at *4 (S.D.N.Y. July 24, 2002). Even though Plaintiffs' abrupt cancellation of the Taiwan depositions was a violation of a court order, the Court declines to impose a dismissal with prejudice on this basis alone.

The cases cited by Defendants provide little assistance. InZagano, the Second Circuit affirmed dismissal of the complaint with prejudice because the plaintiff refused to go to trial after the district court denied the plaintiff's Rule 41(a) (2) motion.Zagano, 900 F.2d at 15. A similar situation arose in Deere Co. v. MTD Holdings Inc., No. 00 Civ. 5936(LMM), 2004 WL 1432554 (S.D.N.Y. June 24, 2004). There the Court denied a motion to dismiss without prejudice and informed the plaintiff that it would dismiss the complaint with prejudice if plaintiff failed to notify the Court that it wished to pursue the remaining claims at trial. Id. at *3. In Galasso v. Eisman, Zucker, Klein Ruttenberg, 310 F. Supp. 2d 569 (S.D.N.Y. 2004), the Court denied a Rule 41(a) (2) motion to dismiss and granted the defendants' motion for summary judgment. This was not a "conversion" of the Rule 41(a) (2) motion at all. In Jewelers Vigilance Committee, Inc. v. Vitale Inc., No 90 Civ. 1476(MJL), 1997 WL 582823 (S.D.N.Y. Sept. 19, 1997), the plaintiff conceded that the action was moot and sought dismissal of claims without prejudice six years after the defendants had offered them the same relief. Holding that the plaintiff could not bring the case to trial in any forum, the Court dismissed with prejudice. Id. at *4. Finally, in Wakefield v. N. Telecom, Inc., 769 F.2d 109 (2d Cir. 1985), cited by Wolin, the Circuit affirmed a dismissal of a claim with prejudice when the plaintiff withdrew the claim after trial but before submission to the jury. Id. at 114-15.

The underlying theme in Zagano, Deere, Vitale andWakefield, the four true "conversion" cases, is that the plaintiff was unwilling, or unable, to submit the claims at issue to the factfinder. Dismissal with prejudice was the only prudent option for the district court. Here, Plaintiffs have not manifested anything resembling a complete unwillingness or inability to pursue their claims at trial. Tung and Takacs imply that Plaintiffs canceled the Taiwan depositions in order to stave off inevitable motions for summary judgment. (Tung Takacs Mem. in Opp. at 9). Even if this argument is correct, the Court sees no justification for a with-prejudice dismissal when depositions are nearly finished, and briefing on summary judgment motions could be completed in a few months. At that time, the Court will be in a far better position to assess whether Tung and Takacs are entitled to a final adjudication on the merits.

The Court therefore declines to dismiss Plaintiffs' remaining claims with prejudice under Rule 41(a) (2) and Gravatt. The case against Tung and Takacs will proceed on the merits.

II. STANDING (TUNG TAKACS)

Tung and Takacs assert that PEWC and APWC lack standing because they seek the return of stock owned by PUSA, a non-party. They argue that even if their conduct was wrongful, the loss of the PUSA and Kinbong-pledged stock caused injury to PUSA and Kinbong, not PEWC or APWC.

A parent corporation may not pierce the corporate veil in order to assert the claims of its subsidiary. Bross Utils. Serv. Corp. v. Aboubshait, 618 F. Supp. 1442, 1445 (S.D.N.Y. 1985). On the other hand, PEWC claims that it suffered injury because it lost control of 72.84% of APWC shares as a result of the PUSA and Kinbong transactions. APWC claims that it was the unwilling victim of a massive corporate takeover, which caused the company to lose control of its operations. These allegations of actual damage are sufficient to give PEWC and APWC standing to assert claims against Tung (PEWC's alleged President/Chairman and APWC's Chairman) and Takacs (PUSA's Chairman). See Shared Communications Servs., Inc. v. Goldenberg Rosenthal, LLP, No. 01 Civ. 9702 (RJH), 2004 WL 2609546 at *9 (S.D.N.Y. Nov. 16, 2004).(fn3)

III. PERSONAL JURISDICTION (TUNG)

A. New York CPLR Section 302

Tung moves for dismissal pursuant to Fed.R.Civ.P. 12(b) (2) on the grounds that he is not subject to personal jurisdiction in New York. Plaintiffs contend that Tung is subject to "long arm" jurisdiction under Section 302(a) of the New York CPLR. The Court agrees.

The plaintiff bears the burden of establishing the Court's personal jurisdiction over the defendant for the purposes of defeating a Rule 12(b) (2) motion. Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). In absence of an evidentiary hearing, "the plaintiff need make only a prima facie showing of jurisdiction through its own affidavits and supporting materials." Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981).

In a federal question case involving a defendant residing outside the forum state, the district court applies the personal jurisdiction rules of the state in which it sits unless the federal statute explicitly provides for nationwide service of process. PDK Labs., Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997). Under New York law, the Court may exercise personal jurisdiction over a non-domiciliary who "transacts any business within the state or contracts anywhere to supply goods or services in the state," if the claim arises from those transactions. N.Y. CPLR § 302 (a) (1). The Court of Appeals of New York has held that CPLR 302 (a) (1) "is a 'single act statute' and proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted." Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 522 N.E.2d 40, 527 N.Y.S.2d 195 (1988).

In support of his motion, Tung submitted a Declaration to the Court in which he stated that he "never visited the State of New York in connection with [his] duties as Chairman and Director of PEWC or APWC." (Tung Decl. ¶¶ 13-14). Tung made similar statements with respect to his duties as a director of PUSA and Kinbong. (Id. ¶¶ 16-17). Plaintiffs have submitted deposition transcripts tending to establish that Tung did visit New York on business for PEWC and PUSA. In particular, David Godfrey, one of Swiss Re's chief risk officers, testified that Tung attended meetings in New York with Takacs, Wolin and other Swiss Re representatives, and that these meetings concerned PEWC and PUSA. (Belowich Supp. Decl. Exh. D at 10-11, 27-28).

Godfrey's deposition provides a strong inference that Tung entered New York in April 2002 and conducted business pertaining to PEWC, PUSA and Swiss Re. These activities are obviously related to Plaintiffs' claims against Tung because the PUSA's pledge of shares to Swiss Re was one of the sparks that ignited this entire blaze in the first place. While it is true that this meeting took place before PUSA filed for bankruptcy (Ltr. from Jones Day to Court, dated July 29, 2004), the meeting took place after execution of the LC Agreement under which PUSA pledged the APWC shares to Swiss Re. Furthermore, Godfrey testified that he and Tung discussed Swiss Re's status (arising out of the LC Agreement) as PEWC and PUSA's largest creditor. (Belowich Supp. Decl. Exh. D. at 11-12). In addition, it appears from the deposition of Timothy Morris, who also worked for Swiss Re at the time in question, that another meeting involving at least Godfrey, Tung and Takacs took place in New York during the summer of 2002. (Id., Exh. C at 21-22). While there is clearly dispute over whether New York meetings took place, and exactly what occurred if they did, the Court construes the pleadings and affidavits in Plaintiffs' favor at this stage. PDK Labs., 103 F.3d at 1108.

In addition, there is another obvious New York connection. Set Top wired the $11.5 million that it paid for the APWC shares to Swiss Re bank accounts in New York. (Compl. ¶ 82, De Palma Decl., Exh. E). According to the Complaint, Plaintiffs believe that Tung either is a beneficial owner of Set Top or acted in concert with Set Top's major shareholders. (See Compl. ¶ 37). Herein lies one of the bases for the claims against Tung, whom Plaintiffs say "colluded" with the other defendants, including Set Top, to cause PEWC to lose the APWC shares. (Compl. ¶ 120).

Finally, the LC Agreement between PEWC and Swiss Re, which Tung executed on behalf of PEWC, contained a choice-of-law provision specifying New York law and a forum-selection clause stating that jurisdiction for claims arising out the agreement would lie in the Southern District of New York. (De Palma Aff., Exh. A § 8.09). Although not dispositive, choice-of-law clauses surely influence the Court's analysis of whether a foreign defendant transacted business in New York. Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 22-23 (2d Cir. 2004).

In light of the foregoing, Plaintiffs have made a prima facie showing of this Court's personal jurisdiction over Tung pursuant to CPLR 302 (a) (1).

B. Due Process

Next, the Court must determine whether its exercise of personal jurisdiction passes constitutional muster. In order to satisfy the Due Process Clause of the Fourteenth Amendment, the defendant must have "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945) (internal quotation marks omitted). The "relationship between the defendant, the forum, and the litigation" forms the basis for personal jurisdiction when the cause of action arises out of the defendant's forum contacts. Shaffer v. Heitner, 433 U.S. 186, 204, 97 S. Ct. 2569, 53 L. Ed. 2d 683 (1977).

To establish minimum contacts, Plaintiffs must show that their claims against Tung arise out of or relate to Tung's contacts with New York. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984). Plaintiffs also must show that Tung's "conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980). As often happens in personal jurisdiction disputes, the due process analysis is somewhat duplicative of the long-arm analysis. The Court has already explained that Plaintiffs have introduced evidence sufficient to establish that their claims against Tung are related to his contacts with New York. Furthermore, the presence of a New York choice-of-law clause and a Southern District of New York forum-selection clause in the LC Agreement precludes Tung from expressing any shock at being haled into a New York court.

The exercise of personal jurisdiction comports with "traditional notions of fair play and substantial justice" if it is "reasonable under the circumstances of the particular case." Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 568 (2d Cir. 1996). Once the plaintiff has established minimum contacts, the defendant must present "a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985). In determining reasonableness, the Court considers "the burden on the defendant, the interests of the forum State, and the plaintiff's interest in obtaining relief." Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113, 107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987). The Court also considers "the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies." Id.

Defendants contend that (1) Tung, a resident of Taiwan, faces substantial burdens in defending himself in New York; (2) New York has no interest in the litigation because Plaintiffs are not incorporated under New York law and do not have their headquarters in New York; (3) there is no allegation that it would be more burdensome for Plaintiffs to litigate this matter in another jurisdiction; (4) Plaintiffs cannot demonstrate that judicial economy will be served by litigating this action in New York; and (5) no fundamental substantive social policy is implicated in this litigation.

Defendants have not made the required "compelling" showing. The burden of defending a suit in New York obviously did not trouble Tung when he executed an agreement with Swiss Re that explicitly called for jurisdiction in this district. While it is true that Swiss Re is no longer a defendant in the case, Tung cannot be heard to complain now about the burdens of coming to New York. For much the same reason, New York has an interest in the outcome of this litigation. Further implicating New York's interest is Set Top's wiring of the $11.5 million to the Swiss Re bank accounts in New York (discussed supra on p. 21). New York also provides the best chance for Plaintiffs to obtain effective relief. With discovery nearly complete, there is no reason to force Plaintiffs to pick up and move elsewhere. The final two considerations, judicial economy and fundamental substantive social policy, pertain to the relationship between the states and are not implicated in cases involving jurisdiction over a foreign national. S.E.C. v. Roor, No. 99 Civ. 3372 (JSM), 1999 WL 553823 at *1 (S.D.N.Y. July 29, 1999) (Martin, J.).

Accordingly, the Court finds that its exercise of personal jurisdiction over Tung satisfied both New York's longarm statute and the Due Process Clause of the Constitution.

IV. FORUM NON CONVENIENS

Under the doctrine of forum non conveniens, the district court has broad discretion to decline to exercise jurisdiction authorized by the general venue statute, see In re Union Carbide Corp. Gas Plant Disaster, 634 F. Supp. 842, 845 (S.D.N.Y. 1986), where "dismissal would best serve the convenience of the parties and the ends of justice." Murray v. British Broadcasting Corp., 81 F.3d 287, 290 (2d Cir. 1996) (internal quotation marks omitted). Ordinarily, the Court "starts with a presumption in favor of the plaintiff's choice of forum."Peregrine Myanmar, Ltd. v. Segal, 89 F.3d 41, 46 (2d Cir. 1996). Where the plaintiff is "foreign," however, the plaintiff's choice of forum "deserves less deference." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256, 102 S. Ct. 252, 70 L. Ed. 2d 419 (1981). Plaintiffs here are considered "foreign" for the purposes of this motion because they are not residents of the forum state of New York.

A forum non conveniens motion requires a two-step analysis. The Court first determines whether there is an alternative forum that can adjudicate the action. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 506-07, 67 S. Ct. 839, 91 L. Ed. 1055 (1947). "The requirement of an alternative forum is ordinarily satisfied if the defendant is amenable to process in another jurisdiction, except in 'rare circumstances' when 'the remedy offered by the other forum is clearly unsatisfactory.'"Murray, 81 F.3d at 292 (quoting Piper, 454 U.S. at 254 n. 22).

If an adequate alternative forum exists, the Court then weighs public and private interest factors to determine which is the most convenient of the two alternative fora. Gilbert, 303 U.S. at 508. These factors are as follows: "(1) the ease of access to sources of proof; (2) the availability of compulsory process for attendance of willing witnesses; (3) the cost of obtaining attendance of willing witnesses; (4) practical problems involving the efficiency and expense of trial; (5) enforceability of judgments; (6) administrative difficulties flowing from court congestion; (7) imposing jury duty on citizens of the forum; (8) the local interest in having controversies decided at home; (9) the avoidance of unnecessary problems in the application of foreign law." Allstate Life Ins. Corp. v. Linter Group Ltd., 994 F.2d 996, 1001 (2d Cir. 1993) (citing Gilbert, 330 U.S. at 508-09). The first five factors are the "private" factors; the latter four are the "public" factors.

The Court finds that even if Taiwan were an appropriate alternative forum, the nine factors lean heavily toward the case remaining in this district. Despite extensive discovery, the parties have not informed the Court of translation difficulties with documents or any other problems concerning access to proof. Some witnesses will have to travel whether the trial is located in Taiwan or New York. As New York is a major travel hub serviced by two international airports, the most convenient result for everyone involved is to keep the trial here. New York does have some interest in this case, as explained above. Finally, there is no problem of the application of foreign law. While it is true that the Southern District of New York is a busy district, the Court sees no problem in allowing one more case to proceed when so many other factors favor trial in New York

The Court therefore concludes that a dismissal on the grounds of forum non conveniens is inappropriate.

V. RICO CLAIM (TUNG TAKACS)

Tung and Takacs move to dismiss the RICO claim against them under Rule 12(b) (6). On a Rule 12(b) (6) motion to dismiss for failure to state a claim, the Court's task is to assess the legal feasibility of the claim rather than to weigh the evidence that might be offered in support thereof. See, e.g., Geisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980). Accordingly, the Court accepts Plaintiffs' factual allegations as true and draws all reasonable inferences in Plaintiffs' favor. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). Therefore, Defendants' motion will be granted only if it appears beyond doubt that Plaintiffs can prove no set of facts in support of their claim would entitle them to relief. See Sweet v. Sheahan, 235 F.3d 80, 83 (2d Cir. 2000).

To make a prima facie RICO claim, the plaintiff must show: "(1) a violation of the RICO statute, 18 U.S.C. § 1962; (2) an injury to business or property; and (3) that the injury was caused by the violation of § 1962." Pinnacle Consultants, Ltd. v. Leucadia Nat'l Corp., 101 F.3d 900, 904 (2d Cir. 1996). Section 1962(c), the relevant section, makes it "unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering." 18 U.S.C. § 1962(c). Plaintiffs must establish the requirements of Section 1962(c) as to each individual defendant.DeFalco v. Bernas, 244 F.3d 286, 306 (2d Cir. 2001). Plaintiffs also claim a violation of Section 1962(d), which makes it "unlawful for any person to conspire to violate . . . subsection (c)." 18 U.S.C. § 1962(d).

A "'pattern of racketeering activity' requires at least two acts of racketeering activity," 18 U.S.C. § 1961(5), and a showing that each of the defendant's acts "amount to or pose a threat of continuing criminal activity." H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 239, 109 S. Ct. 2893, 106 L. Ed. 2d 195 (1989). "'Continuity' is both a closed- and open-ended concept, referring either to a closed period of repeated conduct, or to past conduct that by its nature projects into the future with a threat of repetition." Id. at 241.

In this case, the concern is open-ended continuity. (Tung Mem. in Supp. at 14; Pl. Mem. in Opp. to Tung Mot. at 20). Plaintiffs allege as follows:

Defendants engaged in multiple instances of mail and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343, including, upon information and belief, the use of U.S. and foreign mail services, interstate telephone and facsimile transmission lines and money wire service facilities as a way to obtain from Plaintiffs by false or fraudulent pretenses, presentations or promises for executing a scheme to defraud Plaintiffs. . . .

Each Defendant committed and, in some instances, aided and abetted the commission, of more than two predicate acts of mail fraud, wire fraud and/or violation of the U.S. securities laws within a three-year period. The predicate acts of each Defendant were related because they involved the same method of commission and they served the common purpose. The predicate acts of each Defendant revealed a threat of continuing criminal activity because Defendants routinely used interstate mail, facsimile and telephone in operating their business and in furthering their scheme to defraud Plaintiffs.

(Compl. ¶¶ 142-43). These allegations are extremely vague and hardly establish a prima facie case for individual violations of Section 1962 by Tung and Takacs. Plaintiffs' arguments in their briefs provide no additional assistance. They argue that Tung and the other defendants "continue to act in concert with one another to further dispose of the shares of APWC for their own benefit and to the detriment of Plaintiffs, thereby creating a threat that their fraudulent activities may recur in the future." (Pl. Mem. in Opp. to Tung Mot. at 21). Plaintiffs also contend that the Complaint "alleges a broader fraudulent scheme and an ongoing criminal investigation that involves public companies beyond just the Plaintiffs. This investigation, together with the facts set forth herein, gives rise to a continuing threat that supports a claim for damages against Set Top under the RICO statute." (Id.). Plaintiffs make similar arguments with respect to Takacs. (Pl. Mem. in Opp. to Takacs Mot. at 11-13). Time and events have overtaken Plaintiffs' arguments. Plaintiffs have settled with Set Top, and the APWC shares are now back in Plaintiffs' hands.

The Court is mindful of the view that "the civil provisions of [RICO] are the most misused statutes in the federal corpus of law" and that "courts must always be on the lookout for the putative RICO case that is really nothing more than a fraud case clothed in the Emperor's trendy garb." Goldfine v. Sichenza, 118 F. Supp. 2d 392, 394, 397 (S.D.N.Y. 2000) (McMahon, J.). Count III of the Complaint therefore is dismissed. Leave to replead the RICO claim is granted only because this dismissal is the first by the Court, and Fed.R.Civ.P. 15(a) specifies that leave to replead shall be "freely given." Plaintiffs should not expect the same treatment in the future if their next attempt is unsuccessful.

VI. FRAUD AND FIDUCIARY DUTY CLAIMS (TAKACS)

A. Count I: Fraud

Takacs moves to dismiss Count I of the Complaint (fraud) under Fed.R.Civ.P. 9(b). Under New York law, which the parties have agreed applies to this case, a plaintiff makes a prima facie fraud claim by alleging "representation of a material existing fact, falsity, scienter, deception and injury." Manning v. Utilities Mut. Ins. Co., 254 F.3d 387, 400 (2d Cir. 2001) (quoting N.Y. Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 318, 662 N.E.2d 763, 639 N.Y.S.2d 283 (1995)). To satisfy Rule 9(b)'s heightened pleading standard, the plaintiff must "specify the statements it claims were false or misleading, give particulars as to the respect in which plaintiff contends the statements were fraudulent, state when and where the statements were made, and identify those responsible for the statements."Suez Equity Investors, L.P. v. Toronto-Dominion Bank, 250 F.3d 87, 95 (2d Cir. 2001).

Takacs argues that Plaintiffs have not met the Rule 9(b) pleading standard. Plaintiffs' response to this argument is that the Complaint "describ[es] the overall fraudulent scheme in great detail." (Pl. Mem. in Opp. to Takacs Mot. at 2). Plaintiffs then contend that the Complaint "specifically alleges as follows" (Id. at 4-5):

Defendant Takacs is Chief Executive Officer of PUSA (Compl. ¶ 41).

Defendants Tung and Takacs . . . have acted and conspired with defendants . . . to engage in a series of transactions which have either been consciously hidden from or described in misleading terms to [Plaintiffs], the goals of which transactions have been to misappropriate and convert a combined 72.84% controlling interest in APWC . . . and, in the process, intentionally to deceive Plaintiffs as to the true nature of the underlying transactions and as to the real parties who stood to benefit unlawfully from said transactions. As a result of these transactions, PEWC's 72.84% controlling interest in the shares of APWC has been transferred to Set Top, in which, upon information and belief, all of Tung, Lien, Fu-Chuan Tsai, Fu-Nu Tsai, Hsu and Takacs . . . have an ownership or beneficial interest. (Compl. ¶ 5).

Upon information and belief, sometime prior to September 8, 2003, Tung [and] Takacs . . . devised a scheme whereby they would misappropriate the 6,976,666 Shares of APWC held by PUSA . . . as well as the shares of APWC held by Kinbong. . . . (Compl. ¶ 57).

In furtherance of the fraudulent scheme, Tung [and] Takacs . . ., conspiring with the other Tung Defendants, misused their positions of trust and breached their fiduciary duties to Plaintiffs, in entering into a series of agreements to gain the controlling interest of APWC for the benefit of the Tung Defendants. (Compl. ¶ 58).

Thereafter, in furtherance of the fraud, Tung and Takacs "introduced" Set Top to Swiss Re as a party interested in buying the debt of PEWC from Swiss Re and taking an assignment of the collateral interest in the 6,976,666 Shares of APWC. (Compl. ¶ 63).

Upon information and belief, Tung and Takacs assisted in negotiating and drafting the Assignment Agreement. . . . However, Tung [and] Takacs . . . never advised Plaintiffs of the nature of the transaction, although their fiduciary duties required them to do so. (Compl. ¶ 85).

These allegations are hardly specific enough to satisfy Rule 9(b) with respect to Takacs. One of the goals of Rule 9(b) is to provide the defendant with fair notice of the claim so that he may prepare his defense. DiVittorio v. Equidyne Extractive Indus., Inc., 822 F.2d 1242, 1247 (2d Cir. 1987). The Complaint gives Takacs no clue as to the statements he made that are allegedly false or misleading, the particular reasons they were false or misleading, or when and where he made the statements.

In addition, Plaintiffs may not base Rule 9(b) pleadings on "information and belief" except that "fraud allegations may be so alleged as to facts peculiarly within the opposing party's knowledge, in which event the allegations must be accompanied by a statement of the facts upon which the belief is based."DiVittorio, 822 F.2d at 1247. Other than their say-so that "much of the factual information relating to the defendants' fraudulent activity is in the exclusive possession of the defendants" (Pl. Mem. in Opp. to Takacs Mot. at 8), Plaintiffs fail to provide any statements of facts to buttress their allegations made upon on information and belief. Finally, Plaintiffs' lumping together of fraud allegations against the "Defendants" or the "Tung Defendants" (which includes Takacs) does not satisfy Rule 9(b). See Luce v. Edelstein, 802 F.2d 49, 54 (2d Cir. 1986).

The fraud claim in Count I is dismissed as to Takacs, but, as with the RICO claim, supra p. 31, the Court grants Plaintiffs leave to replead.

B. Counts IV and V (Fiduciary Duties)

Takacs contends that Count IV (breach of fiduciary duties) and Count V (aiding and abetting breach of fiduciary duties) of the Complaint also must be dismissed. He argues that the failure to satisfy Rule 9(b) carries over to these counts because they are premised, at least in part, on misappropriation and misrepresentation. (Takacs Mem. in Supp. at 7 n. 3).

The Court agrees. Both counts state that Defendants "breached their fiduciary duties to Plaintiffs by making material misrepresentations to Plaintiffs." (Compl. ¶ 151, 157). These claims sound in fraud and must meet the heightened pleading standard of Rule 9(b). See Rombach v. Chang, 355 F.3d 164, 171 (2d Cir. 2004) (holding that Securities Act claims sounding in fraud are subject to Rule 9(b)); OSRecovery, Inc. v. One Groupe Int'l, Inc., No. 02 Civ. 8993 (LAK), 2004 WL 238035 at *1 (S.D.N.Y. Feb. 9, 2004) (Kaplan, J.). Just as Plaintiffs failed to satisfy Rule 9(b) in Count I, they fail to satisfy the rule in Counts IV and V.

In addition, the Court notes that Count V does not even assert a claim for aiding and abetting a breach of fiduciary against Takacs, even though the heading of the Count includes Takacs's name. Count V claims that Tung and Takacs owed and breached their fiduciary duty to Plaintiffs (Id. ¶¶ 156-57), and that "Defendants Fu-Chuan Tsai, Fu-Nu Tsai, Hsu, Lien and Set Top aided and abetted the breach of fiduciary duty to Plaintiffs." (Id. ¶¶ 161).

As in the case of Count I, Counts IV and V of the Complaint fail to meet the heightened pleading standard of Rule 9(b). These Counts are dismissed as to Takacs with leave to replead.

CONCLUSION

Plaintiffs' motion for dismissal without prejudice under Rule 41(a)(2) is denied. Defendants' motion to dismiss Count III of the Complaint is granted. Takacs's motion to dismiss Counts I, IV and V of the Complaint is granted. Plaintiffs are given leave to replead the dismissed Counts. All other motions are denied, with the exception of Wolin's sanctions motion, which remains pending.

Plaintiffs are directed to file an amended complaint no later than April 8, 2005. On the same day, the parties shall submit a final discovery schedule to Magistrate Judge Peck for approval. All remaining discovery, including the Taiwan depositions, shall be concluded by June 30, 2005. Once the discovery schedule is approved, no alterations of any kind will be permitted without consent of the Court. Counsel for the remaining parties shall appear for a conference on July 14, 2005 at 9:15 a.m. in Courtroom 20C, United States Court House, 500 Pearl Street, New York, New York.

SO ORDERED.