COURT HOLDS ASIA-BASED PHARMA COMPANY CANNOT BE SUED IN NEW JERSEY DESPITE PRESENCE OF SUBSIDIARY

Posted by on Jan 11, 2017 in Direct Investment from China, Dispute Resolution |

An India-based pharmaceutical company, Dishman Pharmaceuticals and Chemicals, Inc. (“Dishman”), won a significant victory on December 29, 2016, when the Appellate Division of the New Jersey Superior Court held that Dishman could not be sued in state court even though one of its subsidiaries, Dishman USA, Inc., is located in New Jersey.

The litigation arose from the failed sale of a Chinese manufacturing facility owned by a Dishman subsidiary in China to FDASmart, Inc., a New York-based company. The Memorandum of Understanding (“MOU”) between Dishman and FDASmart provided that FDASmart would be paid certain consulting fees in connection with the transaction. It also stated that the deal was to governed by the laws of India, a non-disclosure agreement was to be signed in India, and fees were to be paid with applicable Indian taxes. When the deal fell through, FDASmart filed suit against Dishman and Dishman USA in the Law Division of the New Jersey Superior Court, alleging Dishman breached the MOU by failing to pay consulting fees to FDASmart.

After the Law Division initially found that it had general jurisdiction over the dispute due to the presence of Dishman’s subsidiary in New Jersey, the Appellate Division reversed, holding that Dishman lacked “continuous and systematic contacts” with New Jersey to justify it being “haled” into its courts. The Appellate Division refused to assert jurisdiction based solely on the technicality of ownership of the subsidiary by the parent company and held that FDASmart needed to demonstrate the “dominance” of Dishman USA by Dishman via other factors such as “common ownership, financial dependency, interference with a subsidiary’s selection of personnel, disregard of corporate formalities, and control over a subsidiary’s marketing and operational policies.” Since the evidence in the record showed Dishman USA operated independently of and was not financially dependent on Dishman, the Appellate Division determined that the New Jersey courts lacked general jurisdiction over Dishman and dismissed it as a defendant.

While this decision is generally favorable to foreign pharmaceutical companies with subsidiaries in New Jersey, it is a fact-specific outcome that may not be repeated in situations where parent-subsidiary operations are intertwined and subsidiaries are dependent on parent companies for decision-making and financial matters. Careful analysis and restructuring may be required to operate within the confines of the court’s decision and avoid imputation of liabilities upon the parent company.

Hill Wallack LLP represents over 20 companies in the life sciences sector, including biotechnology, therapeutic, diagnostic, pharmaceutical, biopharmaceutical, biomedical and biosynthesis companies. The firm assists these clients in connection with intellectual property, technology transfer, university spin-outs, venture capital and finance, employment, regulatory and mergers and acquisition issues.

This article is for informational purposes only and does not constitute legal advice or a legal opinion.

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中国对美国的直接投资总金额预计将超过去年

Posted by on May 31, 2016 in Direct Investment from China |

根据有关报道,中国2015年在美国的直接投资年达到150亿美元。根据2016年目前的情况,这个数字可能在2016年被刷新。美中关系全国委员会(National Committee on U.S.-China Relations)和Rhodium Group 4月12日最新发布的信息称,中国2016在美国的直接投资预计将达到300亿美元。
由于人民币贬值的预期,以及中国企业面临转型的压力,这两个因素将持续推动中国对美国的直接投资。根据新闻报道以及有关报告,2016年第一季度,中国企业在美国的投资实际完成的超过了50亿美元,还有已经公布但是还在协商过程中的收购兼并项目的总交易金额也超过了200亿美元。
房地产投资仍然是中国对外投资的热点,特别是纽约曼哈顿和周边地区。中国方面的资金在商业和住宅房地产的金额炒超过1100美元。这些资金主要流向人口密集的地区,主要包括纽约市、洛杉矶、旧金山、芝加哥、迈阿密、西雅图等城市。根据一些咨询机构的预测,外来资金对美国房地产的投资热情将持续蔓延,今年的投资金额也将会超过去年。

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新泽西连锁经营法“Franchise Practices Act”对连锁经营合同的适用

Posted by on Nov 17, 2015 in Direct Investment from China |

作者:赵鲲律师

很多个人和公司都想加盟连锁经营店,例如McDonald’s, Subway, Panda Express, Kung Fu Tea等等。新闻中也时常介绍我们华人加盟这些连锁经营店不失为谋生创业的一个好途径。最近,我有机会代理和帮助几个客户加盟不同的连锁品牌,希望在此和广大读者分享新泽西Franchise Practices Act保护加盟者的主要内容,以及对连锁经营合同的影响。

新泽西的立法部门认为连锁经营店的销售经营对本州的整体经济有重要的影响,涉及社会公共利益。因此,出于公共利益的角度,新泽西政府需要对连锁品牌的所有人和加盟者的权利和义务进行规范,平衡全国性和地区性的连锁品牌所有人和相对弱小的加盟者之间的议价能力。

新泽西连锁经营法适用满足以下六项要件的加盟关系:(1)有一个限期或者无限期的书面协议;(2)该协议允许一方通过授权使用一个商标;(3)通过租约的形式批发或零售商品或者提供服务;(4)要求加盟者在新泽西有一个实际经营地;(5)加盟店的年营业额在$35,000以上;(6)至少20%的年营业额源于该连锁品牌。

如果一个商业合同关系满足以上六个要件,那么该商业关系符合新泽西连锁经营法对连锁经营的定义。新泽西连锁经营法就适用该合同。该法对合同关系的几大重要影响如下:

一、连锁品牌的所有人不得无正当理由终止合同或者拒绝续签合同。换句话说,只要加盟者遵守连锁经营合同的主要条款,正常履行合同义务,那么加盟者可以无限期地续签连锁经营合同。

二、新泽西连锁经营法禁止连锁品牌的所有人对加盟者施加不合理的履约标准。法院还未通过具体案例对此作出解释,但是理论上该标准不能苛刻地以至于迫使加盟者终止合同。

三、对于加盟者出售和转让连锁店的生意,加盟者必须将购买者的姓名、地址、商业经验和财务信誉等信息书面通知连锁品牌的所有人。连锁品牌所有人则有60天的时间决定是否同意。新泽西连锁经营法规定,连锁品牌所有人只能因为和购买者的品德信誉、财务能力和商业经验相关的理由才能禁止加盟者转让。

四、连锁品牌所有人不得禁止加盟者自行联合起来成立组织,不得无正当理由禁止加盟者撤换管理层,以及不得在公司控制权未改变的情况下,禁止加盟者转让他的公司股份给公司的员工和加盟者的家庭成员。

最后,在适用法律和争议解决方面,无论双方在连锁经营合同中如何约定,新泽西连锁经营法规定所有涉及位于新泽西州内的连锁经营店的法律纠纷适用新泽西法律,并且授予新泽西法院管辖权。

希望加盟的一方在和连锁品牌所有人进行谈判时,一般处于弱势地位。新泽西连锁经营法以州法的形式,对弱者提供保护,平衡合同双方的议价地位。律师在对加盟者提供法律服务时也需要了解该法,充分保护加盟者的权益。笔者也希望有兴趣涉足连锁经营店的华人朋友了解该法,知道自己的合法权益,并能够在合同的谈判中获益。

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Hill Wallack Attorneys Attend Conference on RMB Internationalization

Posted by on Nov 3, 2015 in Uncategorized |

On October 8, 2015, Hill Wallack attorneys, Eric Abraham, Henry Chou and Kun Zhao, attended the “Conference on RMB Internalization, Opportunities and Challenges” at the Midtown Hilton in New York. See http://www.rucnaaa.org/Conference-on-RMB-Internationalization.

Hill Wallack was a co-sponsor of the event, which was attended by representatives of well-known international organizations, financial institutions, universities, think tanks and corporations. Our attorneys attended the conference and exchanged opinions with the panelists and attendees regarding RMB internationalization specifically their practical experience with the internalization of RMB by way of FDI in the U.S. The event was covered by members of the U.S. and Chinese media.

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Smithfield Shareholders Approve Shuanghui Takeover

Posted by on Sep 24, 2013 in Direct Investment from China |

By: Henry T. Chou, Esq.

On Tuesday, September 24, 2013, the shareholders of the U.S. pork giant Smithfield Foods voted by a margin of 96% to 4% to approve the acquisition of the company by Shuanghui International, a Chinese meat processing conglomerate.  The $7.1 billion deal, which includes $4.5 in cash and an assumption of $2.6 of Smithfield debt, represents the largest acquisition of a U.S. company by a Chinese company in history.

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