CDQ Obtains Dismissal Of Adversary Proceeding

In November 2018, the Arizona Court of Appeals affirmed a judgment in favor of CDQ’s client, a group of real estate investors, for over $72 million based upon defendants’ aiding and abetting breaches of fiduciary duty by the investors’ manager.  In January 2020, one defendant in that lawsuit filed a new action in Maricopa County Superior Court against CDQ’s clients seeking $300 million in damages and declaratory relief alleging that the original lawsuit was a malicious prosecution and clouded title to the 12,000 acres of property at issue in the long-running dispute.  As the new plaintiff was in the midst of bankruptcy proceedings, with CDQ’s client as the primary creditor, CDQ removed the action to the bankruptcy court.  CDQ’s team, led by Dan Dowd, Dan Durchslag, and Rebecca van Doren, then sought dismissal of the action of multiple grounds, including that it was precluded by the plaintiff’s failure to pursue the claims in the prior litigation and its failure to disclose them as a potential asset in the bankruptcy proceeding.  The bankruptcy court agreed, dismissed the lawsuit in its entirety, and awarded CDQ’s client the entirety of the fees it incurred in defending the action.