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Plaintiffs were investors in and a former
employee of Tradex, who claimed to be entitled to a
certain portion of Tradex’s assets. Defendants moved to
dismiss plaintiffs’ complaint and to vacate a
preliminary injunction which had frozen its accounts
with Bank of America.
Defendants first challenged personal
jurisdiction. Two of the individual defendants were
residents of Switzerland, upon whom proper service had
apparently not been made; the court therefore assumed
that it did not yet have jurisdiction over these
defendants. The court, however, also held that there was
sufficient time remaining under Rule 4(j) to perfect
service and to make the exercise of personal
jurisdiction possible. With respect to the company
itself, the court conceded that Tradex did not appear to
have been authorized to conduct business in the
Commonwealth. Nevertheless, “[w]hether authorized or
not, Tradex certainly was doing business in
Massachusetts.” Id. at *3. The Massachusetts
long-arm statute therefore |
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authorized the court to exercise
jurisdiction over the company.
Defendants also challenged the forum
selection, arguing that all investor clients had signed
agreements designating Zurich as the forum for resolving
all disputes. Even if such agreements had been signed,
Judge van Gestel concluded “that trial for these parties
in Switzerland will be so gravely difficult and
inconvenient that they will for all practical purposes
be deprived of their day in court.” Id. at *4.
The court therefore refused to enforce the forum
selection clause.
Finally, on the merits, the court held
that plaintiffs’ complaint sufficiently stated a cause
of action to survive dismissal. The court further held
that plaintiffs had demonstrated likelihood of success
on the merits and of irreparable harm in the absence of
injunctive relief. The court upheld the injunction, but
modified it to include only that portion of Tradex’s
assets that was necessary to protect the interests of
the parties.
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