United States District Court, D. Connecticut
SHANSHAN SHAO, HONGLIANG CHU, QIAN LIU, SONG LU, AND XINSHAN KANG, Plaintiffs,
BETA PHARMA, INC., AND DON ZHANG, Defendants.
ORDER ON DEFENDANTS' MOTION TO DISMISS PLAINTIFF
SONG LU'S CLAIMS IN PART
CHARLES S. HAIGHT, JR. Senior United States District Judge
oral argument on Defendants' Motion to Dismiss Plaintiff
Song Lu's Claims in Part [Doc. 168], this Order resolves
matter is a contract dispute between the five individual
Plaintiffs, investors in a "privately owned
organization" (Plaintiffs' phrase) under the laws of
the People's Republic of China called Zhejiang Beta
Pharma Co., Ltd. ("Zhejiang" or "ZBP").
ZBP is affiliated with the corporate Defendant in this case,
Beta Pharma, Inc. ("Beta" or "BP"). The
individual Defendant, Don Zhang, is alleged to be the
majority stockholder and president of BP, and the
vice-president and a director of ZBP. Plaintiffs assert
claims for breach of contract and tort against both
the Court's prior Omnibus Ruling [Doc. 163], which
resolved questions of subject matter jurisdiction and the
scope of discovery, Defendants filed both an Answer [Doc.
167] and the instant Motion to Dismiss Plaintiff Song
Lu's Claims in Part [Doc. 168]. Defendants argue that
Plaintiff Song Lu ("Lu, " or "Plaintiff) is
not entitled to bring claims for the full amount of stock he
purchased: "The problem for Lu is that his stock
purchase agreement states that four other people (the
'Other Purchasers') allegedly purchased portions of
the 105, 620 shares; Lu's portion was only 17, 735
shares. . . . [T]he Other Purchasers are necessary parties to
this lawsuit, and without them, Lu's claims are subject
to dismissal." PI. Br. 1.
Motion relies on the "Sub-Agreement and Memo"
("the Sub-Agreement") included on the final page of
the November 2010 Stock Purchase Agreement (" SPA")
signed by Don Zhang and Song Lu. The SPA amended and
superceded a prior purchase agreement between Lu and Zhang,
executed on March 16, 2010. The March agreement was for 90,
620 shares, for which Lu paid $312, 320 in U.S. currency. PI.
Br. 2. At the time of re-executing the purchase agreement,
via the November 2010 SPA, Plaintiff Lu increased his
purchase by an additional 15, 000 shares, for which he paid
150, 000 RMB in Chinese currency. Id. at 2-3. The
November 2010 SPA, unlike the March agreement, included
a" Sub-Agreement and Memo, " on a final page after
the signature block.
Sub-Agreement reads, in its entirety:
The total share of 1, 056, 200 of stock (representing 0.2331%
stock shares in the Company) at price often RMB per share is
purchased and owned by 1. Song Lu (177, 305 RMB, and Own 17,
735 share at price of 10 at purchased date)
2. Baoying Lu (270, 000RMB, and Own 27, 000 share at price of
10 RMB at purchased date)
3. Zhisheng Kan. (203, 895RMB, and Own 20, 389.5 share at
price of 10 at purchased date)
4. Daqing Zhang (270, 000RMB and own 27, 000 share at price
of 10 at purchase date)
5. BochunLu 135, 000RMB, and Own 13, 500 share at price of 10
at purchased date)
1. Ownership right without voting right
2, Beta should authorize the final ...