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RKS, on behalf of its unit-holder client, prevailed in Delaware federal court against a motion seeking dismissal of federal securities fraud claims. The case involves unique issues of law regarding manager-managed LLC units, including a rare application of the “forced seller” doctrine. The court found as a matter of law that in this situation, the LLC units were indeed securities within the meaning of the federal statute, and thus subject to the federal securities laws. The court allowed the plaintiff to proceed with his allegations that the defendants had implemented a multi-stage scheme to wrongfully seize plaintiff’s units in the company, RxMapper, a personalized medication platform that uses patient DNA to identify the medications most likely to be effective. Therefore, the court upheld claims for securities fraud alleged to have arisen from the defendants’ scheme to forcibly take the shareholder’s units for a fraction of their fair value. RKS looks forward to moving the case toward trial.
The opinion is available here.