Profilet v. Cambridge Financial Corp.

Outcome: Motions to dismiss denied/granted, in part

Description: Plaintiff David C. Profilet, as trustee of corporate debtor's Chaper 11 estate brought suit to recover, under federal and state securities law, under state racketeering and fraudulent conveyance law, and on breach of contract and malpractice theory, from participants in alleged scheme to defraud debtor in connection with issuance of stock. On motions to dismiss, the District Court held that: (1) fraud allegatons in trustee's complaint satisfied special federal pleading requirements and requirements of Private Securities Litigation Reform Act (PSLRA); (2) allegations regarding alleged scheme to defraud did not sufficiently allege any ongoing acts or threat of future misconduct to satisfy continuity requirement of the Florida Racketeer Influenced and Corrupt Organizations Act (RICO); and (3) amended complaint adding malpractice claim related back to date original complaint was filed. Motions to dismiss granted in part and denied in part.