Firm Victory for China North East Petroleum Holdings Ltd.

The Firm won a significant victory on behalf of China North East Petroleum Holdings Limited (“NEP” or “Company”), obtaining a judgment dismissing three shareholder derivative lawsuits against the Company and its directors and officers pending before Judge Miriam Goldman Cedarbaum in the United States District Court for the Southern District of New York. NEP is an independent oil company that produces crude oil in Northern China. Plaintiffs, shareholders of NEP, brought suit derivatively on behalf of the Company against its officers and directors, contending that they had breached fiduciary duties owed to NEP concerning accounting errors. On May 27, 2011, the Court granted a motion to dismiss Plaintiffs’ complaint and entered final judgment, finding that the complaint failed to allege facts showing a breach of fiduciary duty under the stringent standards set by Nevada law (where NEP is incorporated). Plaintiffs then moved to alter and amend the judgment under Federal Rule of Civil Procedure 59(e). In a well-reasoned eight page opinion, Judge Cedarbaum denied Plaintiffs’ motion. Plaintiffs have now filed a Notice of Appeal to the Second Circuit Court of Appeals. Lawrence Brocchini led the Firm’s representation, on which the Firm served as co-counsel with San Francisco-based Crone Law Group. The decision is Strickland v. Hongjun, Nos. 10 Civ. 5445 (MGC), 10 Civ. 6319 (MGC), 10 Civ. 6344 (MGC), 2001 WL 2671895 (S.D.N.Y. July 8, 2011).