Canadian Imperial Bank of CommerceForsythe v. ESC Fund Management, Inc. Cohen Milstein represents former and present employees of Canadian Imperial Bank of Commerce ("CIBC" or the "Bank") in a derivative action presently pending in Delaware Chancery Court. In addition to CIBC Employee Private Equity Fund (U.S.), I, LP (the "Fund"), as the nominal defendant, the Defendants are certain present and former officers and directors of CIBC (the "Individual Defendants"), CIBC ESC Advisors LLC (the "investment Advisor"), CIBC ESC SLP (the "Special Limited Partner") and the Bank. Plaintiffs allege various breaches of fiduciary duty by the defendants in connection with their mismanagement and/or lack of oversight of the Fund, which was set up by the bank and offered to certain "key" employees, purportedly as a reward for outstanding job performance. These key employees invested in and became limited partners of the Fund. Rather than sharing the risk and rewards of their co-investments in the Fund with the limited partners, the defendants willfully and persistently manipulated and mismanaged the Fund for their own gain, at the expense of the limited partners. Defendants used the Fund it as a dumping ground for the Bank's non-performing investments, while at the same time charging the Fund exorbitant management fees and earning a high rate of interest on leverage from plaintiffs. Since its inception in 2000, the Fund has lost over 75% of its value and has written down or written off more than half of its investments. On October 9, 2007, Vice Chancellor Lamb denied defendants' motion to dismiss. The case in on-going and active in discovery. |
