MW Gestion, derivatively on behalf of nominal defendant Global Cord Blood Corporation et al v. CELLENKOS INC. et al, 653598/2023, 214 (N.Y. Sup. Ct., New York County Jan. 5, 2024) (2025)

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`FILED: NEW YORK COUNTY CLERK 01/05/2024 03:47 PM
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`TABLE OF CONTENTS
`
`INTRODUCTION .......................................................................................................................... 1
`
`FACTUAL BACKGROUND ....................................................................................................... 11
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`A. The Patently Unfair Cellenkos Transaction ............................................................. 12
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`1. The Cellenkos Transaction Was Highly Conflicted ..................................12
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`2. The Process for the Transaction Was Unfair .............................................14
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`3. The Cellenkos Transaction Grossly Overvalued Cellenkos ......................15
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`B. The Cellenkos Transaction Concealed the Misappropriation of Company Funds .. 16
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`C. The Director Defendants’ Continued Obstruction ................................................... 18
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`D. Defendants Participated in the Misconduct in New York ....................................... 21
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`E. The JPLs Lack the Funds to Bring This Action ....................................................... 24
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`ARGUMENT ................................................................................................................................ 25
`
`I.
`
`PLAINTIFFS HAVE DERIVATIVE STANDING.......................................................... 25
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`A. Plaintiffs Have Derivative Standing Under Cayman Law ....................................... 25
`
`1. The Ultra Vires Nature of the Cellenkos Transaction Gives Plaintiffs
`Standing ...........................................................................................................25
`
`2. Plaintiffs Have Standing Because Global Cord Blood is Unable to Bring this
`Action on Its Own ............................................................................................27
`
`a)
`
`b)
`
`Plaintiffs Have Standing Under the Redress Principle ................. 27
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`Approval of the Cayman Court is Not Required .......................... 30
`
`Defendants’ Misconduct Prevented Plaintiffs From Registering
`c)
`Their Shares .............................................................................................. 32
`
`d)
`
`The Cayman Stay Does Not Apply ............................................... 35
`
`II.
`
`THE COURT HAS PERSONAL JURISDICTION OVER DEFENDANTS .................. 36
`
`A. The Court Has Personal Jurisdiction Over Defendant Mark Chen .......................... 38
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`1. Defendant Mark Chen Was Properly Served .............................................38
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`2. The Court Has Personal Jurisdiction Over Mark Chen .............................39
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`B. The Key Connections Between the Cellenkos Transaction and New York Confer
`Personal Jurisdiction on Mark Chen and the Remaining Defendants ............................... 41
`
`1. These New York Contacts Further Established Personal Jurisdiction Over Mark
`Chen ...................................................................................................................... 43
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`C. The Court Has Personal Jurisdiction Over the Golden Meditech Defendants......... 46
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`D. The Court Has Personal Jurisdiction Over Cellenkos.............................................. 53
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`E. The Court Has Personal Jurisdiction Over Redwood .............................................. 56
`
`PLAINTIFFS ADEQUATELY ALLEGE THEIR CLAIMS AGAINST
`III.
`DEFENDANTS ............................................................................................................................ 58
`
`A. Plaintiffs Adequately Plead Cayman Law Claims ................................................... 59
`
`B. Plaintiffs Adequately Allege Breaches of Fiduciary Duty by the Director
`Defendants ........................................................................................................................ 60
`
`1. Plaintiffs Adequately Allege Breaches of Fiduciary Duty by Defendants Weng
`and Mark Chen .................................................................................................60
`
`a)Plaintiffs’ Breach of Fiduciary Duty Claims Against Defendants Weng
`and Mark Chen are Sufficiently Particularized ...................................63
`
`2. The Remaining Director Defendants Breached Their Fiduciary Duties ....66
`
`C. Plaintiffs Adequately Allege Claims Against the Golden Meditech Defendants .... 69
`
`1. Plaintiffs Adequately Allege That the Golden Meditech Defendants
`Aided-and-Abetted Breaches of Fiduciary Duty .............................................69
`
`a)The Golden Meditech Defendants Provided “Substantial Assistance”
`..............................................................................................................70
`
`b) The Golden Meditech Defendants’ Knowledge is Adequately Alleged
`..............................................................................................................72
`
`2. Plaintiffs Adequately Allege Dishonest Assistance Against the Golden
`Meditech Defendants .......................................................................................75
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`3. Plaintiffs Adequately Allege Unjust Enrichment Against the Golden Meditech
`Defendants .......................................................................................................76
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`4. Plaintiffs Adequately Allege a Claim for Knowing Receipt Against the
`Golden Meditech Defendants ..........................................................................79
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`D. Plaintiffs Adequately Allege Claims Against Cellenkos ......................................... 79
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`1. Cellenkos Assisted in the Director Defendants’ Breaches of Fiduciary ....79
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`2. Plaintiffs Adequately Allege Cellenkos’s Unjust Enrichment and Knowing
`Receipt .............................................................................................................83
`
`E.
`
`Plaintiffs Adequately Allege Claims Against Easton .............................................. 83
`
`1. Plaintiffs Adequately Allege Easton’s Aiding-and-Abetting Breaches of
`Fiduciary Duty .................................................................................................83
`
`2. Plaintiffs Adequately Allege Easton’s Dishonest Assistance ....................86
`
`F.
`
`Plaintiffs Adequately Allege Claims Against Redwood .......................................... 87
`
`1. ....... Plaintiffs Adequately Allege That Redwood Aided and Abetted the Director
`Defendants’ Breaches of Fiduciary Duty .............................................................. 87
`
`2. .. Redwood Provided Dishonest Assistance to the Director Defendants’ Breaches
`of Fiduciary Duty .................................................................................................. 90
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`CONCLUSION ............................................................................................................................. 91
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`
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`Cases
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`111 W. 57th Inv. LLC v. 111 W57th Prop. Owner LLC,
`2020 WL 1079044 (Sup. Ct. N.Y. Cnty. Feb. 28, 2020) .........................................................83
`
`798 Tremont Holding LLC v. Wefile LLC,
`78 Misc. 3d 1226(A), (Sup. Ct. Bronx Cnty. 2023)...........................................................57, 59
`
`ADYB Engineered for Life, Inc. v. Edan Admin. Servs. Ltd.,
`2021 WL 1177532 (S.D.N.Y. Mar. 29, 2021) .........................................................................42
`
`Agency Rent A Car Sys., Inc. v. Grand Rent A Car Corp.,
`98 F.3d 25 (2d Cir. 1996).........................................................................................................42
`
`Al Rushaid v. Pictet & Cie,
`28 N.Y.3d 316 (2016) ........................................................................................................37, 43
`
`Alan B. Greenfield, M.D., P.C. v. Long Beach Imaging Holdings, LLC,
`114 A.D.3d 888 (2d Dep’t 2014) .............................................................................................79
`
`Alas Int’l Ltd. v. Ramiz,
`257 A.D.2d 408 (1st Dep’t 1999) ............................................................................................61
`
`Alibaba Grp. Holding Ltd. v. Alibabacoin Found.,
`2018 WL 5118638 (S.D.N.Y. Oct. 22, 2018) ..........................................................................46
`
`Allstate Ins. Co. v. Stolarz,
`81 N.Y.2d 219 (1993) ..............................................................................................................70
`
`Am. Int’l Grp., Inc. v. Greenberg,
`23 Misc. 3d 278 (Sup. Ct. N.Y. Cnty. 2008), aff’d, 60 A.D.3d 483 (1st Dep’t
`2009) ......................................................................................................................65, 71, 72, 73
`
`Anwar v. Fairfield Greenwich Ltd.,
`728 F. Supp. 2d 372 (S.D.N.Y. 2010)......................................................................................78
`
`Armentano v. Paraco Gas Corp.,
`90 A.D.3d 683 (2d Dep’t 2011) .........................................................................................69, 78
`
`Ault v. Soutter,
`204 A.D.2d 131 (1st Dep’t 1994) ............................................................................................66
`
`Baliga v. Link Motion Inc.,
`2022 WL 2531535 (S.D.N.Y. Mar. 9, 2022) ...........................................................................35
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`
`
`Bray v Ford
`[1896] .......................................................................................................................................69
`
`Brinckerhoff v. JAC Holding Corp.,
`10 A.D.3d 520 (1st Dep’t 2004) ..............................................................................................66
`
`Bullen v. CohnReznick, LLP,
`194 A.D.3d 637 (1st Dep’t 2021) ............................................................................................84
`
`Bullen v. Sterling Valuation Grp., Inc.,
`67 Misc. 3d 1227(A), (Sup. Ct. N.Y. Cnty. 2020) .................................................59, 81, 85, 90
`
`Bullmore v. Ernst & Young Cayman Islands,
`45 A.D.3d 461 (1st Dep’t 2007) ..............................................................................................83
`
`Butler v. Stagecoach Grp., PLC,
`72 A.D.3d 1581 (4th Dep’t 2010), aff'd as modified sub nom. Edwards v. Erie
`Coach Lines Co., 17 N.Y.3d 306 (2011) .................................................................................60
`
`Cannonball Fund, Ltd. v. Dutchess Cap. Mgmt., LLC,
`2016 WL 7189819 (Mass. Super. Ct. Sept. 30, 2016) .............................................................35
`
`Carr v. New Enter. Assocs., Inc.,
`2018 WL 1472336 (Del. Ch. Mar. 26, 2018)...........................................................................74
`
`Cement Masons Loc. 780 Pension Fund v. Schleifer,
`56 Misc. 3d 1204(A), (Sup. Ct. N.Y. Cnty. 2017) ...................................................................77
`
`China AI Cap. Ltd. v. DLA Piper LLP (US),
`2023 WL 5016492 (S.D.N.Y. July 28, 2023) ..........................................................................92
`
`City of Almaty v. Ablyazov,
`2021 WL 5200220 (S.D.N.Y. Mar. 29, 2021) .........................................................................79
`
`CMG Holdings Grp. v. Wagner,
`2016 WL 4688865 (S.D.N.Y. Sept. 7, 2016) ...........................................................................70
`
`Consumer Fin. Prot. Bureau v. NDG Fin. Corp.,
`2016 WL 7188792 (S.D.N.Y. Dec. 2, 2016) .....................................................................52, 53
`
`Cornely v. Dynamic HVAC Supply, LLC,
`44 A.D.3d 986 (2d Dep’t 2007) ...............................................................................................37
`
`D&R Glob. Selections, S.L. v. Bodega Olegario Falcon Pineiro,
`29 N.Y.3d 292 (2017) ..............................................................................................................54
`
`Dagen v. CFC Grp. Holdings, Ltd.,
`2003 WL 194208 (S.D.N.Y. Jan. 28, 2003) ..................................................................9, 73, 78
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`Davis v. Port,
`2020 WL 4464338 (Sup. Ct. N.Y. Cnty. July 31, 2020), reversed in part, 193
`A.D.3d 500 (1st Dep’t 2021) .......................................................................................77, 83, 87
`
`Davis v. Scottish Re Grp. Ltd.,
`30 N.Y.3d 247 (2017) ........................................................................................................31, 32
`
`Deutsche Bank Sec., Inc. v. Mont. Bd. of Invs.,
`7 N.Y.3d 65 (2006) ..................................................................................................................42
`
`Dresdner Bank AG (N.Y. Branch) v. Edelmann,
`129 Misc. 2d 686 (Sup. Ct. N.Y. Cnty. 1985), aff’d, 117 A.D.2d 1024 (1st
`Dep’t 1986) ..............................................................................................................................60
`
`Elghanayan v. Elghanayan,
`148 Misc. 2d 552 (Sup. Ct. N.Y. Cnty. 1990) .........................................................................61
`
`EMI Christian Music Grp., Inc. v. MP3tunes, LLC,
`844 F.3d 79 (2d Cir. 2016).......................................................................................................44
`
`Evans v. Rosen,
`111 A.D.3d 459 (1st Dep’t 2013) ............................................................................................75
`
`Exclaim Assocs. Ltd. v. Nygate,
`10 Misc. 3d 1063(A), (Sup. Ct. N.Y. Cnty. 2005) .............................................................54, 56
`
`Fischbarg v. Doucet,
`9 N.Y.3d 375 (2007) ................................................................................................................37
`
`Foss v. Harbottle
`[1843] ............................................................................................................................... passim
`
`Ga. Malone & Co. v. Rieder,
`19 N.Y.3d 511 (2012) ..............................................................................................................79
`
`Ge Dandong v. Pinnacle Performance Ltd.,
`966 F. Supp. 2d 374 (S.D.N.Y. 2013)......................................................................................38
`
`Gintzler v. Schwarz,
`129 Misc. 2d 836 (Sup. Ct. N.Y. Cnty. 1985) .........................................................................39
`
`Glob. Mins. & Metals Corp. v. Holme,
`35 A.D.3d 93 (1st Dep’t 2006) ................................................................................................75
`
`Greenberg v. Wiesel,
`186 A.D.3d 1336 (2d Dep’t 2020) ...........................................................................................78
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`
`
`Higgins v. N.Y. Stock Exch., Inc.,
`10 Misc. 3d 257 (Sup. Ct. N.Y. Cnty. 2005) .....................................................................65, 66
`
`IJK Palm LLC v. Anholt Servs. USA, Inc.,
`33 F.4th 669 (2d Cir. 2022) .....................................................................................................32
`
`In re AlphaStar Ins. Grp. Ltd.,
`383 B.R. 231 (Bankr. S.D.N.Y. 2008) (cited by Redwood Brief ) ..........................................92
`
`In re Bank of N.Y. Derivative Litig.,
`2000 WL 1708173 (S.D.N.Y. Nov. 14, 2000) .........................................................................67
`
`In re Comverse Tech., Inc.,
`56 A.D.3d 49 (1st Dep’t 2008) ................................................................................................66
`
`In re Condor Ins. Ltd.,
`2012 WL 1211387 (Bankr. S.D. Miss. Apr. 11, 2012) ............................................................77
`
`In re Nortel Networks, Inc.,
`469 B.R. 478 (Bankr. D. Del. 2012) ........................................................................................77
`
`In re Platinum-Beechwood Litig.,
`426 F. Supp. 3d 14 (S.D.N.Y. 2019)........................................................................................85
`
`In re Platinum-Beechwood Litig.,
`427 F. Supp. 3d 395 (S.D.N.Y. 2019)......................................................................................69
`
`In re Refco Inc. Sec. Litig.,
`2011 WL 13168451 (S.D.N.Y. Dec. 16, 2011) .................................................................81, 90
`
`In re Saft,
`41 Misc. 3d 1219(A), (Surr. Ct. Nassau Cnty. 2013) ..............................................................60
`
`In re Sphinx
`[2014] .......................................................................................................................................32
`
`Int’l Credit Brokerage Co. v. Agapov,
`249 A.D.2d 77 (1st Dep’t 1998) ..............................................................................................69
`
`Jafari-Fini v Skillglass Limited
`[2004] .......................................................................................................................................33
`
`JPS Cap. Partners, LLC v. Silo Point Holding LLC,
`24 Misc. 3d 1234(A), (Sup. Ct. N.Y. Cnty. 2009) ...................................................................42
`
`Kaufman v. Cohen,
`307 A.D.2d 113 (1st Dep’t 2003) ......................................................................................75, 83
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`
`
`Kocourek v. Booz Allen Hamilton Inc.,
`85 A.D.3d 502 (1st Dep’t 2011) ..............................................................................................92
`
`Krechmer v. Boulakh,
`277 A.D.2d 288 (2d Dep’t 2000) .............................................................................................39
`
`Kreutter v. McFadden Oil Corp.,
`71 N.Y.2d 460 (1988) ...................................................................................................... passim
`
`Landry v. Price Waterhouse Chartered Accts.,
`715 F. Supp. 98 (S.D.N.Y. 1989) ............................................................................................45
`
`Lawson v. Full Tilt Poker Ltd.,
`930 F. Supp. 2d 476 (S.D.N.Y.2013).......................................................................................38
`
`Lazzaro v. Manber,
`701 F. Supp. 353 (E.D.N.Y. 1988) ..........................................................................................85
`
`Lerner v. Fleet Bank, N.A.,
`459 F.3d 273 (2d Cir. 2006).....................................................................................................71
`
`Licci v. Lebanese Canadian Bank, SAL,
`20 N.Y.3d 327 (2012) ..............................................................................................................37
`
`Litton Loan Servicing, LP v. Vasilatos,
`7 A.D.3d 580 (2d Dep’t 2004) .................................................................................................39
`
`Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo Sec., LLC,
`2016 WL 5719749 (S.D.N.Y. Sept. 29, 2016) .........................................................................73
`
`Manbro Energy Corp. v. Chatterjee Advisors, LLC,
`2021 WL 2037552 (S.D.N.Y. May 21, 2021) .........................................................................78
`
`Manbro Energy Corp. v. Chatterjee Advisors, LLC,
`2022 WL 4225543 (S.D.N.Y. Sept. 13, 2022) .........................................................................74
`
`Marine Midland Bank v. John E. Russo Produce Co.,
`50 N.Y.2d 31 (1980) ................................................................................................................75
`
`Marino v. Grupo Mundial Tenedora, S.A.,
`2011 WL 1142887 (S.D.N.Y. Mar. 17, 2011) .........................................................................74
`
`Mason-Mahon v. Flint,
`166 A.D.3d 754 (2d Dep’t 2018) .............................................................................................66
`
`McGowan v. Smith,
`52 N.Y.2d 268 (1981) ..............................................................................................................54
`
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`
`
`Miller v. Calotychos,
`303 F. Supp. 2d 420 (S.D.N.Y. 2004)......................................................................................41
`
`Myun-Uk Choi v. Tower Rsch. Cap. LLC,
`890 F.3d 60 (2d Cir. 2018).......................................................................................................79
`
`Namer v. Am. Networks Int’l Inc.,
`2001 WL 30663 (S.D.N.Y. Jan. 12, 2001) ..............................................................................47
`
`Nick v. Schneider,
`150 A.D.3d 1250 (2d Dep’t 2017) ...........................................................................................37
`
`Obeid v. La Mack,
`2019 WL 1227789 (S.D.N.Y. Mar. 15, 2019) ...................................................................72, 90
`
`People v. Coventry First LLC,
`52 A.D.3d 345 (1st Dep’t 2008), aff’d, 13 N.Y.3d 108 (2009) .....................................5, 15, 73
`
`Peterson v. Islamic Republic of Iran,
`2013 WL 1155576 (S.D.N.Y. Mar. 13, 2013), aff’d, 758 F.3d 185 (2d Cir.
`2014), aff’d sub nom. Bank Markazi v. Peterson, 578 U.S. 212 (2016) ..................................46
`
`Retail Software Servs., Inc. v. Lashlee,
`854 F.2d 18 (2d Cir. 1988).......................................................................................................44
`
`Rohrer v. IRISS, Inc.,
`2011 WL 3475455 (W.D.N.Y. Aug. 9, 2011) .........................................................................44
`
`Roni LLC v. Arfa,
`72 A.D.3d 413 (1st Dep’t 2010) ..............................................................................................75
`
`Rosen v. Rosen,
`78 A.D.2d 911 (3d Dep’t 1980) ...............................................................................................75
`
`Rutgerswerke AG v. Abex Corp.,
`1995 WL 625701 (S.D.N.Y. Oct. 25, 1995) ......................................................................43, 44
`
`Sands Bros. Venture Cap. II, LLC v. Huff,
`67 Misc. 3d 1216(A), (Sup. Ct. N.Y. Cnty. 2020) ...................................................................40
`
`Sands Bros. Venture Cap. II, LLC v. Metro. Paper Recycling, Inc.,
`201 A.D.3d 421 (1st Dep’t 2022) ......................................................................................72, 78
`
`Schechter v. Banque Commerciale Privee,
`1991 WL 105217 (S.D.N.Y. June 11, 1991) ...........................................................................41
`
`Scholastic, Inc. v. Stouffer,
`2000 WL 1154252 (S.D.N.Y. Aug. 14, 2000) ...................................................................41, 42
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`
`
`Segal v. Cooper,
`49 A.D.3d 467 (1st Dep’t 2008) ..............................................................................................78
`
`Simian Line v. Shoreline Ent., Inc.,
`1999 WL 627441 (S.D.N.Y. Aug. 17, 1999) ...........................................................................44
`
`Smallberg v. Raich Ende Malter & Co., LLP,
`140 A.D.3d 942 (2d Dep’t 2016) .........................................................................................9, 82
`
`State Workers’ Comp. Bd. v. Wang,
`147 A.D.3d 104 (3d Dep’t 2017) .............................................................................................82
`
`Taca Int’l Airlines, S.A. v. Rolls Royce of England, Ltd.,
`47 Misc. 2d 771 (Sup. Ct. N.Y. Cnty. 1965) ...........................................................................61
`
`TBA Glob., LLC v. Proscenium Events, LLC,
`114 A.D.3d 571 (1st Dep’t 2014) ............................................................................................70
`
`Teachers’ Ret. Sys. of La. v. Aidinoff,
`900 A.2d 654 (Del. Ch. 2006)..................................................................................................74
`
`Top Jet Enterprises Ltd v Sino Jet Holdings Ltd.
`[2018] .......................................................................................................................................31
`
`Tyman v. Pfizer, Inc.,
`2017 WL 6988936 (S.D.N.Y. Dec. 27, 2017) .........................................................................79
`
`U.S. Small Bus. Admin. v. Feinsod,
`347 F. Supp. 3d 147 (E.D.N.Y. 2018) .....................................................................................66
`
`Unigraphic, Inc. v. Star Wars Corp.,
`79 A.D.2d 944 (1st Dep’t 1981) ..............................................................................................41
`
`Universal-MCA Music Publ’g v. Bad Boy Ent., Inc.,
`2003 WL 21497318 (Sup. Ct. N.Y. Cnty. June 18, 2003) .......................................................74
`
`Wechsler v. Bowman,
`285 N.Y. 284 (1941) ................................................................................................................75
`
`Wilson v. Dantas,
`128 A.D.3d 176 (1st Dep’t 2015) ......................................................................................36, 42
`
`Wilson v. Imagesat Int’l N.V.,
`2012 WL 10008066 (Sup. Ct. N.Y. Cnty. Apr. 18, 2012) .................................................47, 48
`
`Wilson v. Tully,
`243 A.D.2d 229 (1st Dep’t 1998) (Golden Meditech Brief ) ...................................................50
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`
`
`Ying Jun Chen v. Lei Shi,
`19 A.D.3d 407 (2d Dep’t 2005) .........................................................................................53, 56
`
`Yuko Ito v. Suzuki,
`57 A.D.3d 205 (1st Dep’t 2008) ........................................................................................70, 72
`
`Statutes
`
`28 U.S.C. § 1782 ............................................................................................................................32
`
`Rules
`
`C.P.L.R.§ 301......................................................................................................................... passim
`
`C.P.L.R. § 302........................................................................................................................ passim
`
`C.P.L.R.§ 308.................................................................................................................................39
`
`C.P.L.R.§ 3016...................................................................................................................59, 60, 67
`
`C.P.L.R.§ 3211.............................................................................................................37, 59, 67, 91
`
`C.P.L.R.§ 4511.........................................................................................................................59, 60
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`FILED: NEW YORK COUNTY CLERK 01/05/2024 03:47 PM
`NYSCEF DOC. NO. 214
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`INDEX NO. 653598/2023
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`RECEIVED NYSCEF: 01/05/2024
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`Plaintiffs MW Gestion and MW Optimum (“Plaintiffs”), derivatively on behalf of Global
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`Cord Blood Corporation (“Global Cord Blood” or the “Company”), respectfully submit this
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`memorandum of law in Opposition to the Motions to Dismiss submitted by Defendants Mark
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`Chen and Jennifer Weng (NYSCEF Nos. 49-93, 97); Golden Meditech Holdings Limited,
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`Golden Meditech Stem Cells (BVI) Company Limited, GM Precision Medicine (BVI) Limited,
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`and Golden Meditech (BVI) Company Limited (NYSCEF Nos. 127-132);1 Cellenkos Inc.
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`(“Cellenkos”) (NYSCEF Nos. 117-120, 122); Easton Capital Corp. (“Easton”) (NYSCEF Nos.
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`98-116, 121, 123); and Redwood Valuation Partners (“Redwood”) (NYSCEF Nos. 38-48)
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`(collectively, “Defendants”).2
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`INTRODUCTION
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`Global Cord Blood provides umbilical-cord-blood storage service in China. It is
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`enormously profitable and amassed approximately $1 billion in cash from its operations in the
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`years leading up to 2022. Rather than utilize those funds for the best interest of the Company and
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`its shareholders, its Board of Directors engaged in a brazen scheme to siphon off at least
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`hundreds of millions of dollars to Yuen Kam, Global Cord Blood’s founder and former
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`Chairman and controlling shareholder. To cover up this misappropriation of the Company’s
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`funds, Kam and its Directors arranged for the Company to purchase Cellenkos—another
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`company that Kam controlled—at a grossly inflated valuation. The Cellenkos Transaction served
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`the dual purposes of (1) filling the hole in Global Cord Blood’s balance sheet that resulted from
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`1 Golden Meditech Holdings Limited, Golden Meditech Stem Cells (BVI) Company Limited,
`GM Precision Medicine (BVI) Limited, and Golden Meditech (BVI) Company Limited are
`referred to collectively as the “Golden Meditech Defendants.”
`2 “¶ _” references are to Plaintiff’s Stockholder Derivative Complaint (“Complaint,” NYSCEF
`No. 2), internal quotation marks and citations are omitted, and emphasis is added, unless noted
`otherwise below.
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`13 of 105
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`FILED: NEW YORK COUNTY CLERK 01/05/2024 03:47 PM
`NYSCEF DOC. NO. 214
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`INDEX NO. 653598/2023
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`RECEIVED NYSCEF: 01/05/2024
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`Kam’s misappropriation of the Company’s funds by having those funds accounted for as part of
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`the transaction and (2) diluting Global Cord Blood’s shareholders in order to entrench the
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`Company’s Board—which was beholden to Kam rather than shareholders—in control. Plaintiffs,
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`who are shareholders of Global Cord Blood, bring this derivative action against the Company’s
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`Directors, Kam, their related entities, and other parties involved in the Cellenkos Transaction to
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`recover the hundreds of millions of dollars that they enabled Kam and the Golden Meditech
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`Defendants to misappropriate.
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`This is a straightforward case challenging the egregious looting of Global Cord Blood’s
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`assets. After Kam sold his majority stake in the Company in 2018, he continued to secretly
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`control it by maintaining several conflicted roles. Kam conducts his business through the Golden
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`Meditech Defendants, including Golden Meditech Holdings Limited (“Golden Meditech”), a
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`company that he founded in 1993 and continued to control at all relevant times. In the years
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`leading up to the Cellenkos Transaction, there were numerous undisclosed ties between Global
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`Cord Blood and Golden Meditech that allowed Kam to continue to control Global Cord Blood
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`even after Golden Meditech sold its stake in the Compa