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10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document Pg 60 of 133 transferee “transferring assets to and from the United States, there could not be claims for subsequent transfers against it”); Newbro v. Freed, 337 F. Supp. 2d 428, 433 (S.D.N.Y. 2004) (finding “articulable nexus” between out-of-state defendants’ “New York contacts and the underlying claims in the litigation,” where claims arose out of a transfer which “arose from a chain of events” which included defendants’ New York contacts); MWL Brasil Rodas & Eixos Ltda v. K-IV Enters. LLC, 661 F. Supp. 2d 419, 424–25 (S.D.N.Y. 2009) (cause of action arose out of out-of-state defendant’s connections with New York where the contract that represented defendant’s business transactions in New York was not the same as the contract that was the subject of the cause of action, where “the two contracts are substantially related.”) 6. UBS SA, UBSFSL, and UBSTPM Are Mere Departments of UBS AG and Therefore Subject to the Court’s General Jurisdiction UBS SA, UBSFSL, and UBSTPM are subject to jurisdiction because each is a mere department of its corporate parent UBS AG, which has not contested jurisdiction. 19 (See UBS Mot. at 35.) Courts in this jurisdiction have established the following four-part test to determine whether a corporate subsidiary or affiliate is a mere department of its corporate parent: (1) common ownership; (2) financial interdependence; (3) interference with personnel and disregard for corporate formalities; and (4) control over operational and marketing policies. Van Egeraat, 2009 WL 1209020, at *2. Each prong of the mere department test is satisfied here such that the imputation of UBS AG’s jurisdictional contacts to the Moving UBS Defendants is not blind aggregation (see UBS Mot. at 34,) but rather the consequence of their mere department relationship. Van Egeraat, 2009 WL 1209020, at *2 (citing Beech Aircraft, 751 F.2d at 120). 19 UBS AG conducts regular banking business through multiple offices in the United States, including those in New York, and is thus subject to the Court’s general jurisdiction. (See Pergament Decl. Ex. 56 at 48; Chloe, 616 F.3d at 164.) In addition, UBS AG is subject to specific jurisdiction as a consequence of its contacts relating to Luxalpha. (See Am. Compl. 128-131.) 40
10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document Pg 61 of 133 The first and threshold requirement, common ownership, is satisfied because of the undisputed fact that each of UBS SA, UBSFSL, and UBSTPM are wholly owned subsidiaries of UBS AG. 20 The second requirement, financial interdependence, is apparent from UBS AG’s own Annual Reports, which note that UBS AG’s consolidated financial statements comprise “those of the parent company (UBS AG) and its subsidiaries . . . presented as a single economic entity.” (Pergament Decl. Ex. 56 at 297.) Further, the 2011 Annual Report notes that “UBS controls an entity when it has the power to govern the financial and operating policies of an entity. Generally this is indicated by a direct shareholding of more than one-half of the voting rights.” (Id.) This is exactly the case with UBS SA, UBSFSL, and UBSTPM, as they are wholly owned by UBS AG. The third factor, failure to observe corporate formalities, is satisfied because of the manner in which UBS AG manages its subsidiaries as part of a singular whole, and the substantial overlap in personnel between UBS AG, UBS SA, UBSFSL, and UBSTPM. UBS AG places its legally separate subsidiaries into larger business divisions that operate out of UBS AG. (Pergament Decl. Ex. 56 at 197, 394–95.) UBS SA is part of UBS AG’s Wealth Management and Swiss Bank business division, UBSFSL is part of UBS AG’s Global Asset Management business division, and UBSTPM’s parent entity UBS Fund Holding (Luxembourg) S.A. was also part of UBS AG’s Global Asset Management business division until its liquidation in 2009. (Pergament Decl. Exs. 56 at 394–95; 61 at 351.) Each of these business divisions is managed by 20 UBS AG has continuously owned 100% of the equity of UBS SA and UBSFSL from the time Luxalpha and Groupement were incorporated through the present. (Pergament Decl. Exs. 57 at 159–60; 56 at 394–95.) Likewise, UBS AG has been the ultimate owner of UBSTPM for all times relevant to this action. From at least 2006, when UBSTPM became Luxalpha’s Portfolio Manager, UBSTPM was 99.9% owned by UBS Fund Holding (Luxembourg) S.A.—itself an entity entirely owned by UBS AG. (Pergament Decl. Exs. 58; 59 at 173.) In December 2009, UBS Fund Holding (Luxembourg) was liquidated, and its ownership stake in UBSTPM was transferred to UBS AG. (See Pergament Decl. Ex. 60 at 8, 9.) 41
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