AVE. CAPITAL MANAGEMENT II, L.P. v. SCHADEN

No. 15-1389.

843 F.3d 876 (2016)

AVENUE CAPITAL MANAGEMENT II, L.P., a Delaware limited partnership; Avenue International Master, L.P., a Cayman Islands exempted limited partnership; Avenue Investments, L.P., a Delaware limited partnership; Avenue Special Situations Fund VI (Master), L.P., a Delaware limited partnership; Managed Accounts Master Fund Services-MAP10, a sub-trust of an umbrella unit trust constituted by a trust deed governed by the laws of Ireland; Avenue-CDP Global Opportunities Fund, L.P., a Cayman Islands exempted limited liability partnership; Avenue Special Opportunities Co-Investment Fund I, L.P., a Delaware limited partnership; Avenue Special Opportunities Fund I, L.P., a Delaware limited partnership; Drawbridge Special Opportunities Fund L.P., a Delaware limited partnership; Drawbridge Special Opportunities Fund LTD, a Cayman Islands company; FCI Holdings I LTD, a Cayman Islands company; FCI Holdings II LTD, a Cayman Islands company; FCOF II UB Securities LLC, a Delaware limited liability company; FCOF UB Investments LLC, a Delaware limited liability company; FTS SIP L.P., a Jersey limited partnership; Pangaea CLO 2007-1 LTD, a Cayman Islands company; Sargas CLO I LTD, a Cayman Islands company, Worden Master Fund II L.P., a Cayman Islands exempted limited partnership; Worden Master Fund L.P., a Cayman Islands exempted limited partnership, Plaintiffs-Appellants, v. Richard F. SCHADEN, an individual; Richard E. Schaden, an individual; Frederick H. Schaden, an individual; Greg MacDonald, an individual; Dennis Smythe, an individual; Andrew R. Lee, an individual; Patrick E. Meyers, an individual; John M. Moore, an individual; Thomas Ryan, an individual; Consumer Capital Partners LLC, a Delaware limited liability company a/k/a Cervantes Capital LLC, Defendants-Appellees.

United States Court of Appeals, Tenth Circuit.

Filed December 13, 2016.


Attorney(s) appearing for the Case

Rex S. Heinke , Akin Gump Strauss Hauer & Feld LLP, Los Angeles, California ( Jeffery A. Dailey , Akin Gump Strauss Hauer & Feld LLP, Philadelphia, Pennsylvania, Jessica M. Weisel , Akin Gump Strauss Hauer & Feld LLP, Los Angeles, California, Stephen M. Baldini , Akin Gump Strauss Hauer & Feld, LLP, New York, NY, and Allen L. Lanstra , Skadden, Arps, Slate, Meagher & Flom, Los Angeles, California, with him on the briefs) for Plaintiffs-Appellants.

Nathaniel P. Garrett , Jones Day, San Francisco, California ( Amanda K. Rice , Jones Day, San Francisco, California, Timothy R. Beyer , Bryan Cave , Denver, Colorado, Bruce S. Bennett and Christopher Lovrien , Jones Day, Los Angeles, California, with him on the brief) for Defendants-Appellees.

Before LUCERO, BALDOCK, and BACHARACH, Circuit Judges.


This securities-fraud case arises out of a transaction to restructure Quiznos's debt.1 In this transaction, multiple investment funds ("Avenue" and "Fortress")2 purchased equity in Quiznos. After Quiznos's financial condition plummeted, Avenue and Fortress sued former...

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