The Tenth Circuit decided one civil RICO matter in Bixler V. Foster.
Bixler v. Foster, No. 09-2138, involved an action by minority shareholders of a corporation against its directors and lawyers, alleging that defendants violated the civil Racketeer Influenced and Corrupt Organizations Act (RICO), when they arranged to transfer the company’s assets to an Australian corporation. The district court dismissed the complaint.
As the Tenth Circuit wrote: “The minority shareholders contend the defendants defrauded them of their share of the UKL stock and rendered their METCO investment virtually worthless. . . . Plaintiffs claim defendants conspired to deprive them of the value of their METCO shares by a series of predicate acts based on the above-described conduct, in violation of RICO.”
The Tenth Circuit affirmed, holding that (1) plaintiffs lacked standing under RICO to assert shareholder derivative claims; (2) allegations of securities fraud did not establish predicate acts under RICO; and (3) the “continuity” requirement of RICO was not satisfied by the allegations in the complaint.
http://www.Findlaw.com reported February 22, 2010