27001 Partnership v. Kohlberg Kravis Roberts & Co.
78 So. 3d 959
| Ala. | 2011Background
- KKR affiliates sought mandamus to vacate circuit court orders denying motion to dismiss for lack of personal jurisdiction and to dismiss ASA claims; Bruno's was Alabama-based supermarket operator with extensive Alabama presence; Project Crimson Due Diligence Report (May 1995) revealed asset overstatements and depreciation/self-insurance issues; Deloitte conducted due diligence in Alabama and prepared Project Crimson Report; the leveraged recapitalization culminated in Bruno's acquisition and a $400 million notes offering to fund it; plaintiffs purchased notes via Huff and allege misrepresentations in the prospectus/public filings and road show leading to over $190 million in Huff purchases; case history tracks multiple court proceedings and amendments culminating in mandamus petitions to challenge dismissal decisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over defendants? | Plaintiffs show Alabama-directed actions. | Contacts were outside Alabama; no targeted conduct. | Yes, Alabama courts have jurisdiction. |
| Fiduciary-shield protection for individual officers? | Officers participated in torts; shield does not apply. | Shield insulates individuals when acting for the corporation. | Shield does not bar personal jurisdiction; individuals subject to suit. |
| Alabama Securities Act claims and mandamus reviewability? | ASA claims stated; mandamus appropriate. | Issues are standing/Rule 12(b)(6); not mandamus reviewable. | Mandamus petitions denied; ASA issues remediable by appeal. |
Key Cases Cited
- International Shoe Co. v. Washington, 326 U.S. 310 (Supreme Court 1945) (minimum contacts framework; due process boundary)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (Supreme Court 1980) (purposeful availment and fair play considerations)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (Supreme Court 1985) (purposeful direction and related factors for jurisdiction)
- Ex parte McInnis, 820 So.2d 795 (Ala. 2001) (discusses minimum contacts and due process in Alabama)
- Ex parte Thames v. Gunter-Dunn, Inc., 373 So.2d 640 (Ala. 1979) (fiduciary shield and corporate officer jurisdiction themes)