OPINION AND ORDER
The joint insolvency administrators of Plaintiff RSL Communications Pic (“RSL Pic”) bring this diversity action on behalf of Plaintiff, alleging that seven former members of RSL Pic’s Board of Directors breached fiduciary duties owed to RSL Pic and its creditors. 1 In its two causes of action, Plaintiff seeks to hold Defendants individually liable for approximately $1 billion in damages, a figure that represents Plaintiffs estimate of the decline in RSL Pic’s value during the year 2000.
Before the Court are the parties’ cross-motions for summary judgment, as well as *187 Plaintiffs motion to re-open discovery pursuant to Rule 56(f) of the Federal Rules of Civil Procedure. For the reasons set forth below, Plaintiffs motions are denied, and Defendants’ motion is granted.
I. Background 2
This case relates to the financial collapse of the RSL Group, an international telecommunications enterprise founded in 1994 by Defendant Ronald S. Lauder (the “RSL Group”). The primary parent entity of the RSL Group was RSL Communications Ltd. (“RSL Ltd.”), a publicly traded company with numerous subsidiaries, including Plaintiff RSL Pic. Plaintiffs claims focus on Defendants’ conduct in connection with RSL Pic and the RSL Group during the year 2000. (See, e.g., Pl.’s Mem. at l.) 3 Therefore, in describing the relevant background information, the Court’s discussion focuses on that period of time.
A. Facts
1. The RSL Group
The RSL Group was created in order “to capitalize on the growth, deregulation and profitability of international long-distance telecommunications markets.” (Defs.’ 56.1 ¶ 1.) Its business strategy was two-fold. First, the RSL Group sought to provide “network and data solutions” to “small and medium business customers,” including local, national, international, and mobile phone services, internet access, web hosting, data networking services, and “e-commerce solutions.” (Dembrow Decl. Ex. R at RSL PLC 0003902; see also Amirfar Decl. Ex. 1 at PLF 66811.) Second, “once a sufficient critical mass of customers” was established, the RSL Group planned to make investments in the underlying network and infrastructure in order to achieve efficiencies that would provide it with a cost advantage. (See Dembrow Decl. Ex. R at RSL PLC 0003902.)
The RSL Group pursued these objectives through acquisitions in strategic regions spanning several continents and twenty-two countries. (See Defs.’ 56.1 ¶ 2.) The enterprise was structured as a parent entity, RSL Ltd., with eighty-five direct and indirect subsidiaries. (Pl.’s 56.1 ¶¶ 3, 5; Defs.’ 56.1 ¶ 2.) 4
a. RSL Ltd.
RSL Ltd. was incorporated under Bermuda law in 1996, and its securities were *188 publicly traded on the NASDAQ Stock Market during 2000. (Defs.’ 56.1 ¶ 1.) The RSL Group’s acquisitions were funded through periodic public offerings of RSL Ltd. shares, as well as debt offerings issued through RSL Pic to “qualified institutional buyers.” (See id. ¶ 3; Pl.’s 56.1 Opp’n ¶ 3.) 5 By the beginning of 2000, the RSL Group had $1.47 billion in revenues and over one million customers. (Defs.’ 56.1 ¶ 2.)
However, during 2000, RSL Ltd.’s stock price decreased significantly, and it struggled to raise sufficient capital to fund its operations. (See id. ¶¶ 30, 39, 47.) On March 18, 2001, the Board of Directors of RSL Ltd. (the “RSL Ltd. Board”) resolved to commence insolvency proceedings in Bermuda on behalf of the corporation. (Id. ¶ 82.)
b. RSL Pic
Plaintiff RSL Pic was incorporated in the United Kingdom in 1996. (Pl.’s 56.1 ¶ 1.) It was created to serve as a “financing arm” of RSL Ltd., and functioned as an intermediate holding company for RSL Ltd.’s subsidiaries in North America and Europe. (Amirfar Decl. Ex. 123, Dep. of Paul Domorski at 21:22; see also PL’s 56.1 ¶¶ 4-5.) RSL Pic had no separate employees, and its only operations were conducted by its subsidiaries. (Def.’s 56.1 ¶ 6; PL’s 56.1 Opp’n ¶ 6.) 6 Thus, immediately following the RSL Ltd. Board’s March 18, 2001 decision to commence insolvency proceedings in Bermuda, the Board of Directors of RSL Pic (the “RSL Pic Board”) formally convened and resolved to file for insolvency administration in the United Kingdom. (Defs.’ 56.1 ¶ 82.)
Between 1996 and February 2000, RSL Pic issued approximately $1.4 billion in debt through a series of note offerings, all of which were unconditionally guaranteed by RSL Ltd. (Defs.’ 56.1 ¶ 4.) Employees of RSL Ltd., acting from the New York offices of RSL Ltd., administered the funds raised by RSL Pic through these debt offerings. (Defs.’ 56.1 ¶ 7; see also Amirfar Decl. Ex. 114, Aug. 31, 2007 Report on Flow of Funds, Valuation, and Solvency Considerations by Mark A. Hopkins (the “Hopkins Report”) at 14-15; Amirfar Decl. Ex. 112, July 27, 2007 Expert Report by Seymour Preston Jr. (the “Preston Report”) at 4.) 7 RSL Ltd. depos *189 ited the “vast majority” of the funds raised by RSL Pic, as well as the proceeds of an RSL Ltd. stock offering, into an account in RSL Pic’s name at Morgan Stanley Dean Witter. (See Hopkins Report at 14.) According to one of Defendants’ experts:
Generally speaking, the determining factor in whether funds were held in ... accounts in RSL Pic’s name appeared to be not whether the funds were nominally raised at the RSL Pic or RSL Ltd. level, but whether the funds were to be expended in the short term or to be held for investment before they were expended.
(Id.) When RSL Ltd. wished to provide operational funding and capital to one of the RSL Group’s subsidiaries, it would transfer funds to the subsidiary from a bank account in RSL Ltd.’s name. (Defs.’ 56.1 ¶ 7.) RSL Ltd. employees would then restore the balance of RSL Ltd.’s account by depositing funds from an account maintained in RSL Pic’s name. (Id.; see also Hopkins Report at 14-15.)
c. Defendants’ Roles at the RSL Group
Each Defendant was a member of the RSL Pic Board at some point during the year 2000. (Defs.’ 56.1 ¶ 11.) However, it is undisputed that “[n]o formal, noticed ... meeting (either telephonic or in-person) of the full [RSL Pic Board] was held during the period from March 1 to December 31, 2000.” (PL’s 56.1 ¶ 40.) Nevertheless, in addition to serving on the RSL Pic Board, each Defendant was also either an executive at RSL Ltd., or a member of its Board of Directors, or both. (Defs.’ 56.1 ¶11.)
Specifically, Defendant Fisher was RSL Ltd.’s Chief Executive Officer (“CEO”) from the beginning of 2000 until August 2000. (Id.) In August 2000, Defendant Domorski replaced Fisher as RSL Ltd.’s CEO. (Id.) Defendant Schiffman acted as RSL Ltd.’s Chief Financial Officer (“CFO”) from mid-April 2000 until March 2001. (Id.; see also Amirfar Deck Ex. 131, Dep. of Steven Schiffman at 7:3-15.) Defendant Bildirici was RSL Ltd.’s Executive Vice President of Mergers and Acquisitions for all of 2000. (See Defs.’ 56.1 ¶ 11.)
Defendant Lauder — the founder of the RSL Group — held voting control of RSL Ltd. through his ownership of RSL Ltd. stock, and he acted as the chairman of the RSL Ltd. Board. (Id. ¶¶ 1, 11.) Defendants Lauder, Schuster, and Sekulow served as non-executive, ie., “outside,” directors of the RSL Ltd. Board, and Defendants Fisher and Domorski were also RSL Ltd. directors during their respective tenures as CEO of RSL Ltd. (See id. ¶ 11.) Additionally, Defendants Lauder, Schuster, Sekulow, and Fisher were members of the Executive Committee of the RSL Ltd. Board, and Defendants Schuster and Sekulow served on the Audit Committee. (Id. ¶¶ 14-15.)
2. The First Quarter of 2000
There is no dispute that, entering the year 2000, the financial forecasts for the RSL Group were positive. In late 1999 and early 2000 — during the “golden age” of the European telecommunications industry — the shares of RSL Ltd. were rated as a “buy,” and analysts considered the total value of the RSL Group to be greater than the aggregate value of its outstanding shares at their current price. (Id. ¶ 19; see also PL’s 56.1 Opp’n ¶ 19.) During the last two quarters of 1999, RSL Ltd. reported positive earnings before interest, taxes, depreciation, and amortization (“EBITDA”). (Defs.’ 56.1 ¶18.) In November 1999, RSL Ltd. also raised approximately $100 million through a public offering of securities of Deltathree, an RSL *190 Ltd. subsidiary that provided voice-over-internet communications services. (Id.)
Optimism regarding the RSL Group was tempered by its short-term cash requirements. Slides from a January 6, 2000 presentation by RSL Ltd. Chief Operating Officer (“COO”) Donald Shassian, titled “2000 Budget,” estimated “Cash Needs” for the RSL Group of between $240 and $260 million, and identified “the Ability to Complete New Financing” as a “Critical Success Factor” for the year. (Amirfar Decl. Ex. 18 at LTD 003315-16.) Thus, in order to generate the needed funds in early 2000, the RSL Group issued additional shares of RSL Ltd. stock, sought private equity investments, and issued additional debt.
On February 18, 2000, RSL Ltd. hired Chase Securities to solicit investments from private equity firms in $150-million blocks. (Defs.’ 56.1 ¶ 25; see also Amirfar Decl. Ex. 29.) However, although Chase received proposals from a number of interested parties by April 2000, including the Blackstone Group, the Carlyle Group, and Goldman Sachs, no such investments were consummated during the year 2000. (Defs.’ 56.1 ¶ 25; Pl.’s 56.1 Opp’n ¶ 25; see also Amirfar Decl. Ex. 30 at RSL PLC/ LTD 003931.) In mid-February 2000, RSL Ltd. also issued convertible preferred shares of its stock, which raised approximately $110 million. (Defs.’ 56.1 ¶21.)
Finally, in mid-February 2000, RSL Pic issued $100 million in United States Dollar-denominated notes, as well as an additional 100 million in Euro-denominated notes. (Defs.’ 56.1 ¶ 21; see also Bagby Opp’n Decl. Ex. 23; Amirfar Decl. Ex. 1.) On February 10, 2000, the RSL Pic Board executed a Unanimous Written Consent approving the debt offering (Bagby Opp’n Decl. Ex. 23), and a “Special Committee” of the RSL Pic Board — comprised of Defendants Fisher and Schuster- — set the pricing terms for the notes on February 14, 2000 (see Amirfar Decl. Ex. 87). Following the RSL Pic Board’s approval, on February 14, 2000, RSL Pic issued an offering circular relating to the notes (the “February 2000 Offering Circular” or the “Circular”). (Amirfar Decl. Ex. 1.) The February 2000 Offering Circular indicated that the notes were being issued by RSL Pic, and were “unconditionally guaranteed ... as to payment of principal, interest and any other amounts owed” by both RSL Ltd. and RSL COM U.S.A., Inc., a subsidiary of RSL Pic. (Id. at PLF 66813; see also id. at PLF 66804.)
The Circular used the term “we” to refer to the operations of RSL Ltd. on a “consolidated basis,” including its subsidiaries. (Id. at PLF 66811.) The Circular also contained consolidated financial data for RSL Ltd. for the years 1996 through 1999, and stated that:
RSL PLC had no independent operations other than serving solely as a foreign holding company for the Company’s North American and European operations.... [RSL Ltd.] has not presented separate financial statements and other related disclosures concerning RSL PLC because management has determined that such information is not material to shareholders or holders of the notes issued by RSL PLC. [RSL Ltd.’s] financial statements are, except for [RSL Ltd.’s] capitalization, deltathree.com operations, Asia/Pacific operations, Latin American operations, corporate overhead expenses and drawn credit facilities, identical to the financial statements of RSL PLC.
(Id. at PLF 66981.) The Circular identified the directors and senior executives of RSL Ltd., including the capacities in which Defendants served RSL Ltd. at that time, but it did not identify the directors of RSL Pic. (Defs.’ 56.1 ¶ 8.) Finally, the February 2000 Offering Circular indicated that the *191 funds raised through the offering would be administered by employees of RSL Ltd. (Id.)
3. The March 2000 Business Plan
In a March 3, 2000 discussion regarding “Strategic Alternatives,” Goldman Sachs represented to RSL Ltd. that it was “trading at a 70% discount to its Sum of the Parts Valuation.” (Amirfar Decl. Ex. 28 at GS/Bildirici 0025887.) Goldman Sachs also estimated that the fair value of RSL Ltd., net of its current debt, was approximately $4.7 billion. (Id.; see also Defs.’ 56.1 ¶ 24.) On the basis of these projections, at some point in March 2000, RSL Ltd. created a business plan for the period between 1999 and 2004 (the “March 2000 Business Plan” or the “Plan”). (See Dembrow Decl. Ex. R.) The primary feature of the Plan was RSL Ltd.’s decision to “focus on Europe and North America” because of “the slow pace of deregulation in the Far East and Latin America, combined with the explosive opportunity to exploit [the RSL Group’s] positioning in Europe____” (Id. at RSL PLC 0003902.) Based on that strategic emphasis, the Plan “only reflected] the results of [the RSL Group’s] operations in Europe and North America.” (See id.)
The Plan deemed all other RSL Group subsidiaries to be “non-core.” (Pl.’s 56.1 ¶ 17.) The operations specifically referenced as “non-core” in the March 2000 Business Plan were RSL Ltd. subsidiaries Deltathree, RSL Australia, and RSL Latin America, as well as “Telegate,” a German telephone directory assistance subsidiary of both RSL Ltd. and RSL Pie. (See Dem-brow Decl. Ex. R at RSL PLC 0003909-10.)
As part of the planned monetization of these “non-core” interests, the Plan contemplated: (1) a sale of at least part of RSL Ltd.’s remaining interest in Delta-three, which was worth approximately $800 million; (2) an initial public offering (“IPO”) of RSL Australia, which RSL Ltd. estimated would generate between $200 and $250 million; and a sale of Telegate that, at that time, was projected to generate net proceeds of approximately $400 million. (See Dembrow Decl. Ex. R at RSL PLC 0003910; see also Defs.’ 56.1 ¶22.) RSL Ltd.’s Plan also indicated that it was “pursuing] strategic alternatives” and equity investment for RSL Latin America. (Dembrow Decl. Ex. R at RSL PLC 0003910.) Finally, the Plan stated that “[w]ith the monetization of non-core assets ... (including [RSL Australia], [Delta-three] and [RSL Latin America], but excluding Telegate),” RSL Ltd. planned to “fully fund” the “base case five-year plan” of the RSL Group. (Id. at RSL PLC 0003902.)
4. May 2000: Market Conditions Begin to Deteriorate
On May 2, 2000, RSL Ltd. announced that it would be conducting a public road show to promote the IPO of RSL Australia’s stock. (Defs.’ 56.1 ¶ 27.) Two days later, on May 4, RSL Ltd. announced its financial results for the first quarter of 2000, which indicated that it had achieved a third consecutive quarter of positive EBITDA. (Id. ¶ 28.)
In the same press release in which RSL Ltd. announced its third-quarter earnings, it also announced that it had entered into an “alliance” with Italy’s Seat Pagine Gialle Spa (“SEAT”) that would provide it with an opportunity to sell Telegate in the future. (Id. ¶ 29; see also Amirfar Decl. Ex. 32 at RSL PLC/LTD 006556.) It was estimated that such a sale would ultimately generate proceeds of between $400 and $500 million. (Defs.’ 56.1 ¶ 29.) However, in early May 2000, the RSL Ltd. Board decided to postpone the Telegate sale until early 2001. (Id. ¶ 31.) The schedule was adopted by RSL Ltd. with the hope of capitalizing on speculation that pending
*192 legislation in Germany, if enacted by the time of the sale, would reduce the tax on the transaction and increase the net proceeds by $150 million. (Id.)
However, during the second quarter of 2000, “the overall capital markets ... declined and investors became less receptive to investing in telecommunications companies.” (Pl.’s 56.1 ¶ 19.) A “few weeks” after RSL Ltd. decided to postpone the Telegate sale, the investment bankers working on the RSL Australia offering recommended that the IPO be “suspended” due to “soft capital market” conditions in Australia. (Defs.’ 56.1 ¶ 32.) On May 24, 2000, RSL Ltd. publicly announced the postponement of the RSL Australia IPO. (Amirfar Decl. Ex. 38.)
On May 25, 2000, members of RSL Ltd.’s management — including Defendants Fisher and Schiffman — met with representatives of Goldman Sachs to discuss the financial condition of RSL Ltd. and its future financing needs. (Pl.’s 56.1 ¶ 21; see also Dembrow Decl. Ex. T.) A Goldman Sachs memorandum regarding the May 25 meeting indicated that RSL Ltd. was pursuing a number of funding sources, including “[s]ale[s] of non-core subsidiaries,” other asset sales, a bridge loan, and a $300 million private placement that, “if successful,” would be completed within three weeks of the date of the meeting. (Dembrow Decl. Ex. T at GS/Bildirici 0019007.) The memorandum referenced a “cash flow model” and indicated that RSL Ltd. had informed Goldman Sachs that, “[i]f the private placement” being pursued by Chase Securities was “not successful, RSL [was] scheduled to run out of cash in November of [2000] assuming reduced capital expenditures.” (Id.)
One day after the meeting, in an email dated May 26, 2000 with the word “Cash” in the subject line, Defendant Schiffman, RSL Ltd.’s CFO, instructed the heads of all of RSL Ltd.’s operating subsidiaries that, “[i]n light of our tight cash position,” any capital expenditure would require the prior approval of both himself and RSL Ltd. COO Shassian. (Amirfar Decl. Ex. 41; see also Defs.’ 56.1 ¶ 34.) The email also “urgently” requested cash forecasts for the second, third, and fourth quarters of 2000. (Amirfar Decl. Ex. 41.)
5. June 2000: RSL Ltd. Continues to Restrict Its Subsidiaries’ Capital Expenditures
RSL Ltd.’s capital-raising difficulties were symptomatic of broader problems in the telecommunications industry. Although there are a number of potential explanations for the decline, including pricing pressure created by excess market entry (see Amirfar Decl. Ex. 133, Dep. of Eugene Sekulow at 93:20-25), it is undisputed that, by June 2000, investor optimism regarding the telecommunications sector had declined. (See Defs.’ 56.1 ¶ 47; PL’s 56.1 Opp’n ¶47; Bagby Opp’n Decl. Ex. 19, Dep. of Mark Hopkins at 126:13-15.) In addition to this market-wide trend, securities analysts began to express concerns regarding RSL Ltd.’s liquidity in light of the postponement of the RSL Australia IPO. (See Amirfar Decl. Ex. 67.) By the summer of 2000, the prices of RSL Ltd.’s stock and RSL Pic’s bonds both decreased “substantially.” (Defs.’ 56.1 ¶ 47.)
On June 8, 2000, Goldman Sachs provided a report to RSL Ltd. regarding “Funding Alternatives.” (Amirfar Decl. Ex. 47 at RSL PLC 0004024; see also Pl.’s 56.1 ¶ 23.) The Executive Summary of the presentation reiterated RSL Ltd.’s prediction, which RSL Ltd. had provided to Goldman Sachs on May 25, 2000, that “[b]ased on RSL’s most recent projections, the Company will run out of cash with its November 2000 interest payment” on the notes that were issued by RSL Pic. (Amir-far Decl. Ex. 47 at RSL PLC 0004027.) *193 Goldman Sachs recommended that additional financing might be obtained through private equity investment, a sale or merger of the entire RSL Group to a “strategic buyer,” a sale of one of the “crown jewel” RSL Group European subsidiaries such as RSL Spain or RSL Finland, or a transaction relating to RSL Australia. (Id.; see also Dembrow Decl. Ex. S at RSL PLC 0004037; Pl.’s 56.1 ¶ 23.) However, the slides from the presentation stated that “the immediacy of the cash need will mean dealing with financial buyers on potentially difficult and expensive terms,” and indicated that private equity investment would be the “[mjost feasible and immediate source” of funding. (Amirfar Decl. Ex. 47 at RSL PLC 0004027.)
Following the June 8 meeting with Goldman Sachs, the RSL Group conducted a “Global Finance Conference” on June 15 and 16, 2000. (See id. Ex. 42.) On the first day of the conference, Defendant Schiffman, RSL Ltd.’s CFO, gave a presentation titled “Cash is Kang” to the financial officers of RSL Ltd.’s operating subsidiaries. (See id. at RSL-PLC 005481; see also Defs.’ 56.1 ¶ 34.) The slides from the presentation indicate that Schiffman reiterated the orders from his May 26, 2000 email, including the requirement that all capital expenditures had to be authorized by himself and RSL Ltd. COO Shassian. (Amirfar Decl. Ex. 42 at RSL-PLC 005497.)
6. July 2000: The $100 Million Bridge Loan from Defendant Lauder
In response to the increasingly troubling financial outlook for the RSL Group, the RSL Ltd. Board held a meeting on June 29, 2000, which was attended by Defendants Lauder, Fisher, Schuster, and Sekulow. (See Amirfar Opp’n Decl. Ex. B.) At the meeting, Defendant Fisher, RSL Ltd.’s CEO, “delivered a presentation to the Board on the current state of the Company’s business, including progress on the sale of the Company’s non-core assets,” “status on the Company’s sources of financing,” and “the remaining steps required to finalize the Telegate transaction.” (Id. at RSL-GAC 0000146-47.) 8 The RSL Ltd. Board also discussed a potential IPO of the RSL Spain subsidiary, and RSL Ltd. COO Shassian gave a presentation regarding RSL Ltd.’s operations and results since July 1999, as well as “the Company’s strategies/objectives and challenges.” (Id. at RSL-GAC C0000147.) “Finally, [Defendant Shiftman, RSL Ltd.’s CFO,] gave a financial overview of the Company’s revenues, EBITDA, and cash forecast and described the actions being taken to improve the Company’s cash position.” (Id.)
At the conclusion of the meeting, the RSL Ltd. Board authorized its Executive Committee to “negotiate, review and, if appropriate, approve a standby loan agreement between [RSL Ltd.] and Ronald S. Lauder, upon fair and reasonable terms ....” (Id.) On July 7, 2000, the Executive Committee conducted a conference call to discuss the terms of the loan from Lauder. (Defs.’ 56.1 Opp’n ¶ 24; see also Amirfar Opp’n Decl. Ex. C.) Defendants Fisher, Schuster, and Sekulow participated in the call, and the Executive Committee approved the principal terms of the loan from Lauder. (Amirfar Opp’n Decl. Ex. C at RSL/DS 00713-14; see also id. at RSL/DS 00716-17 (“Summary of Principal Terms of Senior Standby Loan Facility”).) Lauder subsequently undertook to provide a $100 million bridge loan to RSL Pic, the repayment of which was guaranteed by RSL Ltd. (Defs.’ 56.1 ¶ 43.) The RSL Pic Board did not hold a separate meeting to *194 discuss the terms of the loan from Lauder. (PL’s 56.1 ¶ 24.)
On July 28, 2000, RSL Ltd. COO Shassian sent a memorandum to RSL Ltd.’s subsidiaries regarding “Cash Forecasts.” (Amirfar Decl. Ex. 43.) The memorandum identified several initiatives that were “underway to raise cash,” including acceleration of the Telegate sale, solicitation of private equity investments, and sales of RSL Australia, RSL Canada, and Delta-three, as well as “a $75M vendor finance facility” from Ericsson that would “be used to finance critical capital expenditures.” {Id. at RSL PLC 0001298.) Although Shassian indicated that he “fe[lt] very good” that the cash-raising initiatives would be successfully executed and that RSL Ltd.’s “ability to fund the business ha[d] a very high probability,” he warned that “it is imperative that we tighten our belts HARD.” {Id. at RSL PLC 0001299.) The memorandum amplified the message that was “communicated ... in May” and had been “repeatedly” offered by Defendant Shiftman: “[njobody is authorized to spend or commit to any capital expenditures regardless of whether you have cash in the bank or not,” “[w]e must stop our [capital expenditures] (both spending and future commitments) NOW!,” and “[a]ll discretionary (not absolutely critical) expenditures must be curtailed ____” {Id. (emphasis in original).) Finally, the memorandum directed the subsidiaries’ management that “[t]he basic premise ... to work under is that you will be receiving no cash from corporate until these asset monetizations are concluded.” {Id. (emphasis in original).)
7. The Fourth Quarter of 2000: The RSL Group Retains Insolvency Consultants
In early August 2000, Defendant Domorski replaced Defendant Fisher as the CEO of RSL Ltd. and as a member of the RSL Ltd. Board. (Defs.’ 56.1 ¶ 50.) Domorski and the RSL Ltd. Board agreed that he would evaluate the entire RSL Group before making recommendations regarding potential courses of action, and the RSL Ltd. Board did not meet while Domorski conducted the investigation. {Id. ¶¶ 50-51.) Thus, with the exception of an August 1, 2000 Audit Committee meeting and an October 5, 2000 Executive Committee meeting, the RSL Ltd. Board did not formally meet between late-July and early-November of 2000. {Id. ¶ 51.)
On September 28, 2000, the NASDAQ informed RSL Ltd. that its shares would be de-listed on December 29, 2000 if its common stock did not reach a minimum price of $5 per share for ten consecutive trading days between the date of the letter and December 27, 2000. (Dembrow Decl. Ex. JJ.) On October 5, 2000, Defendant Domorski presented a report to the Executive Committee of the RSL Ltd. Board regarding his initial evaluation of the RSL Group. (Defs.’ 56.1 ¶ 55.) Following the presentation, certain members of the Executive Committee — including Defendants Lauder and Schuster — contacted the law firm of Weil Gotshal & Manges (“Weil Gotshal”) regarding potential advice and representation in any future bankruptcy proceedings. {Id. ¶ 56.)
Beginning in November 2000 and continuing through March 19, 2001, the RSL Ltd. Board met twice per month. {Id. ¶ 58.) On November 7, 2000, the RSL Ltd. Board held a meeting in which it considered “certain potential asset sales, including the early monetization of Telegate, and the status of discussions with potential merger candidates.” (Amirfar Decl. Ex. 78 at RSL/DS 00832.) The RSL Ltd. Board also received presentations regarding insolvency issues under United States and Bermuda law from Jeffrey Weinberg of Weil Gotshal and Nicholas Trollope of the law firm Conyers Dill & *195 Pearman. (See id.; see also Defs.’ 56.1 ¶¶ 66-67.) After the presentation, the Board authorized RSL Ltd. to retain Weil Gotshal “as special counsel to the Company, to advise the Company on all legal matters relating to the Company’s restructuring effort .... ” (Amirfar Decl. Ex. 78 at RSL/DS 00832.) Additionally, based on Weil Gotshal’s recommendation, RSL Ltd. retained Henry Miller, a financial restructuring expert, and his firm, Wasserstein Perella & Co., Inc. (“Wasserstein”). (Id.)
Miller and other employees of Wasserstein gave a presentation to the RSL Ltd. Board at its November 14, 2000 meeting. (Defs.’ 56.1 ¶ 64.) Under the heading “Key Liquidity Considerations,” Wasserstein’s presentation indicated that RSL Ltd. could “continue to operate in the short term and explore strategic alternatives, if asset sales close and are monetized on an aggressive schedule and there is no further deterioration in operations.” (Amirfar Decl. Ex. 79 at LTDADD005630.) However, the presentation also stated that “[t]he Company will be unable to meet its obligations if asset sales do not proceed as planned.” (Id. at LTDADD005631.) The minutes from the November 14, 2000 meeting state that Wasserstein “advised ... that the Company must attempt to pursue all available options simultaneously in order to maximize franchise value; with a focus on business stabilization.” (Id. Ex. 80 at LTDADD003488.)
Subsequently, in December 2000, RSL Ltd. hired Keith Maib as its Chief Restructuring Officer, and retained Deloitte & Touche (“D & T”) to analyze its cash forecasts and financial projections. (Defs.’ 56.1 ¶ 65.) Between December 2000 and January 2001, RSL Ltd. also engaged the British and American offices of PricewaterhouseCoopers LLP (“PwC”) to advise the RSL Group regarding whether and when it would need to initiate insolvency proceedings. (Defs.’ 56.1 ¶ 65; see also PL’s 56.1 Opp’n ¶ 65; Amirfar Decl. Ex. 93 at RSLLtd2007-P005079; Bagby Opp’n Decl. Ex. 34.)
8. First Quarter 2001: The Commencement of Insolvency Proceedings
Between 2001 and 2003, “ ‘[ejvery independent, publicly traded carrier that depended on international [telejcommunications for the bulk of its revenue,’ ” including RSL Ltd., “ ‘filed for bankruptcy....’” (Defs.’ 56.1 ¶ 83 (quoting John B. Handley, Telebomb: The Truth Behind the $500-Billion Telecom Bust and What the Industry Must Do to Recover 163 (2005)); see also PL’s 56.1 Opp’n ¶ 83.) During that period, between $500 billion and $2 trillion of aggregate market value in the industry was lost. (Defs.’ 56.1 ¶ 83; see also PL’s 56.1 Opp’n ¶ 83; Amirfar Decl. Ex. 123, Dep. of Paul Domorski at 229:15-230:8.)
Although RSL Ltd. completed its sale of Telegate in January 2001, the anticipated repeal of Germany’s capital gains tax was not implemented prior to the sale, and a tax of approximately 42% was imposed on the proceeds. (See Defs.’ 56.1 ¶ 75; see also Amirfar Decl. Ex. 89.) In an attempt to address its ongoing lack of liquidity, RSL Ltd. initiated merger talks with several entities, including Primus Telecommunications and IDT Corp. (Defs.’ 56.1 ¶ 75.)
On January 22, 2001, the RSL Ltd. Board conducted a meeting, which included presentations by Chief Restructuring Officer Maib and PwC. (See Defs.’ 56.1 ¶ 78.) PwC advised RSL Ltd. that continuing to fund RSL Ltd.’s “core” subsidiaries and attempting to sell or shut down its “non-core” entities would provide “[p]otentially [the] highest return to creditors[]” but would also lead to “ongoing legal risks for directors.” (Amirfar Decl. Ex. 93 at RSLLtd2007-P005085-86.)
*196 By late February 2001, RSL Ltd.’s most viable remaining option for survival appeared to be a merger with IDT Corp. (See Defs.’ 56.1 ¶ 79.) A meeting of RSL Ltd.’s Board was conducted on February 28, 2001. (See Amirfar Decl. Ex. 94.) The minutes of the meeting reflect that Maib represented to the Board that “absent very near term substantial progress with IDT [Corp.] on a global transaction, the Company should prepare for an [insolvency] proceeding....” (Id. at RSL-FHL 0000051.) Following Maib’s presentation, the RSL Ltd. Board resolved to: (1) suspend the March 1, 2001 interest payment that was due on the notes issued by RSL Pic, and (2) “pursue all strategic alternatives available, including a sale of the Company to IDT Corp. and/or the preparation for insolvency proceedings .... ” (Id. at RSL-FHL 0000051-52.)
RSL Ltd. was unable to consummate the transaction with IDT Corp., and the minutes from the March 18, 2001 RSL Ltd. board meeting indicate that Maib recommended to the Board that the RSL Group initiate insolvency proceedings. (Amirfar Decl. Ex. 96 at RSL PLC/LTD 006410.) Maib stated that the paperwork had been prepared to initiate insolvency proceedings in the United Kingdom related to RSL Pic and a subsidiary known as RSL COM Europe, Ltd. (“RSL Europe”). (Id.) Finally, Maib stated that he was also prepared to commence a provisional liquidation of RSL Ltd. in Bermuda, as well as “ancillary proceedings” in the United States relating to RSL Ltd., RSL Pic, and RSL Europe, Ltd. (Id.)
The minutes of the March 18, 2001 RSL Ltd. board meeting reflect that it ended at approximately 6:50 p.m. (Id. at RSL PLC/ LTD 006411.) Following that meeting, the RSL Pic Board formally convened at approximately 7:00 p.m. in order to authorize the decision to file for insolvency administration in the United Kingdom. (Defs.’ 56.1 ¶ 82.) On March 19, 2001, RSL Pic sought insolvency protection under the United Kingdom Insolvency Act. (Id.) RSL Pic’s filing stated that it “[was] or [was] likely to become unable to pay its debts .... ” (Amirfar Decl. Ex. 98 at RSL PLC 0001797.)
B. Procedural History
In 2003, the joint administrators of RSL Pic initiated a proceeding in the United States Bankruptcy Court for the Southern District of New York, which was ancillary to RSL Pic’s insolvency administration in the United Kingdom. (Decl. of Michael John Andrew Jervis in Supp. of Pl.’s Mot. for Partial Summary Judgment ¶ 6.) On December 9, 2003, in connection with that ancillary proceeding, the joint administrators took the deposition of Defendant Bildirici. (Id.) Based on that deposition and an independent investigation, the joint administrators commenced this action on behalf of RSL Pic on July 2, 2004. (Id. ¶ 7.) The case was initially assigned to the Honorable Richard M. Berman, District Judge, and on September 29, 2006, it was reassigned to the Honorable Kenneth M. Karas, District Judge. (Doc. No. 8.)
On November 1, 2004, Defendants filed a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. No. 12.) Judge Karas denied the motion on September 15, 2006 (the “MTD Decision”).
See RSL Commc’ns PLC v. Bildirici,
No. 04 Civ. 5217(KMK),
*197 This matter was reassigned to the undersigned on September 4, 2007. (Doc. No. 52.) Discovery closed on October 23, 2007. (See Doc. No. 54.) On November 29, 2007, the parties filed cross-motions for summary judgment and motions in limine relating to the admissibility of certain evidence produced during expert discovery. 9 These motions were fully briefed as of January 30, 2008. (Doc. Nos. 76-80.)
The Court conducted oral argument regarding the motions on February 20, 2009. Following the argument, by Order dated February 23, 2009, the Court directed the parties to submit additional briefing regarding the causation element of Plaintiffs claims. (Doc. No. 86.) The parties filed their supplemental briefs on March 27, 2009. (“Pl.’s Supp. Mem.” and “Defs.’ Supp. Mem.” (Doc. Nos. 88, 90).)
On May 29, 2009, Plaintiff filed a motion to re-open discovery pursuant to Rule 56(f). (“Pl.’s 56(f) Mem.” (Doc. Nos. 97-98).) Defendant responded in opposition on June 12, 2009 (“Defs.’ 56(f) Opp’n” (Doc. No. 101)), and Plaintiff filed its reply on June 19, 2009 (Doc. No. 103).
II. Legal Standards
A. Governing Law
“[Fjederal courts sitting in diversity apply state substantive law ....”
Gasperini v. Ctr. for Humanities, Inc.,
B. Summary Judgment
In a motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure, the moving party bears the burden of showing that he or she is entitled to summary judgment.
See Huminski v. Corsones,
“A dispute about a ‘genuine issue’ exists for summary judgment purposes where the evidence is such that a reasonable jury could decide in the non-movant’s favor.”
Beyer v. County of Nassau,
III. Discussion
The central allegations in this case are that “Defendants never took any action whatsoever to approve or disapprove of RSL Ltd. or the [RSL Group] affiliates’ continued use of RSL Pic’s money” or “to consider the interests of RSL Pic or its *198 creditors.” (Compl. ¶ 3.) Based principally on these allegations, Plaintiff brings two claims for breaches of fiduciary duty. First, Plaintiff alleges that Defendants breached “fiduciary duties, including a fiduciary duty of care, to [RSL Pic] and its constituents.” (Id. ¶ 71.) Second, Plaintiff asserts that Defendants also breached an allegedly independent “fiduciary duty of care ... to [RSL Pic’s] creditors, since by March of 2000, RSL Pic was either insolvent or within the zone of insolvency.” (Id. ¶ 78.) In both of these claims, Plaintiff seeks to recover “the value of the assets of RSL Pic that should have been preserved for the benefit of creditors, but instead were either spent during the period from March 2000 through December 2000, or which were not sold or realized during year 2000.” (Id. ¶ 82; see also id. ¶ 75.)
With respect to the cross-motions for summary judgment, the Court concludes that: (1) factual disputes regarding the nature and extent of Defendants’ actions on behalf of the RSL Group and RSL Pic preclude the application of the business judgment rule; (2) Plaintiff has failed to provide sufficient authority under New York law to sustain a cause of action based on the existence of a duty of care owed by directors of a corporation to the corporation’s creditors while the corporation allegedly operates in the so-called “zone of insolvency”; and (3) Plaintiff has failed to adduce a non-speculative evidentiary basis to support a conclusion that Defendants’ conduct caused its losses.
As to Plaintiffs motion to conduct additional expert discovery pursuant to Rule 56(f), Plaintiff has not demonstrated that it is entitled to the relief it now seeks. Specifically, the request is untimely, Plaintiff has failed to adequately explain why it did not elicit the sought-after supplemental expert opinions during the time allotted to the parties to conduct discovery, and the proposed discovery would not address the principal defect in Plaintiffs causation theory. Accordingly, for the reasons set forth below, both of Plaintiffs motions are denied, and Defendants’ motion for summary judgment is granted.
A. The Business Judgment Rule
Defendants argue that they are entitled to the protections of the business judgment rule with respect to any potential liability arising out of their actions as directors of RSL Pic. (Defs.’ Mem. at 47-49; Defs.’ Opp’n at 15-17.) Relying on the “law of the case” doctrine, Plaintiff argues that Defendants are precluded by the MTD Decision from invoking this defense to either of its causes of action. (Pl.’s Opp’n at 41-42; PL’s Mem. at 22.)
The Court is not persuaded by the arguments of either party. For the reasons stated below, because there are factual disputes regarding the actions taken by Defendants and the capacity in which those actions were taken, the application of the business judgment rule cannot be resolved at the summary judgment phase of this litigation.
1. Applicable Law
“Under New York law, the business judgment rule ‘bars judicial inquiry into actions of corporate directors taken in good faith and in the exercise of honest judgment in the lawful and legitimate furtherance of corporate purposes.’ ”
In re 1st Rochdale Co-op Group, Ltd.,
No. 07 Civ. 7852(DC),
*199
“At the same time, to earn the protection of the business judgment rule, directors must do more than merely avoid fraud, bad faith, and self-dealing.”
In re 1st Rochdale Co-op Group, Ltd.,
Thus, a director “does not exempt himself from liability by failing to do more than passively rubber-stamp the decisions of the active managers.”
Barr v. Wackman,
36 NY.2d 371, 381,
2. Analysis
Plaintiff argues that the MTD Decision precludes the subsequent application of the business judgment rule in this matter. (Pl.’s Opp’n at 42.) In support of this assertion, Plaintiff relies on Judge Karas’s comment that, “if the facts are as described by Plaintiff, it cannot be said, and Defendants have cited no authority to say, that as a matter of law Defendants should be immunized by the business judgment rule.”
Bildirici,
First, Plaintiff seeks to imply a ruling on the merits in its favor from language that merely denied a portion of Defendants’ motion to dismiss. The MTD Decision reasoned that Defendants were not entitled to judgment as a matter of law — i.e., dismissal of Plaintiffs claims pursuant to Rule 12(b)(6) — because they had not cited a case where the business judgment rule had been applied to insulate a defendant from allegations that he or she had failed to act on behalf of a corporation. In resolving that issue against Defendants, Judge Karas did not grant “judgment as a matter of law” in Plaintifs favor or rule that the business judgment rule is inapplicable in this litigation. Thus, Plaintiffs argument on this point is neither logically nor legally sound.
Second, one of the primary assumptions underlying Judge Karas’s ruling on this issue is no longer supported by the evidentiary record. Specifically, in resolving Defendants’ motion, Judge Karas properly assumed the truth of Plaintiffs allegations. The language of his holding — “if the facts are as described by Plaintiff,” id. (emphasis added)-indicates that the ruling was contingent upon that assumption. Now, following discovery, it is clear that the Complaint contains several colorfully worded allegations that are inconsistent with the evidence in this case. For example, Plaintiff alleged that Defendants engaged in a “continuing] ... practice of abdicating [their] duties,” and “never took any action whatsoever to approve or disapprove of RSL Ltd. or the affiliates’ continued use of RSL Pic’s money.” (Compl. ¶¶ 3, 6 (emphasis added).) Notwithstanding these allegations, the record before the Court indicates that Defendants played active roles within the RSL Group.
During the time that they were affiliated with the RSL Group, Defendants Fisher, Domorski, Shiffinan, and Bildirici were executives of RSL Ltd. (Defs.’ 56.1 ¶ 11.) Defendants Lauder, Schuster, Sekulow, Fisher, and Domorski also served as di *200 rectors of RSL Ltd. (Id.) Moreover, the RSL Ltd. Board met eight times during 2000: January 12, March 28, June 29, July 27, November 7, November 14, December 7, and December 18. (Defs.’ 56.1 ¶ 13.) Defendants Fisher, Domorski, and Schiffman attended each RSL Ltd. board meeting in 2000 while they were employed at the RSL Group. (Id.) Defendant Sekulow missed one meeting, and Defendant Bildirici missed three. (Id.) In addition to the board meetings, these Defendants participated in sixteen actions of the RSL Ltd. Board through unanimous consent during 2000. (See Pl.’s 56.1 Opp’n ¶ 16.)
Some Defendants also served on committees of the RSL Ltd. Board. Defendants Schuster and Sekulow served on the Audit Committee, and Defendants Lauder, Schuster, Sekulow, and Fisher were members of the Executive Committee. (Defs.’ 56.1 ¶¶ 14-15.) Defendants Schuster and Sekulow attended each of the Audit Committee’s meetings during 2000, which were held on March 1, May 8, August 1, and November 7. (Id. ¶ 15.) The Executive Committee met on January 6, March 1, March 17, July 7, and October 5, 2000. (Id. ¶ 14.) Defendants Lauder and Sekulow attended each of these meetings, Defendant Fisher attended the meetings that occurred while he was the CEO of RSL Ltd., and Defendant Schuster missed only one meeting. (Id.)
Finally, although no RSL Ltd. board meetings were held between August and October 2000, Plaintiff concedes that the purpose of the break was to permit the new CEO of RSL Ltd., Defendant Domorski, to “undertake a thorough evaluation of [RSL Ltd.] — -including traveling to multiple subsidiaries, all also subsidiaries of [RSL] Pic — before making recommendations on how to proceed.” (Id. ¶ 50 (emphasis added).)
Thus, the record evidence of Defendants’ activities and roles within the RSL Group is sufficient to call into question Plaintiffs allegations that Defendants acted with “complete inattention to how and the circumstances under which RSL Pic’s money was being spent,” and “failed to take any action to preserve RSL Pic’s funds, or have any participation in how the RSL Group would use RSL Pic’s money.” (Compl. ¶¶ 8, 11.) Therefore, because the MTD Decision’s discussion of the business judgment rule assumed the truth of Plaintiffs allegations, and because there are now, at minimum, factual disputes as to the truth of those allegations, the prior ruling has no binding effect on the Court in resolving the parties’ summary judgment motions.
However, Defendants’ arguments regarding the business judgment rule are similarly unavailing. Defendants are named in this litigation as directors of RSL Pic, and the applicability of the business judgment rule cannot be resolved through summary judgment based on the actions that they took in their other capacities within the RSL Group. These functional distinctions are relevant to the availability of this legal defense.
See, e.g., Hanson Trust,
Consequently, there are factual disputes regarding the extent to which Defendants, acting in their capacity as directors of RSL Pic, exercised their business judgment specifically on behalf of Plaintiff. Although the evidence of the actions taken by Defendants in their other roles at the RSL Group is relevant to the analysis of the causation element of Plaintiffs claims, see infra Part III.C.2.b, the factual disputes regarding the capacity in which Defendants acted preclude them from successfully relying on a blanket application of the business judgment rule. Accordingly, Defendants’ motion for summary judgment is denied insofar as it is predicated on invoking the business judgment rule as a defense to either of Plaintiffs claims.
B. The “Zone of Insolvency”
Plaintiff concedes that there are disputed issues of fact regarding the date on which RSL Pic became insolvent. (See Tr. of Oral Argument, Feb. 20, 2009 (“Tr.”) at 30:16-31:1.) However, it seeks summary judgment on the issue of whether Defendants owed a duty of care to the creditors of RSL Pic while it was operating in the “zone of insolvency.” (See Pl.’s Mem. at 15-17.) Defendants cross-move for summary judgment, arguing, inter alia, that they owed no such duty prior to RSL Pic’s insolvency. (Defs.’ Mem. at 35-41.)
For the reasons set forth below, the Court concludes that there is no support under New York law for Plaintiffs “zone of insolvency” theory of liability. Accordingly, Plaintiffs motion for summary judgment on this issue is denied, and Defendants’ motion is granted to the extent that Plaintiffs claims are based on allegations that Defendants breached fiduciary duties owed to RSL Pic’s creditors prior to RSL Pic’s insolvency.
1. Applicable Law
In New York, a director is required to “perform his [or her] duties ..., in good faith and with that degree of care which an ordinarily prudent person in a like position would use under similar circumstances.” N.Y. Bus. Corp. Law § 717(a);
see also Hanson Trust,
Such an owner “is an adventurer in the corporate business; he [or she] takes the risk, and profits from success.”
Comm’r of Internal Revenue v. O.P.P. Holding Corp.,
Moreover, the duty that directors owe to the creditors of an insolvent corporation under New York law is defined primarily by the “trust fund doctrine.”
See Credit Agricole Indosuez v. Rossiyskiy Kredit Bank,
2. Analysis
According to Plaintiff, RSL Pic was in the “zone of insolvency” for a period of between thirty and sixty days during May and June 2000, and Defendants owed RSL Pic’s creditors a fiduciary duty of care during that period. (See Pl.’s Mem. at 15; Nov. 28, 2007 Aff. of Steven G. Panagos In Support of Pl.’s Mot. for Partial Summary Judgment (“Panagos Aff.”) Ex. A, July 27, 2007 Export Report of Steven G. Panagos (“Panagos Expert Report”) at 17-20, 29.) However, in the portion of his Expert Report relating to this subject, Plaintiffs expert, Steven G. Panagos, did not define the term “zone of insolvency,” and instead cited a series of events that he believed indicated that RSL Pic was operating in this “zone” by May 2000. (Panagos Expert Report at 17-18.) In an affidavit submitted in support of Plaintiffs motion for partial summary judgment, Panagos pointed more specifically to four events that led him to this conclusion: (1) in mid-2000, RSL Ltd. and RSL Pic were “having *203 difficulties raising financing to address their liquidity needs” (Panagos Aff. ¶ 5); (2) during May and June 2000, RSL Pic’s public notes were “trading well below par value” (id.); (3) RSL Ltd. delayed the IPO of RSL Australia in late-May of 2000 “because of market conditions” (id. ¶ 6); and (4) on June 8, 2000, Goldman Sachs warned the RSL Ltd. Board that it “was projected to run out of cash by November 2000” (id.). On the basis of this ex-post analysis from its expert, Plaintiff urges the Court to conclude that RSL Pic was in the “zone of insolvency” “[b]y May of 2000,” and that, after that date, Defendants owed fiduciary duties of care to RSL Pic’s creditors. (See Pl.’s Mem. at 15.) 10
In connection with this amorphous definition of the “zone of insolvency,” Plaintiff has suggested two alternative bases for its claim that Defendants owed fiduciary duties to RSL Pic’s creditors during this period. In its first cause of action, Plaintiff alleges that Defendants owed fiduciary duties to RSL Pic and “its constituents.” (ComplJ 71.) Under this theory, according to Plaintiff, upon RSL Pic’s entry into the “zone of insolvency” the constituency of stakeholders in the enterprise broadened to include RSL Pic’s creditors: “[Ojnce [RSL] Pic entered the zone of insolvency, [RSL] Pic’s directors owed its creditors the same duty of care the directors previously owed only to [RSL] Pic and its shareholders, without any limitations.” (Pl.’s Opp’n at 35.) In its second cause of action, Plaintiff alleges that Defendants breached “fiduciary dut[ies] of care” to “exercise independent judgment on behalf of [RSL Pic’s] creditors,” suggesting that these duties were separate from Defendants’ fiduciary duties to RSL Pic and its other constituents. (See Compl. ¶ 78.) 11
Both of Plaintiff’s theories must fail because neither is supported by New York law. Specifically, New York State’s corporate directors do not owe a duty of care to a corporation’s creditors when the corporation is arguably operating within the “zone of insolvency,” as that term has been defined by Plaintiff in this litigation. In light of the other legal protections afforded to creditors, the Court rejects Plaintiffs attempt to extend directors’ fiduciary duties in this fashion.
Recognizing the dearth of support for its position, Plaintiff contends that the primary legal authority for its “zone of
*204
insolvency” theory is the MTD Decision, and it again relies heavily on the “law of the case” doctrine.
(See
Tr. at 7:8 — 9:3; Pl.’s Mem. at 15; Pl.’s Opp’n at 14-19.) This argument is unavailing. “ ‘The law of the case doctrine ... does not preclude this Court from reconsidering issues on summary judgment that have initially been raised in the context of a motion to dismiss.’ ”
RSL Commc’ns, PLC v. Bildirci,
No. 04 Civ. 5217(RJS),
The paragraph in the MTD Decision discussing the “zone of insolvency” cited only one case, using a “cf.” signal, that applied New York law:
Clarkson Co. v. Shaheen,
In re Adelphia Communications Corp.,
Only after making those observations did the Adelphia court use — in a footnote' — the language relied on in the MTD Decision:
Many courts, including the Second Circuit, this one, and the state courts from which the applicable principles have their origin, have said that when a corporation becomes insolvent or enters into the zone of insolvency, the fiduciary duties of a corporation expand from its stockholders to its creditors.
Id.
However, the authority cited by the
Adelphia
court does not compel the conclusion sought here by Plaintiff. The only Second Circuit case it cited,
In re STN
*205
Enterprises,
In the same footnote, the
Adelphia
court characterized the above-quoted “zone of insolvency” proposition as “useful shorthand” for a “more precise formulation” proffered by Vice Chancellor Leo E. Strine of the Delaware Court of Chancery: “ ‘[T]he directors’ obligations are
‘to the firm itself’ ” In re Adelphia Commc’ns Corp.,
While directors continue to have the task of attempting to maximize the economic value of the firm, the fact of insolvency “affect[s] the constituency on whose behalf the directors are pursuing that end,” and “places the creditors in the shoes normally occupied by the shareholders — that of residual risk-bearers.” Where the remaining equity is under water, whatever remains of the company’s assets will be used to pay creditors, usually either by seniority of debt or on a pro rata basis among debtors of equal priority.
Id.
(emphasis added) (quoting
Prod. Res. Group,
Nevertheless, perhaps because — in Plaintiffs words — “there is not a case under New York law that has fully analyzed [these] issues” (Tr. at 8:12-13), much ink has been spilled in the parties’ submissions regarding the pronouncements of the Delaware courts. It goes without saying that, while the Court is not obligated to
*206
follow Delaware law in this matter, many courts — including this one — appropriately look to the views of Delaware’s learned jurists when analyzing issues of corporate law. Although the Delaware cases cited by Defendants, which involved direct claims by creditors, are distinguishable from the case at hand (in which the claims are, at least nominally, brought on behalf of RSL Pic), it is true that Delaware courts have opined on the appropriate extent of directors’ fiduciary duties to creditors when a corporation enters the “zone of insolvency.”
See, e.g., N. Am. Catholic Educ. Programming Found., Inc. v. Gheewalla,
First, in response to the vague definition of the “zone of insolvency” proffered by Plaintiff, the Court agrees with the Delaware Supreme Court’s position in
Ghee-walla,
Second, the existence of such a duty could permit direct claims by the creditors of a solvent corporation, which would hinder the efforts of officers and directors to fulfill their obligations to all of the stakeholders in the enterprise. Hypothetically, a group of creditors could commence litigation against the directors of a corporation that is arguably in the “zone of insolvency,” despite the fact that the corporation in question is solvent and may never actually become insolvent. Such pre-insolvency litigation with creditors would risk, if not require, instances in which corporate officers and directors must divert their collective focus from the corporation’s shareholders and their reasonable efforts to repay the debts at issue. Indeed, the expenditure of resources on creditor-initiated litigation could prevent the debtor-corporation from escaping this treacherous “zone” by avoiding insolvency altogether.
See generally Prod. Res. Group,
Finally, recognizing a fiduciary duty of care to creditors when a corporation enters the “zone of insolvency” would “involve[ ] using the law of fiduciary duty to fill gaps that do not exist.”
Prod. Res. Group,
Prior to the time at which creditors enter into a formal relationship with a corporation, they may bargain for contractual protections such as liens on corporate assets.
See, e.g., Lorenz v. CSX Corp.,
Therefore, in sum, Plaintiff has adduced no support under New York law for its argument that Defendants owed a fiduciary duty of care, “without any limitations” (PL’s Opp’n at 35), to RSL Pic’s creditors during the thirty-to sixty-day period in which Plaintiff argues that RSL Pic was in the “zone of insolvency.” The Court has analyzed the merits of this position, and concludes that Plaintiffs “zone of insolvency” theory does not stand to reason. “The incantation of the ... words zone of insolvency should not declare open season on corporate fiduciaries.”
Trenwick Am. Litig. Trust,
C. Causation
Plaintiff also moves for summary judgment as to the causation elements of its claims, arguing that Defendants were “the only persons” who “could have acted to preserve the value of RSL Pic’s assets,” and therefore Defendants’ “inaction necessarily was the cause of damages suffered by RSL Pic and its creditors.” (PL’s Mem. at 29 (emphasis added).) Defendants cross-move for summary judgment on the causation element of both of Plaintiffs claims, arguing that the cause of Plaintiffs losses “was not the absence of formal [RSL] Pic board meetings, but an industry meltdown that bankrupted literally every company in [the RSL Group’s] sector.” {See Defs.’ Mem. at 75.)
*208 For the reasons stated below, the Court concludes that Plaintiff has failed to adduce sufficient evidence that Defendants’ alleged breaches of fiduciary duty were a factual, “but for” cause of the losses for which Plaintiff seeks damages. Accordingly, for the reasons set forth below, Plaintiffs motion for partial summary judgment is denied, Defendants’ motion for summary judgment is granted, and the remainder of Plaintiffs claims are dismissed.
1. Applicable Law
In a breach of fiduciary duty claim “[w]here ... the remedy sought is damages to compensate for a claimant’s loss, the usual damages-causation rule for tort and contract breach cases is appropriate .... ”
Am. Fed. Group, Ltd. v. Rothenberg,
These are not novel concepts. “[C]ausation has been ‘a well-recognized and essential element of the [tort] plaintiffs case in chief since at least the early 17th century, and probably much, much before.”
Williams v. KFC Nat’l Mgmt. Co.,
“But for” causation, which the Court refers to as “factual causation,” presents a “threshold question” of whether the alleged breach of fiduciary duty was a “cause in fact” of the loss complained of by the plaintiff.
Semi-Tech Litig.,
*209 But-for causation is a hypothetical construct. In determining whether a particular factor was a but-for cause of a given event, we begin by assuming that that factor was present at the time of the event, and then ask whether, even if that factor had been absent, the event nevertheless would have transpired in the same way.
Price Waterhouse v. Hopkins,
However, courts have developed a test— dubbed, somewhat misleadingly, the “substantial factor” test — that may be applied where there are multiple potential causes of a single harm.
See, e.g., Rodriguez v. Budget Rent-A-Car Sys., Inc.,
The second aspect of the causation inquiry — “proximate cause, or more appropriately legal cause” — “has proven to be ... incapable of being precisely defined to cover all situations.”
Derdiarian v. Felix Contracting Corp.,
51 NY.2d 308, 314,
2. Analysis
“One of the primary and completely legitimate purposes of incorporating is to limit or eliminate the personal liability of corporate principals.”
Goldman v. Chapman,
“[I]n the usual case, it is undisputed that the complained-of loss would not have occurred had the defendant not committed the relevant breach.”
Semi-Tech Litig.,
Plaintiffs theory of causation proceeds as follows:
Defendants, as directors of RSL Pic, were the only persons who could have acted on RSL Pic’s behalf .... Moreover, ... the collective market value of RSL Pic’s operating subsidiaries in March 2001 was less than their value in June 2000. Thus, the failure of the Defendants to take any action to protect RSL Pic in the year 2000 must have been, as a matter of law, a substantial factor in causing the admitted decline in value of RSL Pic’s assets, and the resulting damages suffered by RSL Pic and its creditors.
(PL’s Mem. at 31-32 (internal citations omitted); see also Tr. at 33:20-24 (Plaintiffs counsel summarizing this theory and characterizing it as “pretty simple”); PL’s Supp. Mem. at 5-6 (arguing that the evidence of causation is sufficient to satisfy its burden of demonstrating both factual and legal causation).)
*211
In support of its causation argument, Plaintiff places significant emphasis on the opinion expressed in the Panagos Expert Report. Providing evidence through expert opinions is, of course, an entirely permissible manner of proceeding, both in a motion for summary judgment and at trial.
See, e.g., LNC Invs., Inc. v. First Fidelity Bank,
No. 92 Civ. 7584(CSH),
Turning to this evidence, Panagos’s expert opinion as to causation proceeds on the basis of two premises. First, in his view, “a board of directors exercising its fiduciary duties would have had frequent meetings” in order to “deliberate[ ] on the courses of action [RSL Pic] should take to improve its financial condition____” (Panagos Expert Report at 26.) Second, at such meetings, reasonable “directors exercising [their] fiduciary duties would ... consider” issues relating to the financial health and strategic plans of RSL Pic. (Id.) Based on these premises, Panagos offered the conclusion that, if Defendants had held meetings of the RSL Pic Board, then those deliberations “could have enabled the board of directors to take” actions that “would have preserved significant value for RSL Pic’s creditors .... ” (Id. at 27 (emphasis added).)
Plaintiff summarizes this opinion as follows: (1) Defendants “should have held frequent meetings” on behalf of RSL Pic; (2)there were a number of issues that Defendants “should have” considered at such meetings; and (3) if Defendants had considered those issues, then they “might have ‘[s]old the [RSL Pic] Operating Subsidiaries to preserve value for [RSL] Pic and its creditors and shareholders,’ and ‘[significantly reduced cash outflows of [RSL] Pic as soon as possible.’ ” (Pl.’s Opp’n at 72 (emphasis added) (quoting Panagos Expert Report at 27).)
The Court discusses each of these three assertions in turn below. The legal merit of Plaintiffs first premise, which posits that Defendants breached their fiduciary duties by failing to hold “frequent” meetings of the RSL Pic Board, is somewhat dubious. Nevertheless, the Court assumes, arguendo, that Plaintiff is correct. The second premise, which relates to a series of issues that reasonable directors would have considered, fails to account for the record evidence that Defendants did consider these issues as they related to the RSL Group as a whole. Finally, the Court finds that the conclusion that Plaintiff draws from these premises— that Defendants “might have” caused RSL Pic to sell its subsidiaries or implement additional restrictions on subsidiary funding — is fatally speculative in terms of establishing factual causation.
a. Premise 1: Defendants Should Have Held Frequent Meetings of the RSL Pic Board
The first premise upon which Plaintiff rests its causation theory is the opinion of its expert that “a board of directors exercising its fiduciary duties would have held frequent meetings ... [to] deliberate[ ] on the courses of action the company should take to improve its financial condition *212 .... ” (Panagos Expert Report at 26; see also Pl.’s Opp’n at 72.) This component of the Panagos Expert Report is relevant to when and whether Defendants breached fiduciary duties to Plaintiff and its creditors in the year 2000. (See, e.g., Tr. at 26:4-6 (Plaintiffs counsel noting that the “[fjailure to have meetings, whether formal or informal, to specifically consider the interests of [RSL] Pic, that failure is a breach”).) However, here again, Plaintiffs assertions as to the scope of Defendants’ fiduciary duties are overly broad.
First, the Court rejects any suggestion that the RSL Pic Board was required by law to hold “frequent” meetings. Plaintiffs have not identified any decision for which the approval of the RSL Pic Board was legally required but not given. Moreover, in recognition of the fact that sound corporate governance may not require formal meetings each time an action of a corporate board is necessary, section 708(b) of New York’s Business Corporation Law expressly permits “action[s] required or permitted to be taken by the board or any committee thereof’ to be consummated by written consent. N.Y. Bus. Corp. Law § 708(b). For example, the RSL Pic Board approved the February 2000 debt offering in this fashion. (See Bagby Opp’n Decl. Ex. 28.) This practice “permits much of the management of a modern corporation to be conducted by consent,” which “reflects the modern practice in both public and close corporations. It obviates scheduling conflicts and facilitates actions by the board of directors .... ” Isidore Kantrowitz & Sol Slutsky, 2 White: New York Business Entities ¶ B708.02 at 7-75 & n. 2 (14th ed.2004).
“Courts are not to shut their eyes to the realities of business life.”
Leslie, Semple & Garrison, Inc. v. Gavit & Co., Inc.,
Second, while RSL Pic was solvent, Defendants’ fiduciary duties required that RSL Pic be managed for the benefit of RSL Ltd.
Cf. Trenwick Am. Litig. Trust,
Finally, although the parties disagree as to the timing of RSL Pic’s insolvency, there is no dispute that Defendants’ fiduciary obligations changed when RSL Pic became insolvent and that the interests of RSL Pic’s creditors became relevant at that time. Nevertheless, it cannot be said, as Plaintiff has suggested, that Defendants’ duties of care required them to sell RSL Pic’s subsidiaries. To the contrary, “there is no absolute duty under American law to shut down and liquidate an insolvent corporation.”
In re Global Serv. Group, LLC,
Nevertheless, in order to isolate the causation analysis, the Court assumes, without deciding, that Defendants breached their duties of care by failing to engage in additional deliberations — formal or otherwise — regarding the specific interests of RSL Pic during the year 2000.
{See
Pl.’s 56.1 ¶ 40;
see also
Pl.’s Supp. Mem. at 6.) The Court further assumes the truth of Plaintiffs contention that RSL Pic was insolvent as of June 30, 2000, and that Defendants subsequently breached their duty to consider the interests of RSL Pic’s creditors after that date.
{See
Panagos Expert Report at 4, 14.) However, “[i]t is easy to say that [Defendants] should have done something. But that will not serve to harness upon [them] the whole loss, nor is it the equivalent of saying that, had [they] acted, the company would now flourish.”
Barnes,
b. Premise 2: Issues That Defendants Should Have Considered
The second premise underlying Plaintiffs causation theory is that reasonable directors of RSL Pic “exercising [their] fiduciary duties would [have] ... considered], among other things”: an operating budget for 2000, a longterm business plan, internal controls, “asset divestiture options such as sales and IPOs,” “whether the incurrence of additional debt was necessary and feasible,” “the ability to repay creditor obligations considering asset values and operating trends,” and “[d]ecisions to fund RSL Ltd. subsidiaries that were not part of RSL Pic .... ” (Panagos Expert Report at 26; see also Pl.’s Opp’n at 72.)
However, as discussed above, see supra Part III.A.2, the record suggests that Defendants played active roles within the RSL Group. Moreover, there is also evidence that Defendants took into consideration the very issues identified by Plaintiffs expert. Indeed, Plaintiffs expert acknowledged at his deposition that, based on his review of the record, “in general, it looked like” Defendants, acting as fiduciaries of RSL Ltd., “addressed these issues and had some level of deliberation on many of these issues.” (Bagby Decl. Ex. 17, Dep. of Steven Panagos at *214 236:12-15.) Thus, although the Panagos Expert Report does not account for this evidence — apparently because Panagos “was not asked to specifically review the actions taken by the [RSL] Ltd. Board” (Panagos Aff. Ex. B. at 25) — the Court declines to simply ignore it when assessing Plaintiffs causation argument.
For example, Panagos asserted that Defendants should have considered a “2000 operating budget and a long-term business plan” for RSL Pic. (Panagos Expert Report at 26.) However, RSL Ltd.’s March 2000 Business Plan set forth a comprehensive five-year business strategy for the RSL Group, including a commitment to focusing on RSL Pic’s subsidiaries — the “core” RSL Group subsidiaries in North America and Europe. (See Dembrow Decl. Ex. R at RSL PLC 0003902.) As part of that Plan, RSL Ltd. compiled and presented consolidated financials for these “core” entities. (See id. (“[T]he accompanying five-year plan only reflects the results of [the RSL Group’s] operations in Europe and North America.”); see also id. at RSL PLC 0003925-3928 (financials for RSL North America); id. at 0003943-3947 (financials for RSL Europe).) The remaining RSL Group subsidiaries, which were not subsidiaries of RSL Pic, were characterized as “non-core.” (Id. at RSL PLC 0003902.) The Plan did not include financials for those entities, and it indicated that the RSL Group was “looking to monetize some or all” of them. (Id.)
Panagos also opined that RSL Pic should have “[a]nalyze[d] asset divestiture options,” the “overall state of the company’s financial condition,” and the “company’s business strategy ... in light of the issues facing the company .... ” (Panagos Expert Report at 26.) However, on May 25, 2000, Defendants Fisher and Schiffman, as well as other employees of RSL Ltd., attended a meeting with representatives from Goldman Sachs regarding the same sort of issues that Plaintiffs expert suggests should have been discussed by the RSL Pic Board. (See Dembrow Deck Ex. T.) There is evidence that the topics at this meeting included RSL Ltd.’s planned expenditures for the remainder of 2000, the status of its pending efforts to raise capital and increase liquidity, and its future plans for funding sources. (See id. at GS/Bildirici 0019006-19007.) Additionally, at the meeting, “RSL conveyed that [it] would like Goldman Sachs to do a formal analysis of their financial alternatives in light of this information and be able to discuss this the week of June 5th.” (Id. at GS/Bildirici 0019007.)
The slides from the subsequent Goldman Sachs presentation to RSL Ltd., which are dated June 8, 2000, reflect that RSL Ltd.’s management and board — including Defen dants — were made aware of the changing market conditions in the telecommunications industry and considered the potential impact of the changes on the March 2000 Business Plan. (See Amirfar Deck Ex. 47.) The slides indicate that RSL Ltd. had updated its cash projections, reevaluated its financing sources, and was aware that “[biased on RSL’s most recent projections, the Company will run out of cash with its November 2000 interest payment.” (Id. at RSL PLC 0004027 (emphasis added).)
With respect to the “recoverability of future advances to RSL Pic subsidiaries” (Panagos Expert Report at 26), the record likewise indicates that this issue was considered by RSL Ltd.’s management. On May 26, 2000, Defendant Sehiffman communicated to the heads of all of RSL Ltd.’s operating subsidiaries — including the subsidiaries of RSL Pic- — that “we need to implement certain cash controls, effective immediately.” (Amirfar Deck Ex. 41; see also Defs.’ 56.1 ¶ 34.) The email also stated that “[i]f any of you are unable to collect on any of your inter-company re *215 ceivables please let me know immediately,” and “urgently” requested updated quarterly cash forecasts for the remainder of 2000. (Amirfar Deck Ex. 41.)
On June 15, 2000, Schiffman reiterated this strategy in a presentation titled “Cash is King,” which was given at the “Global Finance Conference” of the RSL Group. (See id. Ex. 42; Defs.’ 56.1 ¶ 34.) RSL Ltd.’s COO, Donald Shassian, provided an additional reminder of the need to preserve funds to the RSL Group’s operating subsidiaries through a July 28, 2000 memorandum. (See Defs.’ 56.1 ¶ 35.) The import of these actions is clear — neither the RSL Group nor Defendants ignored RSL Pic and its subsidiaries as the conditions in the telecommunications market changed for the worse.
Plaintiff argues that the evidence of Defendants’ consideration of the issues outlined by Panagos on behalf of RSL Ltd. is irrelevant. In support of this argument, Plaintiff asserts that RSL Pic board meetings would not have been duplicative of the efforts of RSL Ltd.’s management because: (1) RSL Ltd. had additional subsidiaries that were not subsidiaries of RSL Pic, and (2) RSL Ltd. and RSL Pic had different sets of creditors. (Pb’s Opp’n at 46-50.) Neither of these contentions is persuasive with respect to the issue of whether Defendants’ failure to convene the RSL Pic Board caused Plaintiffs losses.
First, Plaintiff argues that RSL Ltd. had subsidiaries that it was required to take into consideration that were not affiliated with RSL Pic. Relatedly, Panagos suggested that Defendants, as RSL Pic directors, should have deliberated regarding whether it was appropriate “to fund RSL Ltd. subsidiaries that were not part of RSL Pic.” (Panagos Expert Report at 26.) It is conceivable that the interests of RSL Pic and RSL Ltd. might have diverged with respect to the question of whether RSL Pic funds should have been provided to RSL Ltd. subsidiaries that were not affiliated with RSL Pie, i.e., the “non-core” subsidiaries identified in the March 2000 Business Plan. However, although there is evidence that, generally speaking, funds raised in the RSL Pic debt offerings were administered by RSL Ltd. and used to fund the subsidiaries of the RSL Group (see Defs.’ 56.1 ¶ 7; see also Hopkins Report at 14-15), Plaintiff points to no evidence that funds raised by RSL Pic were provided to non-RSL Pic subsidiaries between March and December 2000 (see Defs.’ 56.1 ¶ 88; Pb’s 56.1 Opp’n ¶ 88). This is not surprising in light of RSL Ltd.’s commitment in the March 2000 Business Plan to focus on “core” entities that were subsidiaries of RSL Pic. (See Dembrow Deck Ex. R at 0003902.) Therefore, Plaintiffs assertion that funds raised in RSL Pic’s debt offerings might have been provided to non-RSL-Plc subsidiaries is unavailing.
Additionally, in response to Plaintiffs arguments regarding RSL Ltd.’s additional subsidiaries, Defendants have provided evidence that RSL Ltd. possessed sufficient resources to operate its “non-core” subsidiaries without resorting to the funds of RSL Pic. (See generally Hopkins Report at 27 (“Our analysis of expenditures shows that on a net basis, total disbursements to entities that were not subsidiaries of RSL Pic were less than the proceeds of RSL Ltd.’s [February 2000] Preferred Equity Offering .... ”).) In February 2000, RSL Ltd. raised approximately $110 million through an offering of its securities. (See Defs.’ 56.1 ¶ 21.) The proceeds from that offering were sufficient to cover the approximately $98 million that Plaintiffs expert estimated RSL Ltd. disbursed to its “non-core” subsidiaries in 2000. (See Amirfar Deck Ex. 117.) Therefore, there is no evidence in the record that a conflict between the interests of RSL Ltd. and RSL Pic as to subsidiary funding came to *216 fruition. As such, the Court finds unpersuasive Plaintiffs speculation that, because RSL Pic directors did not have to consider the interests of the RSL Ltd.’s “non-core” subsidiaries, separate RSL Pic board meetings might have led reasonable directors to arrive at different conclusions than those that were reached at the RSL Ltd. level.
Next, Plaintiff argues that RSL Pic and RSL Ltd. had different creditors. (See, e.g., Pl.’s Opp’n at 46-50.) This appears to be true in a formal sense. However, the record indicates that RSL Ltd. was either a guarantor or an obligor on almost all of RSL Pic’s debts. Whatever legal differences may have existed between the obligations of RSL Pic to its creditors, and RSL Ltd.’s obligations to RSL Pic’s creditors as a guarantor, there is no evidence that this distinction had an effect on the functional relationship between these creditors and the RSL Group in 2000.
As of January 2000, RSL Pic had approximately $1.2 billion in outstanding debt. (Pl.’s 56.1 ¶ 12.) The notes underlying this debt were unconditionally guaranteed by RSL Ltd. (See Pl.’s 56.1 Opp’n ¶ 4; see also Panagos Expert Report at 6.) In February 2000, RSL Pic issued additional debt in the amount of $100 million and 100. (See generally Amirfar Decl. Ex. 1.) This debt issuance was also unconditionally guaranteed by RSL Ltd. (See id. at PLF 66804, 66813.) 16 In July 2000 — when, according to Plaintiff, RSL Pic was insolvent and Defendants were ignoring their fiduciary duties — Defendant Lauder willingly became one of Plaintiffs creditors by providing a $100 million bridge loan to RSL Pic in order to provide funding for the RSL Group’s operations. (See Panagos Expert Report at 8.) The terms of the loan were negotiated by the Executive Committee of the RSL Ltd. Board, and, once again, RSL Ltd. guaranteed repayment of the loan. (Amirfar Opp’n Decl. Exs. B, C.) 17
The only instance cited by the parties of a debt owed by RSL Pic for which RSL Ltd. did not serve as either a guarantor or a co-obligor was approximately $170,000 owed by RSL Pic to D & T. (See Bagby Opp’n Decl. Ex. 21 at RSLPLC 031404.) However, RSL Ltd. was also a debtor to D & T. Defendants have provided invoices that were issued to RSL Ltd. in 2000, which indicate that RSL Ltd. owed D & T money for services rendered, and that the size of the debt far exceeded that owed to D & T by RSL Pic. (See Slater Reply Decl. Ex. 2.) For example, a September 19, 2000 invoice issued to RSL Ltd., which was addressed to Defendant Schiffman, listed a $260,467 bill for “professional services rendered” relating to tax forms completed in 1999 for RSL Ltd. “and its subsidiaries ....” (Id. at RSLLtd2007-105443.) Thus, there is evidence of only one RSL Pic debt not guaranteed by RSL Ltd. However, *217 even in that instance, D & T was a creditor of both entities.
In addition to the fact that RSL Ltd. acted as a guarantor or co-obligor on nearly all of RSL Pic’s debts, there is also evidence that RSL Pic’s status as the direct debtor was a matter of formality rather than substance. In the February 2000 Offering Circular, the RSL Group indicated that it had “not presented separate financial statements and other related disclosures concerning RSL PLC because management ha[d] determined that such information [was] not material to shareholders or holders of the notes issued by RSL PLC.” (Amirfar Decl. Ex. 1 at PLF 66981 (emphasis added).) The RSL Group subsequently used funds from an RSL Ltd. bank account at Fleet Bank to make two interest payments to RSL Pic’s creditors. (See Hopkins Report at 15; see also Preston Report at 15.) Moreover, when the RSL Group suspended interest payments on the notes, it did so through a resolution adopted at an RSL Ltd. board meeting on February 28, 2001. (Amirfar Decl. Ex. 94 at RSL-FHL 0000051.) Finally, there is evidence that, when RSL Pic’s creditors wished to communicate with the RSL Group, they contacted representatives of RSL Ltd. For example, on January 19, 2001, counsel for “substantial beneficial holders of various bonds issued by [RSL Pic], a subsidiary of [RSL Ltd.],” sent a letter to RSL Ltd.’s insolvency counsel at Weil Gotshal. (Amirfar Decl. Ex. 6.) The “Re” line of the letter indicates that the correspondence pertained to RSL Ltd. “and its various subsidiaries and affiliates,” which the creditors’ counsel defined collectively as “the Company.” (Id.) 18 All of this evidence suggests that, to the extent there are formal legal differences between the respective obligations of RSL Pic, as debtor, and RSL Ltd., as guarantor or co-obligor, to the creditors of RSL Pic, those distinctions were not considered material by either the RSL Ltd. Board or RSL Pic’s creditors.
Therefore, the undisputed evidence demonstrates that the issues that Plaintiffs expert believes “could” have been considered at RSL Pic board meetings, were, in fact, considered by Defendants in connection with their roles at RSL Ltd. Moreover, Plaintiff has failed to provide any explanation with a basis in the record suggesting how, if at all, separate consideration of these issues at an RSL Pic board meeting would have led these same Defendants to reach different conclusions than those that were actually reached by the officers and directors of RSL Ltd. Thus, the Court concludes that, whereas Plaintiffs initial premise regarding the scope of Defendants’ fiduciary duties is overbroad as a legal matter, Plaintiffs second premise is factually suspect because it ignores the evidence of Defendants’ actions on behalf of the RSL Group as a whole,
c. Conclusion: Actions That Defendants “Might” Have Taken on Behalf of RSL Pic
Proceeding from these two premises, Plaintiff argues that, despite the above-described evidence, isolated consideration of RSL Pic’s specific interests “might *218 have” caused Defendants to sell RSL Pic’s subsidiaries and “significantly reduce” cash outflows. (Pl.’s Opp’n at 72-73.) In support of this theory, Plaintiffs expert posited that holding separate meetings of the RSL Pic Board, with directors acting reasonably under the circumstances faced by the RSL Group, “could have enabled the board of directors to take, among other things ... actions, which would have preserved significant value for RSL Pic’s creditors____” (Panagos Expert Report at 27.) Panagos provided two primary categories of potential actions that Defendants, acting on behalf of RSL Pic, “could have” taken: (1) reducing “the cash outflows of RSL Pic as soon as possible ... ”; and (2) selling the RSL Group’s “Operating Subsidiaries to preserve value for RSL Pic and its creditors and shareholders.” (Id.)
However, in the conclusion of his July 27, 2007 Expert Report, when enumerating actions that “a reasonable board of directors of a company exercising its fiduciary duties when facing similar circumstances to those faced by the board of directors of RSL Pic in 2000 ... would typically have” taken, Panagos did not opine that reasonable directors would have sold RSL Pic’s subsidiaries or imposed additional restrictions on expenditures by RSL Pic’s subsidiaries on top of those that had already been implemented by RSL Ltd. (Id. at 29 (emphasis added).) Rather, he asserted that reasonable directors would have “held regular board meetings” during 2000 and “considered the overall state of their company’s financial condition ....” (Id.) These conclusions are relevant to the first premise underlying Plaintiffs causation theory — whether Defendants’ breached fiduciary duties, see supra Part III.C.2.a — but they do not suggest that reasonable directors acting in a manner consistent with their fiduciary obligations should have or would have been able to stem RSL Pic’s losses.
This is a critical flaw in Plaintiffs causation argument. Providing a list of actions that reasonable directors “could have” or “might have” taken (PL’s Opp’n at 72), without more, simply restates the central question with respect to causation.
See LNC Invs.,
But what if, what if the directors of [RSL] Pic had met and said, you know what, let’s think about this from the creditors’ standpoint.... Maybe the thing to do is to consider preserving the assets that we have and maximizing the value of those assets for the benefit of creditors. And [Defendants] decide to go back and have a conversation with the parent company [RSL Ltd.]. Isn’t that a reasonable thing that a board of directors should be doing?
(Tr. at 84:14-24.) Simply put, neither the Court nor a factfinder may reply to Plaintiffs query through speculation regarding a central element of its claims. This question is for Plaintiff, and, at the summary judgment phase, the answer must have some basis in the record.
Moreover, the lack of evidence suggesting that reasonable directors acting on behalf of RSL Pic would have, or should have, taken the actions identified by Plaintiffs expert stands in stark contrast to the evidence that Defendants and others at the RSL Ltd. level did attempt to do so. With respect to cash expenditures, Plaintiffs expert suggested that Defendants could have, inter alia) “[s]topped funding RSL Pic subsidiaries who had an inability to pay the amounts back,” “reduced selling, general and administrative expenses for RSL Pic subsidiaries,” and “[s]topped all non-critical capital expenditures for which financing was not obtained.” (Panagos Expert Opinion at 27.) However, Plaintiff has not identified specific expenditures by *219 RSL Pic or RSL Ltd. that were, in its view, imprudent or should have been prevented by Defendants. On the other hand, the record is clear that RSL Ltd. attempted to limit the spending of all of its subsidiaries. The message from RSL Ltd. was straightforward and emphatic: “[I]t is imperative that we tighten our belts HARD.” (Amirfar Decl. Ex. 43 at RSL PLC 0001299; see also id. Exs. 41-42; Defs.’ 56.1 ¶¶ 34-35.) Defendant Schiffman’s approval was required prior to any capital expenditure by an RSL Group subsidiary as of May 26, 2000, and each subsidiary was directed that “all inter-company accounts MUST BE SETTLED once a month.” (See Amirfar Decl. Ex. 41.)
Plaintiff points to no evidence that RSL Ltd. subsidiaries circumvented this approval process to improvidently spend funds that should have been preserved by Defendants as directors of RSL Pic. Indeed, when Panagos was asked at his deposition to identify expenditures by RSL Pic between May and November 2000 that went “beyond the reasonable scope of what the [RSL Pic] board should have permitted, or a fiduciary should have permitted,” he responded that “[n]othing comes to mind right now.” (Amirfar Decl. Ex. 128, Dep. of Steven Panagos at 254:12-21.) Moreover, one of the former joint administrators of RSL Pic testified that the RSL Group spent less on its subsidiaries in the third and fourth quarters of 2000 — which is the time period most relevant to Plaintiffs claims — than in the first quarter of 2001, a period that included Plaintiffs commencement of insolvency proceedings and the onset of supervision by the joint administrators that have brought this action. (Amirfar Decl. Ex. 135, Dep. of Peter Spratt at 197:17-22, 198:16-24.) Thus, there is no basis in the record to conclude that, with respect to the RSL Group’s expenditures on subsidiaries during 2000, Defendants’ failure to hold meetings of the RSL Pic Board caused losses to Plaintiff or its creditors.
The same is true of Plaintiffs arguments regarding potential sales of RSL Pic’s subsidiaries in 2000. Although Plaintiffs expert opined that such sales “could have” happened if Defendants had met as directors of RSL Pic, there is evidence in the record explaining why such sales did not occur. The answer is not the lack of RSL Pic board meetings. Rather, RSL Ltd.’s directors and managers tried to monetize certain RSL Group subsidiaries, but failed to consummate the transactions due to the inability to arrive at reasonable terms in a declining market.
Specifically, between May and July 2000, Defendants sought to raise funds through transactions relating to RSL Australia, Telegate, RSL Spain, and RSL Canada. (See Panagos Expert Report at 7-8.) The latter three of these entities were also subsidiaries of RSL Pic. (See Bagby Decl. Ex. 20 at RSLLtd2007-048279.) Referring to these attempts to monetize assets, one of RSL Ltd.’s bankruptcy advisors indicated that RSL Ltd. “couldn’t get a willing buyer to either purchase the assets at an acceptable price or at any price, or the terms and conditions of any such sale were just not executable.... It was at a time when there was just a collapse in the telecom industry____” (Amirfar Decl. Ex. 126, Dep. of Richard P. Krasnow at 55:2-8; see also id. Ex. 136, Dep. of Jeffrey Weinberg at 58:23-59:16 (indicating that RSL Ltd. was “[v]ery much” trying to make sales, that there “was no lack of effort on” RSL Ltd.’s part to do so, and that the failure to consummate transactions was due to problems at the “purchaser level”).)
Thus, the evidence demonstrates that the declining conditions in the telecommunications market were the principal — even if not the only — factual cause of Plaintiffs financial losses.
(See
Defs.’ 56.1 ¶ 83; Pl.’s
*220
56.1 Opp’n ¶ S3;
cf.
Pl.’s Opp’n at 74.) This fact neither precludes Plaintiff from proving that Defendants’ alleged breaches of fiduciary duty were another factual cause of its losses, nor “absolves” Defendants of liability (PL’s Opp’n at 74). Nevertheless, the market conditions do not relieve Plaintiff of its burden of demonstrating that it is more likely than not that Defendants’ alleged breaches of fiduciary duty actually caused its losses.
See Point Prods. A.G.,
In sum, the essential question with respect to the factual causation inquiry is whether, but for Defendants’ failure to consider the interests of RSL Pic in isolation by holding meetings of this wholly owned subsidiary’s board, the value of RSL Pic would have declined by $1 billion between June 2000 and March 2001. In light of the uncontested evidence that the deterioration in the telecommunications industry during 2000 served as an intervening cause of Plaintiffs losses, Plaintiff “must advance more than mere speculation in order to overcome the showing that their loss was attributable” to Defendants’ alleged breaches of fiduciary duty.
Shanahan v. Vallat,
No. 03 Civ. 3496(PAC),
Although the Court has analyzed the premises underlying Plaintiffs causation theory at length above, the essence of Plaintiffs argument is that, because Defendants “were the only persons who could have taken action on behalf of RSL Pic,” “their inaction necessarily must have been a substantial factor in causing the damages suffered by RSL Pic and its creditors.” (PL’s Mem. at 28.) The latter contention — that Defendants’ “inaction” must “necessarily” have caused Plaintiffs losses — is entirely conclusory, lacking in evidentiary support, and merely suggests a correlation between Defendants’ alleged breaches and RSL Pic’s financial losses. Crediting these assertions as legally sufficient to defeat a motion for summary judgment would stretch the law of causation and corporate liability beyond its logical breaking point. Not every instance of financial loss gives rise to legally actionable damages.
In contrast to Plaintiffs speculation regarding causation, there is undisputed evidence that: (1) Defendants played active roles within the RSL Group; (2) nearly all of the issues identified by Plaintiffs expert were deliberated upon by Defendants in their roles at RSL Ltd.; and (3) RSL Ltd. sought to restrict its subsidiaries’ expenditures and attempted, unsuccessfully, to engage in several projects to preserve value and generate additional liquidity for the RSL Group. “[A] convincing presentation
*221
[of evidence] by the moving party cannot be overcome by ‘the mere possibility that a factual dispute
may
exist.’ ”
Fragrance Express Dot Com, Inc. v. Standard & Poor’s Corp.,
D. Plaintiffs Motion to Re-Open Discovery
On May 29, 2009, Plaintiff filed a motion pursuant to Rule 56(f) to re-open discovery. After fully briefing the cross-motions for summary judgment, participating in oral argument, and submitting a supplemental memorandum regarding causation, Plaintiff now seeks to add to the record supplemental expert reports from R. Bruce Den Uyl and Steven R. Panagos. (See Decl. of John H. Bae in Support of Mot. of RSL Communications Pic to Supplement Discovery (“Bae 56(f) Deck”) ¶¶ 2, 3; see also Pk’s 56(f) Mem. at 12-13.) For the reasons set forth below, the Court concludes that Plaintiff has failed to demonstrate that it is entitled to conduct additional discovery under rule 56(f). Accordingly, Plaintiffs motion is denied.
1. Applicable Law
Pursuant to Rule 56(f), “[i]f a party opposing [a motion for summary judgment] shows by affidavit that, for specified reasons, it cannot present facts essential to justify its opposition, the court may ... order a continuance to enable ... other discovery to be undertaken .... ” Fed. R.Civ.P. 56(f).
In order to defeat a summary judgment motion on the grounds that more discovery is needed, the party opposing the motion must submit an affidavit showing: (1) what facts are sought to resist the motion and how they are to be obtained; (2) how those facts are reasonably expected to create a genuine issue of material fact; (3) what effort affiant has made to obtain them[;] and (4) why the affiant was unsuccessful in those efforts.
Behzadi & Brenjian Carpet v. David & Son Oriental Antique Rugs Corp.,
No. 07 Civ. 7073(BSJ)(DFE),
This provision “provides a mechanism whereby a party may avoid summary judgment if the party can make a showing that it is entitled to a continuance to permit further discovery.”
Dangerfield v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
No. 02 Civ. 2561(KMW) (GWG),
2. Analysis
The express terms of Rule 56(f) limit the Court’s ability to re-open discovery to instances in which the “party opposing the motion shows by affidavit that ...
*222
it cannot present facts essential to justify its opposition.” FecLR.Civ.P. 56(f). Plaintiff has not taken that position. Rather, after repeatedly arguing that it has met its burden on the causation element of its claims (see,
e.g.,
Pl.’s Supp. Mem. at 2), Plaintiff seeks to reopen discovery as an alternative argument to avoid summary judgment in favor of Defendants. However, Rule 56(f) “is not a shield against all summary judgment motions.”
Petitt v. Celebrity Cruises, Inc.,
First, Plaintiff has not explained to the Court’s satisfaction why it did not seek to develop the proposed supplemental expert opinions during discovery, and it cannot be said that Plaintiff has been “railroaded” by a premature summary judgment motion.
Celotex Corp. v. Catrett,
Second, Plaintiffs contention that it “did not conduct discovery to establish 'but for’ and proximate causation” (Pl.’s 56(f) Mem. at 6), is belied by the record. (See Decl. of Benjamin Sirota in Opp’n to Plaintiffs Mot. to Reopen Discovery Ex. A.) For example, in its July 2, 2007 Contention Interrogatories, Plaintiff asked Defendant Lauder if he “contends that [his] acts or omissions are not the proximate cause of any damage to the Plaintiff, as stated as an affirmative defense in the Answer .... ” (Id. (emphasis added).) Additionally, in both its First Request for Production of Documents and its Requests for Admission, Plaintiff propounded additional discovery requests relating to “proximate cause.” (See id.) Therefore, Plaintiff did attempt to develop evidence relating to proximate causation during discovery, and its arguments to the contrary appear to be disingenuous.
Third, the controlling authority upon which the Court has relied in articulating the causation standards discussed in this decision pre-dates Defendants’ motion to dismiss and the MTD Decision. Rather than addressing Defendants’ reliance on this authority in any of the briefing relating to the parties’ motions for summary judgment, Plaintiff chose to argue that the cases were distinguishable.
(See
Pl.’s Mem. at 29-33; PL’s Opp’n at 67-71.) In doing so, Plaintiff took the risk that this approach would not persuade the Court of the ultimate merits of its claims. “It is neither the role of this Court, nor the burden of defendant ..., to relieve [the plaintiff] from the adverse consequences of its failed litigation strategies.”
Allstate
*223
Ins. Co. v. Administratia Asigurarilor De Stat,
Finally, Plaintiff has not demonstrated that its two proposed expert reports would create a genuine issue of material fact as to the element of factual causation.
See Miller,
Specifically, in Steven Panagos’s proposed Supplemental Report, Plaintiffs expert stated that he had previously “proposed actions ... that the RSL Pic Board should have taken to preserve value for RSL Pic’s creditors,” and that the purpose of the supplemental report was to “quantify the estimated cash impact” of those actions. (Bae 56(f) Deck Ex. C at 1 (citing Panagos Expert Report at 27).) However, Panagos mischaracterized his July 2007 Export Report. In his initial Report, Panagos opined that reasonable directors would have “held regular board meetings” and “considered the overall state of’ RSL Pic. (Panagos Expert Report at 29.) Actions that reasonable directors “would” have taken are essentially, in Panagos’s view, the actions that Defendants “should” have taken in order to fulfill their fiduciary obligations. At no point in his Expert Report did Panagos opine that reasonable directors of RSL Pic would have — or that Defendants, as required by their fiduciary duties, should have — stopped “funding RSL subsidiaries that had an inability to pay the amounts back to RSL Pic” or sold RSL Pic’s operating subsidiaries. (Bae 56(f) Deck Ex. C at 1.) Rather, he opined that Defendants “could have” done so. (Panagos Expert Report at 27.) Of course, all manner of things could have occurred, in hindsight, but such speculation from Plaintiff and its expert does not suffice to meet its burden in a motion for summary judgment. Nor is this mischaracterization of Panagos’s July 27, 2007 Expert Report sufficient to justify re-opening discovery in order “to quantify the estimated cash impact” of what might have been. (Id.)
The principal flaw in Plaintiffs theory of factual causation is not its failure to quantify either the value that would have been obtained if RSL Pic had liquidated its subsidiaries (see id. Ex. B at 2), or the “cash savings” that might have resulted from additional restrictions on expenditures by the RSL Pic Board (id. Ex. C at 2). Rather, Plaintiff has failed to establish factual causation because it relied solely on the conclusory assertion that Defendants’ inaction “necessarily must have been a substantial factor in causing the damages suffered by RSL Pic and its creditors.” (Pl.’s Mem. at 28 (emphasis added).) As discussed above, see supra Part III.C.2, the defect in the argument is Plaintiffs reliance on the term “necessarily,” as opposed to Plaintiffs evidence of the precise *224 dollar value of the “damages suffered.”. The proposed supplemental expert reports would not remedy this flaw. Accordingly, for all of these reasons, Plaintiffs motion to re-open discovery is denied.
IV. Conclusion
For the foregoing reasons, Plaintiffs motion for partial summary judgment is denied, Defendants’ motion for summary judgment is granted, and Plaintiffs motion to re-open discovery is denied. The Court therefore denies as moot the parties’ motions in limine, as well as Defendant Fisher’s separate motion for summary judgment on Plaintiffs claims against him. However, remaining to be resolved in this litigation is Defendant Fisher’s motion for summary judgment on his pending counterclaim against Plaintiff. Accordingly, Plaintiff and Defendant Fisher shall appear regarding this motion on September 24, 2009 at 2:30 p.m.
SO ORDERED.
Notes
. Defendants in this action are Nesim Bildirici, Paul Domorski, Itzhak Fisher, Ronald S. Lauder, Steven Schiffman, Jacob Schuster, and Eugene Sekulow (collectively, "Defendants”).
. The facts described below are taken from the parties’ Local Rule 56.1 Statements, the affidavits and declarations submitted in connection with the instant motions, and the exhibits attached thereto. Where only one party’s Local Rule 56.1 Statement is cited, the facts are taken from that party’s Local Rule 56.1 Statement, and the opposing party either does not dispute that fact or has not presented admissible evidence to controvert it.
. The Court cites to the parties’ memoranda of law in support of their respective motions as "Mem.,” and their respective opposition briefs as "Opp’n.” Thus, for example, Plaintiff's memorandum of law in support of its motion for partial summary judgment is cited as "PL’s Mem.,” and its memorandum in opposition to Defendants’ motion for summary judgment is cited as "PL’s Opp’n.” There were also two sets of Local Rule 56.1 Statements submitted in connection with the parties’ cross-motions for summary judgment. "PL’s 56.1” refers to the Local Rule 56.1 statement submitted by Plaintiff in support of its motion for partial summary judgment, and "Defs.' 56.1 Opp’n” refers to the Local Rule 56.1 counterstatement submitted by Defendants. Similarly, "Defs.’ 56.1” refers to the Local Rule 56.1 Statement submitted by Defendants in support of their motion for summary judgment, and "PL's 56.1 Opp’n” refers to the Local Rule 56.1 counterstatement submitted by Plaintiff in opposition to that motion.
.The information provided herein regarding the structure of the RSL Group is derived, in part, from the organizational charts in the record. (See Bagby Decl. Ex. 20 at RSLLtd2007-048279-80; Mar. 27, 2009 Decl. of Michelle L. Angelí in Supp. of Supplemen *188 tal Mem. of Law of RSL Communications PLC on Causation ("Mar. 27, 2009 Angelí Decl.”) Ex. B.)
. The phrase "qualified institutional buyer,” or "QIB,” is a term of art under the federal securities laws.
See
17 C.F.R. § 230.144A(a)(l). Pursuant to Regulation S and Rule 144A, issuers may offer securities to QIBs in private placements that are not subject to the registration requirements of the Securities Act of 1933, 15 U.S.C. § 77
et seq. See generally In re Refco, Inc. Sec. Litig.,
. Although Defendants assert that RSL Pic did not maintain separate offices apart from those of RSL Ltd. (see Defs.' 56.1 ¶ 6), one document in the record indicates that RSL Plc "maintain[ed] an office at Victoria House, London Square” in London, England. (Amir-far Decl. Ex. 1 at PLF 66813.)
.During 2000, the RSL Group maintained "six principal bank accounts, two in RSL Ltd.’s name and four in RSL Pic's name (Hopkins Report at 14.) The "vast majority” of the RSL Group's transactions were conducted through an RSL Ltd. account at Fleet Bank and an RSL Pic "investment account” at Morgan Stanley Dean Witter ("Morgan Stanley”). (Id.) The RSL Group also maintained two "ancillary investment accounts” under RSL Pic's name at Morgan Stanley, which were related to RSL Pic’s Morgan Stanley investment account, and an additional "ancillary account” in RSL Pic’s name at Fleet Bank that was related to RSL Ltd.’s Fleet account. (Id.) The sixth bank account maintained by the RSL Group was used in *189 connection with the exercise of RSL Ltd. stock options. (Id.)
. The minutes from the June 29, 2000 RSL Ltd. board meeting define the term “Company” as "RSL Communications, Ltd.” (Amirfar Opp’n Decl. Ex. B at RSL-GAC 0000146.)
. On the same day that the parties’ cross-motions for summary judgment were filed, Defendant Fisher filed a separate motion for summary judgment on his counterclaim and on Plaintiff’s claims against him. (See Doc. No. 82.)
. In response to Plaintiffs contention that Defendants owed a fiduciary duty of care to RSL Pic’s creditors "without any limitations” (Pl.’s Opp’n at 35), Defendants argue that the duties they owed to RSL Pic's creditors were "narrow,” as opposed to nonexistent (see Defs.’ Mem. at 35-39). Defendants’ argument is consistent with New York’s trust fund doctrine.
See Credit Agricole Indosuez,
. Based on the record before the Court, the joint administrators appear to lack standing to advance this theory based on damages to "the creditors of RSL Pic” (Compl. ¶ 82), as opposed to RSL Pic itself.
Cf. Am. Tissue, Inc. v. Donaldson, Lufkin & Jenrette Sec.,
. Vice Chancellor Strine has subsequently discussed, at length, courts’ use of this "useful shorthand.”
See Trenwick Am. Litig. Trust v. Ernst & Young, L.L.P.,
. The portion of the
Adelphia
opinion cited in the MTD Decision contains only two other non-Delaware cases that refer to the "zone of insolvency”:
In re Global Crossing Ltd.,
. Although inapplicable in the context of RSL Pic's United Kingdom-based insolvency proceedings, it is also relevant to note that Congress has created an additional layer of creditor protections through the bankruptcy code.
See In re WorldCom, Inc.,
. The "substantial factor" test of factual causation,
see, e.g., Point Prods. A.G.,
. On February 22, 2000, RSL Pic and RSL Ltd. entered into a contract by which the Chase Manhattan Bank agreed to act as the book-entiy depositary in connection with RSL Pic's February 2000 note offering. (Decl. of Emily O'Neill Slater in Further Support of Defendants’ Mot. for Summary Judgment ("Slater Reply Decl.”) Ex. 1.) RSL Ltd. and RSL Pic "jointly and severally agree[d]” to provide compensation for those services. (Id. at PLF 67416.) Defendants represent, and Plaintiff presents no evidence to the contrary, that the agreement resulted in a $1.4 million debt to Chase Manhattan Bank (now JP Morgan Chase), for which both RSL Ltd. and RSL Pic were responsible as co-obligors. (See Mar. 27, 2009 Angelí Decl. Ex. B; cf. Bagby Opp'n Decl. Ex. 21 at RSLPLC 031404 (July 2004 "Summary of unsecured creditors' claims” indicating a $1.4 million debt owed by RSL Pic to JP Morgan Chase).)
. Although Plaintiff initially alleged that the loan was made "under terms very favorable to [Lauder]” (Compl. ¶ 5), that contention appears to have been abandoned following discovery.
. One of the law firms that represented the creditors represents RSL Pic and the joint administrators in this action. Ironically, whereas Plaintiff's expert opined that Defendants, as directors of RSL Pic, might have been able to direct RSL Pic to liquidate some, or all, of its subsidiaries in order to preserve value for these creditors, the January 19, 2001 letter does not suggest that the creditors pressed that course of action at that time. Rather, the letter states that the creditors were "prepared to continue in ... discussions with the Company” relating to, among other things, "the option of conversion of all or part of their debt claims into some substantial equity interest in the Company or an appropriate affiliate or related entity.” (Amirfar Decl. Ex. 6 at LTD-ADD000482.)