The judicial machinery is in motion. The New York court before which Grifols has sued bearish investor Daniel Yu and his firm Gotham City Research has issued subpoenas to the defendants, according to legal sources. In them, there is a 21-day deadline to appear and respond to the lawsuit, but with one caveat: the deadline begins the day after the day after notification of the summons. That, which normally does not pose any problem, in this case has a little more substance: Yu is missing and Gotham headquarters is not located either.
The court secretary has issued four court summonses against the people Grifols has sued. First of all, investor Daniel Yu. The lawsuit describes him as a criminal with a “sordid” criminal history and is said to frequently change his address. He also states that, according to available information, he resides in Manhattan. The truth, however, is that it is not known exactly where he lives. The court summons issued against him states that his “address [está] yet to be determined despite reasonable diligence” to ascertain it.
“Within 21 days of service of this subpoena (not counting the day you received it),” the subpoena says, “you must serve upon the plaintiff an answer to the attached complaint or a procedural motion” thereon. . “If you do not respond, a default judgment will be entered against you for the relief requested in the complaint. You must also present your response or petition to the court,” adds the letter written by the judicial secretary.
Identical subpoenas are addressed to Gotham, whose address is also unknown, and to Cyrus De Weck, an ally of Daniel Yu who manages the firm General Industrial Partners, LLP (GIP), an investment fund that takes bearish positions to benefit from the fall of the quote that produces the publication of the Gotham reports. There is a fourth summons against General Industrial Partners itself which, in this case, does come with its London address.
The Spanish company accuses the bearish investor and his allies of defamation, interference in business and unjust enrichment, according to the 78-page lawsuit filed before the New York courts, to which EL PAÍS has had access. Grifols requests a jury trial, tries to refute Gotham’s thesis, highlights the falsehoods that he included in his first report and demands compensation. Additionally, he claims that Yu is a convicted criminal and describes some of his illicit activities. The company expresses its fear that some banks will not refinance its debt or demand higher interest rates as a result of the bearish attack. And it warns that the report has caused 13 law firms to prepare class action lawsuits against Grifols in the United States.
Grifols has hired the law firm Proskauer Rose LLP. The lawsuit seeks compensation for damages to be determined at trial; compensation for benefits unjustly obtained by the defendants; punitive damages in an amount “sufficient to deter further unlawful and improper conduct”; costs and expenses incurred in connection with the lawsuit, including attorneys’ fees, and interest at the maximum legal rate permitted by the court. Along with that, Grifols requests “any other remedy that the court considers fair and appropriate,” according to the text of the lawsuit.
Grifols rose 4.3% on the stock market this Monday after learning about the content of the lawsuit and the arguments it uses in its defense. It closed at 9.97 euros per title. Even so, it is still well below the 14.24 euros of January 8, the session prior to the publication of the report in which Gotham claimed that its shares had no value. The price fell by more than 40% on the day the report was published.
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