This case was last updated from U.S. District Courts on 04/22/2022 at 07:54:43 (UTC).

Spiteri v. Branson et al

Case Summary

On February 21, 2022, Thomas Spiteri (“Plaintiff”), derivatively and on behalf of Nominal Defendant Virgin Galactic Holdings, Inc. (“Virgin Galactic” or the “Company”) f/k/a Social Capital Hedosophia Holdings Corp. (“SCH” or the “Company”), represented by Timothy W. Brown of The Brown Law Firm, P.C., filed a civil action against Richard Branson (“Branson”), Chamath Palihapitiya (“Palihapitiya”), Michael Moses (“Moses”), George Whitesides (“Whitesides”), Michael Colglazier (“Colglazier”), & others (collectively, the “Individual Defendants,” and together with Virgin Galactic, the “Defendants”), seeking declaratory relief with damages, among other reliefs, for the Defendants’ alleged breach of their fiduciary duties. This case was filed in U.S. District Court in the Eastern District of New York with Judge LaShann D. Hall and Marcia M. Henry presiding. 

 

In the complaint, the Plaintiff alleged that, “during the Relevant Period, the Individual Defendants breached their fiduciary duties by personally making and/or causing the Company to make a series of materially false and misleading statements regarding the Company’s business, operations, and prospects.”

 

The Plaintiff further alleged that, “Specifically, the Individual Defendants willfully or recklessly made and/or caused the Company to make false and misleading statements that failed to disclose, inter alia, that: (1) Legacy VG (and later the Company) engaged in the Unsafe Flight Misconduct; (2) as a result of, and as part of, the Unsafe Flight Misconduct, during Legacy VG’s February 2019 test flight, Unity’s horizontal stabilizer experienced such great damage due to human error that it would take fourteen months to replace, engendering delay; (3) following the destruction of Unity’s horizontal stabilizers in February 2019, they were replaced not “upgraded”; (4) the replacement horizontal stabilizers were made of aluminum rather than composite and as such were inferior; and (5) the Company failed to maintain adequate internal controls.” 

 

The Plaintiff also alleged that, “As a result, Defendants’ statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.”

 

The Plaintiff further alleged that, “In further breach of their fiduciary duties, the Individual Defendants failed to correct these false and misleading statements and omissions of material fact, or ensure the Company had adequate internal controls to affect their disclosure, rendering them personally liable to the Company.”

 

The Plaintiff has laid down eight claims for relief. The first claim alleged is for the violation of Section 14(a) of the Exchange Act. The second claim alleged is for breach of fiduciary duties. The third claim alleged is for unjust enrichment. The fourth claim alleged is for abuse of control. The fifth claim alleged is for gross mismanagement. The sixth claim alleged is for waste of corporate assets. The seventh claim alleged is for contribution under Sections 10(b) and 21D of the Exchange Act, and the eighth claim alleged is for aiding and abetting breach of fiduciary duty.

 

In his prayer for relief, the Plaintiff requested that the Court declare that Plaintiff may maintain this action on behalf of Virgin Galactic and that Plaintiff is an adequate representative of the Company. The Plaintiff also requested that the Court declare that Individual Defendants have breached and/or aided and abetted the breach of their fiduciary duties to the Company. The Plaintiff further requested the Court for an award of restitution from the Individual Defendants and damages together with pre- and post-judgment interest thereon, along with costs and disbursements of this action, including reasonable attorneys’, experts’ fees, expenses and such other and further relief as the Court may deem just and proper.

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    1:22-CV-00933

  • Filing Date:

    02/21/2022

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

Judge Details

Presiding Judge

LaShann DeArcy Hall

Referral Judge

Marcia M. Henry

 

Party Details

Plaintiff

Thomas Spiteri

Defendants

Richard Branson

Chamath Palihapitiya

Michael Moses

George Whitesides

Michael Colglazier

Wanda Austin

Adam Bain

Tina Jonas

Craig Kreeger

Evan Lovell

George Mattson

James Ryans

W. Gilbert West

Anthony Bates

Ian Osborne

Jacqueline D. Reses

Andrea Wong

Virgin Galactic Holdings, Inc.

Attorney/Law Firm Details

Plaintiff Attorney

Timothy William Brown

Attorney at The Brown Law Firm, P.C.

767 Third Avenue, Suite 2501

New York, NY 10017

Defendant Attorney

Corey Anne Calabrese

Attorney at Latham & Watkins LLP

1271 Avenue Of The Americas

New York, NY 10020

 

Court Documents

1 #1

Main Document

1 #1

Civil Cover Sheet

1 #2

Proposed Summons

#2

(#2) Summons Issued as to All Defendants. (Bowens, Priscilla) (Entered: 02/22/2022)

#3

(#3) In accordance with Rule 73 of the Federal Rules of Civil Procedure and Local Rule 73.1, the parties are notified that if all parties consent a United States magistrate judge of this court is available to conduct all proceedings in this civil action including a (jury or nonjury) trial and to order the entry of a final judgment. Attached to the Notice is a blank copy of the consent form that should be filled out, signed and filed electronically only if all parties wish to consent. The form may also be accessed at the following link: #http://www.uscourts.gov/uscourts/FormsAndFees/Forms/AO085.pdf. You may withhold your consent without adverse substantive consequences. Do NOT return or file the consent unless all parties have signed the consent. (Bowens, Priscilla) (Entered: 02/22/2022)

#4

(#4) This attorney case opening filing has been checked for quality control. See the attachment for corrections that were made, if any. (Bowens, Priscilla) (Entered: 02/22/2022)

#5

(#5) SUMMONS Returned Executed by Thomas Spiteri. Virgin Galactic Holdings, Inc. served on 2/23/2022, answer due 3/16/2022. (Brown, Timothy) (Entered: 02/23/2022)

6 #6

Main Document

6 #1

Declaration

6 #2

Proposed Order Proposed Certificate of Default

#7

(#7) Clerk's ENTRY OF DEFAULT It appearing from the docket maintained in this action that defendant Virgin Galactic Holdings, Inc. has failed to appear or otherwise defend this action, the default of defendant Virgin Galactic Holdings, Inc. is hereby noted pursuant to Rule 55a of the Federal Rules of Civil Procedure. (Poveda, J.) (Entered: 03/24/2022)

#8

(#8) Letter MOTION to Vacate the entry of Default by Virgin Galactic Holdings, Inc.. (Calabrese, Corey) (Entered: 03/24/2022)

9 #9

Main Document

9 #1

Exhibit A - The Brown Law Firm, P.C. Biography

9 #2

Exhibit B - Gainey McKenna & Egleston Firm Resume

3 More Documents Available
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Docket Entries

  • 03/24/2022
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  • Docket(#9) STIPULATION and [Proposed] Order Consolidating Related Shareholder Derivative Actions and Establishing a Leadership Structure by Virgin Galactic Holdings, Inc. (Attachments: #1 Exhibit A - The Brown Law Firm, P.C. Biography, #2 Exhibit B - Gainey McKenna & Egleston Firm Resume) (Calabrese, Corey) (Entered: 03/24/2022)

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  • 03/24/2022
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  • Docket(#8) Letter MOTION to Vacate the entry of Default by Virgin Galactic Holdings, Inc.. (Calabrese, Corey) (Entered: 03/24/2022)

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  • 03/24/2022
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  • Docket(#7) Clerk's ENTRY OF DEFAULT It appearing from the docket maintained in this action that defendant Virgin Galactic Holdings, Inc. has failed to appear or otherwise defend this action, the default of defendant Virgin Galactic Holdings, Inc. is hereby noted pursuant to Rule 55a of the Federal Rules of Civil Procedure. (Poveda, J.) (Entered: 03/24/2022)

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  • 03/18/2022
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  • Docket(#6) Request for Certificate of Default by Thomas Spiteri (Attachments: #1 Declaration, #2 Proposed Order Proposed Certificate of Default) (Brown, Timothy) (Entered: 03/18/2022)

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  • 02/23/2022
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  • Docket(#5) SUMMONS Returned Executed by Thomas Spiteri. Virgin Galactic Holdings, Inc. served on 2/23/2022, answer due 3/16/2022. (Brown, Timothy) (Entered: 02/23/2022)

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  • 02/22/2022
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  • Docket(#4) This attorney case opening filing has been checked for quality control. See the attachment for corrections that were made, if any. (Bowens, Priscilla) (Entered: 02/22/2022)

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  • 02/22/2022
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  • Docket(#3) In accordance with Rule 73 of the Federal Rules of Civil Procedure and Local Rule 73.1, the parties are notified that if all parties consent a United States magistrate judge of this court is available to conduct all proceedings in this civil action including a (jury or nonjury) trial and to order the entry of a final judgment. Attached to the Notice is a blank copy of the consent form that should be filled out, signed and filed electronically only if all parties wish to consent. The form may also be accessed at the following link: #http://www.uscourts.gov/uscourts/FormsAndFees/Forms/AO085.pdf. You may withhold your consent without adverse substantive consequences. Do NOT return or file the consent unless all parties have signed the consent. (Bowens, Priscilla) (Entered: 02/22/2022)

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  • 02/22/2022
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  • Docket(#2) Summons Issued as to All Defendants. (Bowens, Priscilla) (Entered: 02/22/2022)

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  • 02/21/2022
  • DocketCase Assigned to Judge LaShann DeArcy Hall and Magistrate Judge Marcia M. Henry. Please download and review the Individual Practices of the assigned Judges, located on our #website. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. (Bowens, Priscilla) (Entered: 02/22/2022)

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  • 02/21/2022
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  • Docket(#1) COMPLAINT against All Defendants filing fee $ 402, receipt number ANYEDC-15307761 Was the Disclosure Statement on Civil Cover Sheet completed -NO,, filed by Thomas Spiteri. (Attachments: #1 Civil Cover Sheet, #2 Proposed Summons) (Brown, Timothy) (Entered: 02/21/2022)

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