|1955 Capital and Andrew Chung Attempt Censure, Block Media Coverage of Fraud and Breach of Fiduciary Duty Claims|
After new legal filings and arbitration demands were made by plaintiff Global Industrial Investment Limited (GIIL), sole investor in the 1955 Capital funds, Andrew Chung and 1955 Capital’s attorneys sent threatening letters to the news media to demand the news media remove any mention of the fraud and breach of fiduciary duty claims.
“The news media, the Silicon Valley venture capital community and the public should be outraged that 1955 Capital and Mr. Chung attempted to bully the media and censure coverage of his wrongdoings,” said Yan Zhang, attorney at the law firm of Baker Botts, which represents GIIL, which is suing 1955 Capital and its founder Andrew Chung.
1955 Capital’s law firm Orrick sent threatening cease and desist demand letters to the news media this week demanding that any mention of the arbitration be removed because of “confidentiality” issues.
“The claim is baseless,” Zhang said.
There is no probation on free speech in discussing the lawsuits filed against 1955 Capital, Mr. Chung and his wife Coral Chung. The rules of arbitration do not prohibit disclosure of the existence of the filing in this case.
Despite 1955 Capital’s attempt to create a chilling effect on the public discourse, the news media rejected the baseless claims and kept its stories in place.
Ironically, Mr. Chung has selectively disclosed only portions of the arbitrator’s decisions with the purpose of hiding findings on his own business practices and performance of fiduciary duties. GIIL is seeking to have the entire arbitrator’s decision made public so that the truth will come out about Mr. Chung.
GIIL, the sole investor in the two funds managed by Andrew Chung and 1955 Capital, filed the arbitration on October 29, 2019 to enforce the investment terms requiring Mr. Chung to make investments only in specified areas. The arbitration demand was filed with the International Centre of Dispute Resolution.
GIIL is a wholly-owned subsidiary of China Fortune Land Development, a publicly-traded real estate company and leading developer and operator of industrial mixed-use projects in China.
GIIL also brought a lawsuit on Nov. 18 in Santa Clara County Superior Court in California against Chung for violation of fiduciary duties. “There is ample evidence that Chung recklessly breached his fiduciary duties to GIIL by secretly changing the deal terms in a scheme to keep all the initial $80 million investment for himself,” added Zhang. That lawsuit seeks the return of the money, additional compensatory damages, punitive damages, and injunctive relief.
Chung, 42, a former partner at Khosla Ventures and principal at Lightspeed Venture Partners, is married to Coral Chung, CEO of Silicon Valley luxury purse startup Senreve. GIIL is suing both Mr. and Mrs. Chung for fraud in a separate legal action in China.<< Back to previous page