Plaintiffs are shareholders of hedge fund that was incorporated in Cayman Islands in 2002 and collapsed in 2008 upon revelation that most all its assets were invested in a Ponzi scheme. Plaintiffs sued fund's auditors for apparently performing no real audits while issuing unqualified annual opinions upon which Plaintiffs relied in their initial investments. Court erred in dismissing complaint with prejudice under Section 2-619. Court failed to require Defendants to show a conflict between laws of Illinois and Cayman Islands as to shareholder standing, and without properly assessing the gravamen of the shareholders' allegations. Complaint lacks specific factual allegations that sufficiently invoke any of the 4 exceptions to a successor's nonliability for company's debts and other obligations. Section 2-615 dismissal should be without prejudice, so that Plaintiffs may replead as to Defendant RSM Cayman.(GORDON and REYES, concurring.)
Illinois Appellate Court
Civil Court
Motions to Dismiss