Sign Up for PublicationsThe Firm recently secured a settlement on very favorable terms for clients Excalibur Almaz Limited (and associated companies), Arthur Dula, Anat Friedman, and John Buckner Hightower in their decade-long and hard-fought dispute (across multiple jurisdictions) with Japanese entrepreneur Takafumi Horie. The settlement, reached just days before trial in the Isle of Man was set to commence, resulted in the withdrawal of Mr. Horie’s high-value fraud claims and his payment of £30,000 towards legal costs.
The dispute arose from an ambitious plan in 2005 to create a private space tourism company using refurbished Soviet-era spacecraft. Art Dula, a valued Quinn Emanuel client and a Texas attorney specializing in space law, established a relationship with Russian space authorities in the 1990s. From them, he developed a keen interest in returning the capsules to their former glory, through ‘Excalibur Almaz,’ the vehicle for the project.
Setting out for investment in the venture, Mr. Dula was introduced to Mr. Horie, a widely-known Japanese entrepreneur (perhaps best known for founding ‘Livedoor,’ a prominent Japanese internet service company, in the early 2000s). Mr. Horie invested $49 million in the project yet, shortly after the relevant agreements were executed, Mr. Horie was arrested (and later convicted) of securities fraud in relation to Livedoor’s financial practices. He was sentenced to 2 years and 6 months in prison. Mr. Horie’s arrest and conviction, aside from leading to the collapse of Livedoor, also spelled the end of the space project, which struggled to attract further funding that it desperately needed to refurbish the capsules and get the project off the ground. Mr. Horie ultimately assigned his rights (and his shares in Excalibur Almaz) to Livedoor, before agreeing a Settlement Agreement (the “2010 Agreement”) containing broad releases and covenants not to sue.
Despite this, in 2014 Mr. Horie initiated proceedings in Texas alleging fraud and claiming he had been deceived about the viability of the space venture. The Texas courts dismissed the claims in 2017, and Excalibur Almaz pursued enforcement of the 2010 Agreement’s exclusive jurisdiction clause in the Isle of Man courts.
In response, Mr. Horie pursued wide-ranging counterclaims, alleging fraud and breach of fiduciary duty in respect of the $49 million that he claimed he had been induced to invest. After years of wrangling in the Manx Courts, trial was scheduled for 2025. Just days before trial was set to commence, a settlement was reached involving the withdrawal by Mr. Horie of all claims and an agreement to pay Quinn Emanuel’s clients’ costs.
The clients are delighted to put this long dispute behind them, and can now finally move forward after a decade under the shadow of (baseless) fraud allegations.