Kobre & Kim's Cross-Border Disputes Team
November 18, 2025
Kobre & Kim Secures Dismissal in Chinese Healthcare Company U.S. Shareholder Action
Kobre & Kim secured a significant victory in October 2025 in the Supreme Court of the State of New York on behalf of a leading Chinese healthcare company and its affiliates. The ruling represents an important outcome for Chinese corporates and investors navigating cross-border shareholder disputes in U.S. courts and highlights the complexity of cases involving overlapping U.S. and offshore legal systems.
In October 2025, Kobre & Kim achieved a significant victory in the Supreme Court of the State of New York on behalf of its clients, a leading Chinese medical device and healthcare services company and its affiliates. Justice Andrea Masley granted the defendants’ motions to dismiss a purported shareholder derivative action for lack of standing under Cayman Islands law.
The plaintiffs, who claimed to be shareholders of a Cayman Islands company previously listed on the New York Stock Exchange, brought derivative claims on behalf of the Cayman company against its former board, Kobre & Kim’s clients, and several other co-defendants. The complaint alleged misconduct in connection with the company’s proposed acquisition of a biomedical start-up, asserting causes of action under both New York and Cayman law.
The Court held that the plaintiffs failed to establish a prima facie case for derivative standing under any of the four recognized exceptions to the rule in Foss v. Harbottle, the governing authority for shareholder derivative actions under Cayman Islands law. The Court also declined to recognize the plaintiffs’ proposed “fifth” exception, based on so-called “interests of justice”, and dismissed the action in its entirety for lack of standing.
The decision marks a notable outcome for Chinese corporations and investors facing cross-border shareholder disputes in U.S. courts. The case required close coordination across Kobre & Kim’s offshore and onshore offices, drawing on Kobre & Kim’s experience handling complex cross-border litigation involving Cayman Islands law.