London hedge fund sues Brightpoint over failed acquisition

Back to TopCommentsE-mailPrintBookmark and Share

A London-based hedge fund has sued Brightpoint Inc. over a $10 million loan it alleges the Indianapolis-based cell phone distributor fraudulently brokered in anticipation of an acquisition in France that never materialized.

Sofaer Global Hedge Fund alleges Brightpoint CEO Bob Laikin persuaded it to lend $10 million to Hong Kong-based Chinatron Group Holdings Ltd., a company that invests in wireless communications firms. In Sofaer’s complaint, Laikin is described as a founding shareholder and former director of Chinatron.

According to the lawsuit, Brightpoint has been a Chinatron customer for a decade. The complaint alleges that Chinatron owed Brightpoint $5.4 million, resulting from a line of credit extended during a previous business deal, but lacked funds to repay it.

“If Chinatron could not repay its debt to Brightpoint by the end of 2007, Brightpoint would be forced to record it as ‘bad debt’ on its books, which would be subject to scrutiny by Brightpoint’s audit committee, a situation Laikin very much wanted to avoid,” Sofaer’s complaint reads.

The lawsuit alleges that Laikin had been in discussions with Chinatron throughout 2007 about the possibility of Brightpoint purchasing Chinatron subsidiary Mobiltron France for $14 million by March 2008. Mobiltron France owns and operates a factory in Etrelles, France.

According to the suit, Chinatron CEO John Maclean Arnott originally relayed Brightpoint’s acquisition intent to Sofaer, which Laikin then confirmed in a conference call.

Sofaer loaned Chinatron $10 million, in anticipation of a $12 million repayment due in March 2008 from the proceeds of the Mobiltron deal.

The lawsuit alleges that, on Dec. 17, 2007, Laikin and Arnott held a conference call finalizing details of the loan with Sofaer.

“Laikin told Sofaer on this call that the deal for Brightpoint to purchase Mobiltron France for [$14 million] by the end of March 2008 was ‘as good as a done deal,’ that the deal was ’99.9 [percent] done’ and that Laikin was ‘99.9 [percent] certain’ that the deal would go through by the end of March 2008,” Sofaer’s complaint reads.
The lawsuit also alleges that Laikin called the deal a “relatively small deal for Brightpoint,” and that Laikin claimed he had authority to enter into it without board or management approval. The complaint alleges that Laikin told Sofaer he didn’t want the deal to appear “pre-arranged” to Brightpoint’s board and management, even though it was “as good as done.”

“When asked to provide written confirmation, Laikin refused, but reassured Sofaer that the deal would go through, repeatedly saying ‘my word is my bond,’” the complaint reads.

Sofaer made the $10 million loan to Chinatron in December 2007, according to the complaint, which Chinatron then used to repay the $5.4 million it owed Brightpoint.

According to the complaint, subsequent Brightpoint due diligence led the company to eventually offer just $6.25 million for Mobiltron France.

“Laikin, contrary to his earlier statements, stated that Brightpoint could ‘not simply pay a set price’ for Mobiltron France and that Brightpoint’s European management had to ‘find out what the factory [was] worth’ before committing to a deal,” Sofaer’s complaint reads.

Chinatron allegedly turned down the $6.25 million offer, because it was insufficient to repay its loan from Sofaer. Sofaer alleges that Laikin had always intended to induce a “fire sale” of Mobiltron France. Sofaer’s suit seeks damages and attorneys fees.

Laikin this morning declined to comment about the suit, saying Brightpoint’s longstanding policy is not to comment on litigation. Brightpoint vice president and general counsel Steven Fivel said the same.

Brightpoint stock was down almost 2 percent in midday trading, to 8.82 a share.


  • A complaint was filed against the Company on November 25, 2002 in the United States District Court for the Southern District of Indiana, entitled Chanin Capital Partners LLC v. Brightpoint, Inc., Cause No. CV-1834-JDT. The plaintiff claims the Company breached a services contract with defendant under which the plaintiff alleges it was entitled to receive both a monthly advisory fee of $125,000 and an additional fee, due under certain specified circumstances, of $1.5 million less the amount of any previously-paid monthly advisory fees. The plaintiff seeks compensatory damages in an amount including, but not limited to $1.5 million, less advisory fees paid and payable, plus unreimbursed reasonable expenses, applicable pre-judgment and post-judgment statutory interest, and reasonable costs of the action. In addition, the plaintiff claims that it is entitled to recover $125,000 for a monthly advisory fee on a theory of account stated
  • What? A Laikin accused of fraud? Impossible.

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.