A Foreign Defendant Moves to Dismiss Kmart Holdings’ Complaint for Insufficient Service of Process
October 8, 2021, Southern District of New York – Defendant, Cleva Hong Kong Ltd. recently moved to dismiss a $13.8 million clawback action brought against it by the Plaintiff-Debtors Sears, Roebuck and Co. and Kmart Holding Corporation in the bankruptcy case of Sears Holdings Corporation, et al for “insufficient service of process”.
The Defendants argue that given the Plaintiffs’ “extreme delay” in attempting to serve the complaint and summons, the statute of limitations for the Plaintiffs to assert the claims in the complaint under section 546(a) of the Bankruptcy Code expired nearly one year ago on October 15, 2021. The Defendants also contend that the foreign country exception did not apply because the Plaintiffs “did not attempt service within the 90-day time limit” set by Rule 4(m). Since the Plaintiffs allegedly failed to meet the flexible due diligence standard, the Defendants assert that the complaint should be dismissed with prejudice.
In re: Sears Holdings Corporation, et al., Case Number – 18-23538-RDD