The Minnesota case runs the other way

There is a particular failure mode in reputational research. A name is run against litigation databases, the hits are listed, and the list is presented as a risk profile. Nobody checks which side of the caption the subject sits on.

Nubai Global Investment Limited v. Clarke is a clean example.

What the docket says

Docket 0:18-cv-02228, United States District Court for the District of Minnesota. Filed 31 July 2018. Cause: 28:1332 Diversity - Stockholders Suits. Nature of suit: 160 Stockholders Suits. Terminated 14 March 2019.

Nubai Global Investment Limited - held through Madnani’s DSA Investments - is the plaintiff. Thomas Clarke is the defendant.

Why it matters

The complaint’s allegations of fraud were made by Madnani’s side. Nubai’s case was that Clarke, having been removed as a director of Chippewa Capital Partners, purported to remove the remaining directors of Chippewa and of Mesabi Metallics and installed himself as sole director and chief executive of both.

Clarke’s answer, given to the press rather than reproduced here from the pleadings, was that he had severed ties after Nubai failed to deliver funding it had promised, and that he remained chief executive and rightful owner. The Wall Street Journal carried his account.

A reader told only that “Madnani’s company was involved in litigation alleging fraud” receives the exact opposite of the truth.

The rule

This archive records the caption. Plaintiff or defendant, every time, in the first line of the case file. It costs one sentence and it is the difference between a record and a smear.

And the rule cuts both ways, which is the point of having one.

Here it puts him on the plaintiff’s side. Everywhere else in this archive there is no side to put him on, because there is no caption at all: a nine-figure loss in his final year on a board, a liquidation ordered by a supreme court, a receivership over a billion-dollar claim, two dissolutions, a beneficial ownership in the British Virgin Islands. In none of those is he a party. In each of them he is a name on a list of directors, an owner on a registry line, or an entry on his own profile.

Not accused. Not absent. Present in the file, in a stated capacity, while the company was in the state the documents describe. That is where most of this archive sits, and it is the harder thing to write about than either an accusation or a clearance.