U.S. District Judge John G. Koeltl of the Southern District of New York permitted every one of Leadenhall’s RICO, RICO conspiracy, fraud, breach-of-contract, unjust-enrichment and fraudulent-transfer claims to proceed and dismissing only two claims, for the actual and constructive fraudulent transfer, claims only as to individual defendants Josh Wander and Steven Pasko, while allowing those claims to proceed against A-CAP. Since the filing of Leadenhall’s action in 2024, defendant Wander was indicted by the Department of Justice and will be tried next month, several 777 defendants, Wander, and Pasko were sued by the SEC, and several of the 777 defendants entered into chapter 11 bankruptcy. The motion to dismiss filed by the 777 entities remains stayed pending the chapter 11 proceedings, in which K&S is also representing Leadenhall in a contentious fight to avoid A-CAP control of the bankruptcy.

In a separate ruling issued the same day, Judge Koeltl denied a motion by A-CAP and its chairman and CEO, Kenneth King, to stay the litigation for six months in light of the 777 bankruptcy proceedings. The court concluded that Leadenhall had a strong interest in proceeding with its claims against A-CAP and King, that relevant discovery could continue independently of the bankruptcy proceedings, and that the prompt prosecution of the case would best serve the court and the public. 

In its September 21 opinion, the court held that Leadenhall had adequately alleged a RICO enterprise comprising individuals and two separately controlled corporate families. The court also found that the complaint sufficiently alleged a pattern of racketeering activity based on more than 60 allegedly false monthly compliance reports transmitted from May 2021 through November 2023. In addition, the court concluded that Leadenhall had alleged a clear and definite loss based on an accelerated debt balance of approximately $609.5 million that was immediately due and payable but remained uncollected. 

The latest rulings build on a series of results King & Spalding has obtained for Leadenhall. Early in the New York litigation, the team secured an injunction intended to preserve remaining collateral while Leadenhall pursued its claims. In separate litigation filed by 777 Partners in the Southern District of Florida, King & Spalding compelled testimony from key 777 witnesses and filed a comprehensive summary judgment motion presenting admissions obtained in discovery. Shortly afterward, 777 Partners voluntarily dismissed that action with prejudice in April 2025 without receiving any payment from Leadenhall. King & Spalding also helped obtained dismissal on the pleadings of a New York state-court action challenging Leadenhall’s May 2025 foreclosure on its remaining collateral.

The King & Spalding team includes Leigh Nathanson, Brian Donovan, Peter Starr, Craig Carpenito, Bernhardt Nadell, Thad Wilson, and Jordan Leu.