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Brett Favre, Others Beat Investor Appeal in Sqor Securities Suit

Feb. 15, 2022, 5:04 PM

Brett Favre and others connected to a bankrupt digital sports media company remain free of securities claims after the Fifth Circuit ruled a lower court was right to throw out the case.

Callais Capital Management LLC, which invested more than $16 million in Sqor, accuses the retired NFL player and other company directors and officers of securities fraud. But CCM’s arguments on appeal are “largely duplicative” of those rejected below, and they fail for “substantially the same reasons,” the U.S. Court of Appeals for the Fifth Circuit said in an unpublished opinion.

CCM argued that the lower court’s refusal to let it amend the personal jurisdiction portion of its complaint was an abuse of discretion. The district judge “reasonably concluded” that amendment would be futile because the investor “already put forth its strongest arguments,” the per curiam opinion said.

CCM also challenged the lower court’s determination that the complaint failed to state a claim upon which relief could be granted. But it already had the chance at such an amendment once, and it didn’t “indicate how it could or would” make changes that satisfied the heightened pleading standards for securities fraud, the Monday opinion said.

Judges E. Grady Jolly, Don R. Willett, and Andrew S. Oldham made up the panel. Willett would have reversed the district court’s personal jurisdiction-based dismissal of one defendant.

Lewis Brisbois Bisgaard & Smith LLP represents Favre and the other defendants. Cara Stone LLP and Chehardy Sherman Williams represent CCM.

The case is Callais Cap. Mgmt. LLC v. Wilhite, 2022 BL 48823, 5th Cir., No. 21-30222, unpublished 2/14/22.

To contact the reporter on this story: Jennifer Bennett in Washington at jbennett@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com