NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0654-14T1

WOLVERINE FLAGSHIP FUND TRADING 

LIMITED, WHITEBOX CONCENTRATED 

CONVERTIBLE ARBITRAGE PARTNERS, 

L.P., WHITEBOX MULTI-STRATEGY 

PARTNERS, L.P. and PANDORA 

SELECT PARTNERS, L.P.,

Plaintiffs-Appellants,

v.

AMERICAN ORIENTAL BIOENGINEERING,

INC., AOXING PHARMACEUTICAL COMPANY,

INC. and OLDE MONMOUTH STOCK TRANSFER

CO., INC.,

Defendants-Respondents.

________________________________________________

Argued November 4, 2015 – Decided

Before Judges Yannotti, St. John and 

Vernoia.

On appeal from Superior Court of New Jersey,

Chancery Division, Essex County, Docket No. 

C-275-13.

Michael T. Hensley argued the cause for 

appellants (Bressler, Amery & Ross, 

attorneys; Mr. Hensley and Lauren FentonValdivia, on the brief).

Respondents have not filed a brief.

APPROVED FOR PUBLICATION

March 11, 2016

APPELLATE DIVISION

March 11, 2016
2 A-0654-14T1

The opinion of the court was delivered by

ST. JOHN, J.A.D.

Plaintiffs, Wolverine Flagship Fund Trading Limited, a 

Cayman Islands corporation, Whitebox Concentrated Convertible 

Arbitrage Partners, L.P., a British Virgin Islands Limited 

Partnership, Whitebox Multi-Strategy Partners, L.P., a British 

Virgin Islands Limited Partnership, and Pandora Select Partners, 

L.P., a British Virgin Islands Limited Partnership (collectively 

plaintiffs), appeal from the Chancery Division's order denying

injunctive relief. We affirm. 

I.

Plaintiffs contend that they collectively own $19,210,000 

in outstanding principal amount of 5.00% convertible senior 

notes (the notes), issued by defendant American Oriental 

Bioengineering, Inc. (AOB), a Nevada corporation. The notes 

were issued pursuant to an Indenture between AOB and Wells Fargo 

Bank, National Association as trustee, dated July 15, 2008 (the 

Indenture). Pursuant to the Indenture, payment of the notes was 

an unconditional obligation of AOB, and the notes would mature 

in 2015. However, the notes were not secured by any collateral

and Section 11.11 of the Indenture provided, "[n]othing in this 

Indenture or in the [notes], expressed or implied, shall be 

construed to constitute a security interest under the Uniform
3 A-0654-14T1

Commercial code or similar legislation . . . in any 

jurisdiction."

In 2013, plaintiffs brought suit in the Law Division, 

Docket No. ESX-L-275-13, against AOB asserting that it was in 

default under the Indenture for non-payment of the notes and 

other covenant defaults. AOB did not defend that action, and on 

August 13, 2013, a $21,096,347.81 default final judgment was 

entered against it. Following entry of the judgment, plaintiffs 

discovered that the only significant asset held by AOB was a 

33.7% interest in Aoxing Pharmaceutical Company, Inc. (Aoxing)

held in certificate form. Aoxing is a Florida corporation with 

its headquarters in Jersey City. Olde Monmouth Stock Transfer 

Co., Inc. is the stock transfer agent for Aoxing. 

On December 3, 2013, plaintiffs filed a complaint in the 

Chancery Division against AOB, Aoxing, and Olde Monmouth. The 

complaint sought an injunction ordering Olde Monmouth and Aoxing 

to cancel the certificated shares held by AOB, reissue them in 

defendant's name, and deliver them into the actual possession of 

the sheriff for execution. Plaintiffs allege that the 

certificates are being held in the People's Republic of China. 

Neither AOB nor Aoxing defended the suit. The only action 

taken by Olde Monmouth was its accession to a consent order 
4 A-0654-14T1

enjoining it from "transferring, canceling, amending or in any 

way disposing of the Shares" until otherwise ordered. 

On August 22, 2014, the judge issued an order denying 

plaintiffs' requested injunction, but reaffirming the earlier 

consent order and order of default. It is from that August 22, 

2014 order that plaintiffs appeal. 

II.

On appeal, plaintiffs argue that the Chancery Division 

incorrectly interpreted Uniform Commercial Code (UCC) 8-112, as 

adopted by this state at N.J.S.A. 12A:8-112, to require actual 

seizure of certificated shares owned by a debtor before a

creditor can reach the debtor's interest in those certificated 

shares. Having reviewed the arguments in light of the 

applicable law, we affirm the order of the Chancery Division. 

A trial court's interpretation of a pertinent statute 

concerns questions of law. See Chase Bank USA, N.A. v. 

Staffenberg, 419 N.J. Super. 386, 396 (App. Div. 2011). We 

therefore review such a determination de novo. See, e.g., 

Manalapan Realty v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 

(1995). 

In 1997, New Jersey adopted the UCC rules concerning the 

process by which a creditor can reach certificated securities 
5 A-0654-14T1

owned by a debtor. See L. 1997, c. 252. UCC 8-112 was codified 

as N.J.S.A. 12A:8-112, which provides in pertinent part: 

a. The interest of a debtor in a 

certificated security may be reached by a 

creditor only by actual seizure of the 

security certificate by the officer making 

the attachment or levy, except as otherwise 

provided in subsection d. of this section. 

However, a certificated security for which 

the certificate has been surrendered to the 

issuer may be reached by a creditor by legal 

process upon the issuer.

. . . .

d. The interest of a debtor in a 

certificated security for which the 

certificate is in the possession of a 

secured party, or in an uncertificated 

security registered in the name of a secured 

party, or a security entitlement maintained 

in the name of a secured party, may be 

reached by a creditor by legal process upon 

the secured party.

e. A creditor whose debtor is the owner of 

a certificated security, uncertificated 

security, or security entitlement is 

entitled to aid from a court of competent 

jurisdiction, by injunction or otherwise, in 

reaching the certificated security, 

uncertificated security, or security 

entitlement or in satisfying the claim by 

means allowed at law or in equity in regard 

to property that cannot readily be reached 

by other legal process.

"Our primary goal in interpreting a statute is to determine 

the Legislature's intent." In re Raymour and Flanigan 

Furniture, 405 N.J. Super. 367, 381 (App. Div. 2009). 

Generally, the language of the statute is the best indicator of 
6 A-0654-14T1

the legislature's intent. See DiProspero v. Penn, 183 N.J. 477, 

492 (2005). "We ascribe to the statutory words their ordinary 

meaning and significance, and read them in context with related 

provisions so as to give sense to the legislation as a whole." 

Ibid. (citations omitted). We only look to extrinsic evidence 

"if there is ambiguity in the statutory language that leads to 

more than one plausible interpretation." Ibid. 

Subsection (a) of N.J.S.A. 12A:8-112 does not, on its face, 

present any ambiguities. The subsection consists of a general 

rule and two exceptions. The general rule is that "a 

certificated security may be reached by a creditor only by 

actual seizure of the security certificate." N.J.S.A. 12A:8-

112(a). The two exceptions apply where the certificate has been 

surrendered by the debtor to the issuer, or "as otherwise 

provided in subsection d." Ibid.

Common sense dictates that the Legislature's use of the 

restrictive term "only" in stating the general rule, followed by 

the naming of two exceptions, implies that the two exceptions 

named are the only exceptions applicable to the subsection. 

This interpretation is also consistent with the maxim expressio

unius est exclusio alterius, which stands for the proposition 

that explicitly naming one or more things implies the exclusion 
7 A-0654-14T1

of all other things. See Evans v. Atlantic City Bd. of Educ., 

404 N.J. Super. 87, 92 (App. Div. 2008). 

Plaintiffs contend that subsection (e) of N.J.S.A. 12A:8-

112 is properly interpreted to permit the use of any means 

"allowed at law or in equity" to satisfy a claim. In support of 

this argument, plaintiffs point out that subsection (e) contains 

a disjunctive phrase, entitling a creditor to the aid of the 

court "in reaching the certificated security . . . or in 

satisfying the claim in regard to property that cannot readily 

be reached . . . ." N.J.S.A. 12A:8-112(e) (emphasis added). 

From this, plaintiffs argue that section (e) requires the court 

to use its broad equitable powers in two distinct situations: 

either to reach a certificated security, or alternatively, when 

a certificated security cannot be reached. 

This interpretation would make subsection (e) function as 

an additional (and very broad) exception to the possession 

requirement in subsection (a). Indeed, under such an 

interpretation, the exception contained in (e) would swallow the 

general rule set forth in (a). 

When two sections of a statute appear to conflict with each 

other, "we must read the provisions in pari materia, construing 

them 'together as a unitary and harmonious whole.'" Timber Glen 

Phase III, LLC v. Township of Hamilton, 441 N.J. Super. 514, 522
8 A-0654-14T1

(App. Div. 2015) (quoting Am. Fire & Cas. Co. v. N.J. Div. of 

Taxation, 189 N.J. 65, 80 (2006)). "'Every reasonable 

construction should be applied' to assure each section is 

meaningful." Ibid. (internal quotation marks omitted) (quoting 

Twp. of Mahwah v. Bergen Cnty. Bd. of Taxation, 98 N.J. 268, 281

(1985), cert. denied, 471 U.S. 1136, 105 S. Ct. 2677, 86 L. Ed. 

2d 696 (1985)). In light of this principle, the broad equitable 

and legal remedies permitted under subsection (e) should stop 

short of any remedy that circumvents the actual seizure 

requirement of subsection (a). 

This approach is similar to the interpretation adopted by 

the Eleventh Circuit in First National Bank v. Dyes, 638 S.W. 2d

957, 958 (1982). In that case, plaintiff obtained a judgment 

against her ex-husband for 600 certificated shares in the Dr. 

Pepper Company. Ibid. Plaintiff's husband never transferred 

the shares. Ibid. The district court looked to section 8.317 

of the Texas Business and Commercial Code,1 and in particular, to 

 

1 The statute, which has since been repealed, followed the 

Uniform Stock Transfer Act and read as follows:

(a) No attachment or levy upon a security or 

any share or other interest evidenced 

thereby which is outstanding shall be valid 

until the security is actually seized by the 

officer making the attachment or levy but a 

security which has been surrendered to the 

(continued)
9 A-0654-14T1

the second subsection, entitling a creditor to "such aid . . . 

as is allowed at law or in equity." Id. at 959-60. 

Consequently, the district court ordered the Dr. Pepper Company 

and First National Bank to cancel defendant's certificated 

shares, and reissue them in plaintiff's name. Id. at 958. 

The Eleventh Circuit reversed, holding the statute "affords 

a creditor a means of gaining control of a certificate or other 

security from the owner or holder thereof, not the issuer." Id.

at 959. The court noted the purpose of the seizure requirement 

is to prevent the fraudulent transfer of cancelled certificates, 

and held that the statute "provides no right to the issuance of 

a new certificate when the old one cannot be reached." Ibid. 

Similarly, in Detox Industries, Inc. v. Gullet, a judgment 

debtor placed his only asset, certificated shares of Detox 

 

(continued)

issuer may be attached or levied upon at the 

source.

(b) A creditor, whose debtor is the owner of 

a security shall be entitled to such aid 

from courts of appropriate jurisdiction, by 

injunction or otherwise, in reaching such 

security or in satisfying the claim by means 

thereof as is allowed at law or in equity in 

regard to property which cannot readily be 

attached or levied upon by ordinary legal 

process.

[Tex. Bus. & Com. Code. § 8.317 (1968), 

repealed Sept. 1, 1995.]
10 A-0654-14T1

Industries, in the hands of his son. 770 S.W. 2d 954, 955 (Tex. 

App. 1989). The son, in turn, took the shares outside the 

state, and could not be located. Ibid. The trial court ordered 

Detox Industries to cancel defendant's shares and reissue new 

shares in the name of the receiver. A Texas appellate court 

reversed, holding that a turnover order can only be issued 

against the debtor, or a third party, that is in actual 

possession of the certificates. Id. at 958. 

Plaintiffs rely upon two published cases in support of 

their argument. First, plaintiffs cite the Second Circuit Court 

of Appeals in Inter-Regional Financial Group, Inc. v. Hashemi, 

562 F.2d 152, 155 (2d Cir. 1977), cert. denied, 434 U.S. 1046, 

98 S. Ct. 892, 54 L. Ed. 2d 798 (1978), for the proposition that 

subsection N.J.S.A. 12A:8-112(e) acts as a further exception to 

the seizure requirement in subsection (a). However, in that 

case, the trial court actually only enjoined the debtor to turn

over certificated securities to the sheriff for execution. 

Ibid. This is consistent with a narrow interpretation of 

subsection (e), and does not support the proposition that the 

court can reissue the certificated shares owned by a debtor. 

Plaintiffs also cite House v. Williams, 573 So. 2d 1012 

(Fla. Dist. Ct. App. 5th Dist. 1991), in which a judgment 

creditor sought to attach a debtor's certificated shares in a 
11 A-0654-14T1

privately-held, family-owned company. Id. at 1012-13. The 

defendant in that case claimed he did not know where the 

certificates were located. Ibid. Consequently, the court 

ordered the corporation to issue new certificates in defendant's 

name, and deliver them to the sheriff for execution. Ibid. An 

appellate court upheld the order without explaining its 

reasoning. Ibid. The court's omission of any explanation or 

analysis seriously limits the persuasiveness of the opinion. 

Lastly, plaintiffs argue concern for public policy and 

justice demands reversal. We agree that, by affirming the 

chancery court's order in this case, plaintiffs would be

foreclosed from pursuing one avenue of recovery for a 

substantial debt. However, the policy considerations in this 

case cut both ways. The purpose of the actual seizure 

requirement in N.J.S.A. 12A:8-112 is to prevent fraudulent 

transfers of cancelled stock certificates to innocent third 

parties. This is illustrated by a comment to N.J.S.A. 12A:8-

112:

In dealing with certificated securities the 

instrument itself is the vital thing, and 

therefore a valid levy cannot be made unless 

all possibility of the certificate's 

wrongfully finding its way into a 

transferee's hands has been removed. This 

can be accomplished only when the 

certificate is in the possession of a public 

officer, the issuer, or an independent third 

party. A debtor who has been enjoined can 
12 A-0654-14T1

still transfer the security in contempt of 

court. Therefore, although injunctive 

relief is provided in subsection (e) so that 

creditors may use this method to gain 

control of the certificated security, the 

security certificate itself must be reached 

to constitute a proper levy whenever the 

debtor has possession. 

[N.J.S.A. 12A:8-112 cmt. 1 (citation 

omitted).]

Plaintiffs maintain that this rationale dates from the preinternet age, and that potential buyers of cancelled 

certificates can be put on record notice by publishing advisory 

notices on the internet. However, N.J.S.A. 12A:8-112 was 

adopted in 1997, thus plaintiffs' contention that the 

Legislature could not have comprehended the usefulness of the 

internet in providing record notice is dubious. See N.J.S.A.

12A:8-112. Furthermore, we have neither the authority to enact 

such a notice requirement, nor the expertise to determine the 

sufficiency of such a requirement. See Roman Check Cashing v. 

N.J. Dep't of Banking & Ins., 169 N.J. 105, 111 (2001). 

In sum, we conclude that the Chancery Division judge 

correctly found that, under N.J.S.A. 2A:8-112(a), actual seizure

of certificated shares is required before a creditor may reach a 

debtor's interest in those shares.

Affirmed.