AFX Capital Markets Ltd., AFX Capital U.S. Corp., and STO Super Trading Online (AFX defendants) are about to lose another legal representative, with White and Williams LLP (WW) filing a motion with the New York Eastern Bankruptcy Court to withdraw as legal counsel.
AFX and defendants are currently in a legal battle with Esther DuVal, the Chapter 11 Trustee of the jointly administered estates of Avenica, Inc. and Gallant Capital Markets, Ltd. in the United States.
On November 22, WW filed the motion with the New York Court. In the motion seen by Finance Magnates, the law firm claims that “irreconcilable differences have arisen” between the defendants and WW.
The law firm explains that, despite repeated requests for the broker to pay its outstanding invoices regarding legal services and expenses it has received, AFX has failed to pay its counsel and is not responding to WW’s communication attempts via phone, email, and other correspondence.
“WW is uncertain of the current status of the Defendants. WW is informed that Defendants have been the subject of an investigation in Cyprus, and that an affiliate of Defendants has entered into administration in the United Kingdom. Thus, WW is uncertain if Defendants will be providing any direction to WW,” the law firm said in the motion.
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Another legal counsel leaves AFX
WW is not the first legal counsel of AFX to withdraw. In fact, in 2018, the previous legal representatives of AFX – Foley & Lardner LLP also withdrew as counsel. The cause for this action was due to the fact that AFX didn’t pay “significant legal services” and failed to communicate with Foley & Lardner LLP.
In addition to two legal counsels requesting to withdraw as representatives of AFX, the former investment service provider has also been accused by DuVal of acting in bad faith.
As Finance Magnates reported, Duval is seeking Sanctions and Fees for Engaging in Bad Faith and Injunction Relief (the “Sanctions Motion”) against the broker.
This is because AFX has failed to pay an agreed-upon settlement amount of $830,000. A key requirement for the settlement was a deposit payment of $230,000, which was to be made by May 30, 2019. So far, none of the payments have been made.
For more background on the case, please refer to our earlier articles, which can be found here.