There has been another delay in the case against Esther DuVal, the Chapter 11 Trustee of the jointly administered estates of Avenica, Inc. and Gallant Capital Markets, Ltd. against AFX Capital Markets Ltd., AFX Capital U.S. Corp., and STO Super Trading Online (AFX Defendants).
On Tuesday, the latest filings with the New York Eastern Bankruptcy Court show that the legal counsel of DuVal submitted a Letter at the Court, which states that the hearing on the sanctions motion against AFX is adjourned.
“This letter is to confirm the adjournment of the pre-trial conference in the above-mentioned adversary proceeding and the hearing on the Trustee’s sanctions motion, per the Court’s direction, from Thursday, October 24, 2019 at 10:00 a.m. to Friday, November 15, 2019 at 9:30 a.m,” the document states.
DuVal: more delay tactics from AFX
The letter written by Joseph S. Maniscalco, who is the representative of the Trustee, yet again claimed on Tuesday that AFX is employing delay tactics and bad faith behavior in their current legal battle in the United States.
Currently, 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.
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However, as Finance Magnates reported last week, AFX’s legal counsel rejected accusations that the company was acting in bad faith and instead claimed that the suspension of its CySEC license made the company unable to pay the settlement.
As a result, the legal counsel of the AFX Defendants asked the presiding judge, the Honorable Elizbeth S. Stong, United States Bankruptcy Judge, Eastern District of New York, that its response to the Sanctions Motion be held in abeyance and that the Court instead hold a conference wherein counsel and the Court can discuss an appropriate way to move forward.
AFX needs to provide reasoning
Commenting on the behavior of AFX, the statement said: “Despite having the Sanctions Motion for 3 weeks, AFX Defendants wait until the eve of the Objection Deadline to file their letter request.”
“Their request is only further proof of the delay tactics and bad faith behavior by AFX Defendants that has plagued this Adversary Proceeding (e.g. the multiple misrepresentations to Trustee’s counsel and this Court about the pending payments under the stipulation of settlement and the current status of AFX Defendants).”
Furthermore, DuVal claims that the AFX defendants haven’t provided any reason as to why their time to file a response should be held in abeyance, and if they believe the Sanctions Motion has no merit, then they can file a response explaining their basis for this position.
“AFX Defendants should not be afforded another opportunity to make misrepresentations and delay this Adversary Proceeding. Indeed, granting a status conference and holding their response in abeyance will only reward AFX Defendants for this inappropriate behavior,” the statement added.
For more background on the case, please refer to our earlier articles, which can be found here.