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Musalli Factory for Gold & Jewelry Co. v. New York Financial LLC

June 14, 2010


The opinion of the court was delivered by: Alvin K. Hellerstein, U.S.D.J.


Plaintiff Musalli Factory for Gold & Jewelry Co., a judgment creditor of Defendants New York Financial LLC and Amir F. Boktor, moves to hold Defendants in civil contempt for noncompliance with subpoenas and with a court order. For the reasons stated below, the motion is granted.


Musalli is a gold and jewelry manufacturing company based in Saudi Arabia. It entered into a business deal with Mr. Boktor and his investment services company, New York Financial, in which New York Financial would invest $5 million with JPMorgan Chase & Co. on Musalli's behalf. Instead of investing the funds at JPMorgan, Defendants transferred the funds to Refco FX Associates, LLC, a currency trading firm that declared bankruptcy in 2005.

Musalli filed a lawsuit against Mr. Boktor and New York Financial in January 2006, and filed an Amended Complaint in February 2006. Defendants moved to dismiss the complaint for lack of subject matter jurisdiction, or in the alternative, for an order staying the case pending arbitration. In April 2006, I denied Defendants' motion to dismiss, but stayed the case pending arbitration, finding that the dispute between the parties was governed by arbitration provisions contained in executed documents between them.

The parties arbitrated the dispute before a panel of the International Centre for Dispute Resolution over six days in October 2006 and June 2007. On December 19, 2007, the arbitral panel issued a partial final award, finding that Defendants violated their fiduciary duties. The panel pierced the corporate veil between Mr. Boktor and New York Financial, and rejected all of Defendants' claims. Over Defendants' objection, I confirmed the partial final award.

The final arbitral award was subsequently entered in Musalli's favor and, on October 7, 2008, I confirmed that award. Final judgment for Plaintiff was then entered in the amount of $6,854,901.70, plus post-judgment interest.

Plaintiff has sought to collect payment in satisfaction of the judgment. To that end, Plaintiff obtained an order releasing approximately $260,000 held in escrow and sent Defendants post-judgment discovery requests. On July 2, 2009, Plaintiff served two subpoenas duces tecum ad testificandum on Defendants' counsel, Barry Slotnick of Buchanan Ingersoll & Rooney P.C. The subpoenas demanded production of financial documents and Mr. Boktor's appearance at a deposition on July 23, 2009. Shortly thereafter, Mr. Slotnick informed Plaintiff's counsel that he no longer represented defendants, despite that a motion to withdraw had not been filed with the Court. Mr. Slotnick subsequently moved to withdraw based on Defendants' failure to pay their legal bills and counsel's inability to communicate with Defendants. On March 26, 2010, over Plaintiff's objection, I granted defense counsel's motion to withdraw. Neither New York Financial nor Mr. Boktor has since engaged an attorney in this action.*fn1

Two days before the scheduled deposition, Plaintiff's counsel received a call from Augustine Diji, an attorney who purportedly represented Mr. Boktor but had not entered an appearance in this case. Mr. Diji informed Plaintiff's counsel that Mr. Boktor was in Egypt and would not appear at the deposition. Following the July 21 call from Mr. Diji, Plaintiff's counsel gave Defendants an additional two weeks to comply with the subpoenas. On August 17, 2009, Plaintiff's counsel sent an email to Mr. Diji to discuss how the parties would proceed with post-judgment discovery. Mr. Diji responded that Mr. Boktor "lacked assets to satisfy the current judgment" but was "interested in working out a settlement" with Plaintiff. Plaintiff offered to forego a formal deposition if Mr. Boktor would participate in a teleconference, but emphasized the importance of obtaining documentary evidence of Defendants' financial position before settling the claim, and extended the deadline to produce documents until August 28, 2009. That deadline passed without any communication from Defendants, and Plaintiff sent another email to Mr. Diji, stating that it would seek a court order compelling compliance with the subpoenas if the documents were not produced by September 14, 2009. Defendants did not produce any documents and, on October 28, 2009, Plaintiff moved for an order to compel.

In a one-page order filed November 30, 2009, I granted Plaintiff's motion to compel compliance with the subpoenas and ordered Mr. Boktor to appear at a deposition on or before December 14, 2009. See Order Granting Plaintiff's Motion to Compel Compliance with Subpoenas, Musalli Factory for Gold & Jewelry, Co. v. New York Financial LLC, 06 Civ. 82 (AKH) (Doc. N0. 82) (S.D.N.Y. Nov. 30, 2009). Defendants did not oppose the motion, and did not comply with the order once issued. Plaintiff subsequently filed an order to show cause why Defendants should not be held in contempt for failing to comply with the order. Defendants did not oppose that application to the Court.

I ordered the parties to appear for a status conference to be held on April 30, 2010. Mr. Boktor failed to appear and instead sent correspondence to the Court. He indicated that he would produce several boxes of documents once he had the opportunity to consult with counsel, and attributed the delay in producing the documents and appearing for his deposition to his wife's health. As of the date of this order, Plaintiff's counsel has not received the documents that Mr. Boktor has mentioned.

Plaintiff subsequently filed the instant motion, which Mr. Boktor has opposed.


a. Defendants are in ...

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