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In Re Application of Bank of Cyprus Public Company

January 21, 2011

IN RE APPLICATION OF BANK OF CYPRUS PUBLIC COMPANY LIMITED


The opinion of the court was delivered by: John F. Keenan, United States District Judge

Memorandum Opinion & Order

Sitting in Part I:

I.Background

In connection with the 2002 Chapter 11 proceedings of a defunct software technology company called AremisSoft, the Bankruptcy Court for the District of New Jersey appointed Joseph P. LaSala and Fred S. Zeidman (the "Trustees") as co-trustees of the AremisSoft Liquidating Trust (the "Trust"). The Trustees are represented in the United States by the law firm of Greenberg Traurig. Bank of Cyprus Public Company Limited ("Bank of Cyprus" or the "Bank") is a bank organized under the laws of the Republic of Cyprus. In 2006, the Trustees filed suit against Bank of Cyprus in this District, Case No. 06 Civ. 6673 (CSH), alleging that the Bank allowed Lycourgos Kyprianou ("Kyprianou"), the founder of AremisSoft, to loot the company and launder the proceeds of his fraud using Bank of Cyprus accounts. On August 15, 2007, Judge Haight dismissed the Trustees' lawsuit on forum non conveniens grounds in favor of Cyprus. See Joseph P. LaSala & Fred S. Zeidman, as Co-Trustees of the AremisSoft Corp. Liquidating Trust v. Bank of Cyprus Pub. Co. Ltd., 510 F. Supp. 2d 246 (2007). However, Judge Haight specified that the forum non conveniens "dismissal is conditioned upon the defendant Bank of Cyprus appearing and defending on the merits, without interposing a statute of limitations, an action asserting claims arising out of these facts, by the plaintiff Trustees in the courts of Cyprus, failing which plaintiffs may apply to restore the case to this Court's calendar." Id. at 279. In October 2010, the Trustees filed an action against Bank of Cyprus in Cyprus asserting essentially the same claims as those Judge Haight dismissed.

Throughout the course of the S.D.N.Y. action, the Trust was also pursuing claims against Kyprianou in Cyprus. In or around 2010, the Trust entered into an agreement with Kyprianou (the "Settlement Agreement"), settling its claims in exchange for his cooperation against three banks, including Bank of Cyprus. In conjunction with this settlement, the Trustees sought leave from the New Jersey bankruptcy court to engage Kyrprianou's personal attorney in Cyprus, Georgios Seraphim, on a contingency basis as special counsel to the Trust (the "Engagement Agreement").

On December 30, 2010, Bank of Cyprus filed an application in Part I to take evidence pursuant to 28 U.S.C. § 1782. Specifically, Bank of Cyprus seeks to subpoena from Greenberg Traurig:

1. Documents purportedly in the physical custody of Greenberg Traurig in New York relating to Bank of Cyprus' alleged role in the AremisSoft fraud, many of which the Trust received through a Coordination Agreement with the SEC and U.S. Attorney's Office.

2. Communications between, on the one hand, Kyprianou or Seraphim, and on the other hand, the Trust, the Trustees, or Greenberg Traurig, concerning (i) the terms of any deal or settlement between them or (ii) the Bank of Cyprus.

3. The Settlement Agreement between the Trust and Kyprianou.

4. Any documents provided by, or on behalf of, Kyprianou to the Trust, Trustees, or Greenberg Traurig concerning the Bank of Cyprus or the terms of any deal or settlement between them.

5. The Engagement Agreement between the Trust and Seraphim.

6. Any documents concerning the Engagement Agreement between the Trust and Seraphim.

Greenberg Traurig appeared and opposed the application. On the same day, Bank of Cyprus also filed an ex parte application to take evidence pursuant to 28 U.S.C. ยง 1782 in the District of New Jersey "seeking depositions of Trustee LaSala and a witness most knowledgeable about settlement negotiations with Kyprianou, along with some of the same documents sought here." Bank of Cyprus Mem. at n.1. The Bank explains that it filed two applications seeking the same documents because it is unclear whether the documents are in the Trustees' or ...


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