Bank of America, N.A, Successor to LaSalle Bank, National Association, a national banking association v. Veluchamy et al
MEMORANDUM Order Signed by the Honorable Milton I. Shadur on 7/12/2011:Mailed notice(srn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
BANK OF AMERICA, N.A., etc.,
FIRST MUTUAL BANCORP OF
ILLINOIS, INC., et al.,
BANK OF AMERICA, N.A., etc.,
PETHINAIDU VELUCHAMY, et al.,
09 C 5108
09 C 5109
During the course of the July 8, 2011 continued hearing on
various pending motions in these actions, those present in court
comprised--in addition to (1) the counsel for plaintiff and all
defendants and (2) defendants Pethinaidu and Parameswari
Veluchamy (“Veluchamy Defendants”) personally--counsel for Arun
Veluchamy (“Arun”), for McGladrey & Pullen, LLP (“McGladrey”),
for Federal Deposit Insurance Company (“FDIC”) as receiver of
defendant Mutual Bank, for Dr. and Mrs. Naidu and for Rajiv
This Court initially expressed its threshold
views as to the several motions, based in part on the input that
had been received from all sources, and it then provided all
counsel the opportunity to address any of the issues involved.
At the conclusion of those proceedings this Court announced the
following oral rulings for the reasons that it stated orally in
It will rule on McGladrey’s motion for a protective
It deferred the entry of any Civil Contempt Order
against the Veluchamy Defendants based on their previouslydetermined contempt of court, because some further
developments are in progress in that respect (including but
not limited to Veluchamy Defendants’ contemplated deposit
with the Clerk of Court of the cash equivalent of the
aggregate amounts listed for jewelry items in Veluchamy
Defendants’ personal property floater insurance policies.1
Any such cash deposit will not however obviate the need for
Veluchamy Defendants (and for Arun and Anu Veluchamy (“Anu”)
as well) to provide acceptable explanations (a) of what
happened to the listed jewelry, or to the proceeds of sale
to the extent that any such jewelry was sold, and (b) of the
Veluchamy Defendants’ counsel have represented that the
contemplated cash deposit will come from pension funds that could
not otherwise be reached by plaintiff as a source for partial
satisfaction of its judgment.
inconsistent representations that have been given as to the
jewelry by Veluchamy Defendants (and, to the extent
applicable, by Arun and Anu).
Anu’s counsel was unable to attend the hearing
because of what was represented to be another previously
scheduled court appearance.
But Anu’s counsel was ordered
to deposit forthwith with the Clerk of Court, also to serve
as security for the payment of plaintiff’s judgment, the
items of jewelry listed in Veluchamy Defendants’ current
Plaintiff’s counsel and counsel for Anu
were ordered promptly to draft, and to tender to this Court
for execution, an appropriate order in that respect.
As to the bona fides of the claimed indemnity
agreements, pursuant to which substantial assets that
plaintiff seeks to ascribe to Veluchamy Defendants have
assertedly been insulated from potential application toward
satisfaction of the judgments in these actions, the search
continues for the identity of the lawyer or lawyers who were
responsible for the preparation of, or for assistance in the
preparation of, those documents.
In the meantime all
counsel representing Veluchamy Defendants or Arun or Anu in
these proceedings were ordered (and all but Anu’s counsel
have agreed in open court) to provide written confirmation
of the inquiries that they and their clients have made in
connection with that search.
When the matter is fully
developed, this Court will consider what form of restrictive
order may be called for if the identity of that lawyer or
those lawyers has not been ascertained.
During the July 8 hearing Arun’s counsel presented
a motion to vacate the order that had granted FDIC a
modification of the previously existing protective order so
that it could have access to materials already obtained by
plaintiff in the course of its citation proceedings.
this Court made clear in response to that motion that it was
based in part on the seriously mistaken view of Arun’s
counsel as to the proper scope of discovery during the
course of the citation proceedings against him and Anu (see,
e.g., Star Ins. Co. v. Risk Marketing Group, 561 F.3d 656,
661-62 (7th Cir. 2009)(relying in part on Resolution Trust
Co. v. Ruggiero, 994 F.2d 1221 (7th Cir. 1993)) and Dexia
Credit Local v. Rogan, 629 F.3d 612 (7th Cir. 2010)).
for the merits of that motion, FDIC’s counsel were ordered
to file a response on or before July 15 as to Arun’s
assertedly protected documents, and this Court will rule
In the meantime, all other documents
that have been obtained by plaintiff’s counsel (including
Arun’s documents that his counsel has not claimed to be
protected from disclosure to others) were ordered to be made
available to FDIC’s counsel in accordance with this Court’s
prior grant of FDIC’s motion.
At the conclusion of the July 8 hearing, Veluchamy
Defendants were sworn for the taking of further testimony in
continued citation proceedings, to be resumed thereafter at
the office of plaintiff’s counsel.
Milton I. Shadur
Senior United States District Judge
July 12, 2011
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