Vale International S.A. et al

Filing 91

MEMO ENDORSEMENT on 88 granting 87 Letter Motion to Compel; granting 88 Letter Motion to Compel. ENDORSEMENT: Vale's unopposed motion to compel is hereby GRANTED. Respondents Perfectus Real Estate Corp. and Tarpley Belnord Corp. shall complete their production of responsive documents by June 29, 2021. The Clerk of Court is directed to close ECF 87 and ECF 88. SO ORDERED. (Signed by Magistrate Judge Ona T. Wang on 6/22/2021) (rro)

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MEMO ENDORSED

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The Honorable Ona T. Wang, p. 2
entities (together, the “Respondents”) for use in proceedings (the “English Proceedings”)
pending in the United Kingdom before the High Court of Justice, Business and Property Courts
of England and Wales, Commercial Court (QBD) (the “High Court”) against Benjamin (Beny)
Steinmetz, Dag Lars Cramer, Marcus Struik, Asher Avidan, Joseph Tchelet, David Clark, the
Balda Foundation (“Balda”), and Nysco Management Corp. (“Nysco”) (together, the
“Defendants”). As Vale advised the Court, Vale had reason to believe that Steinmetz, his
foundation (Balda), and its subsidiary corporation (Nysco) had invested at least a portion of their
ill-gotten gains from a massive fraud perpetrated against Vale in, inter alia, various New York
real estate ventures involving Respondents. ECF No. 2 at 6. The Court granted the Application
on July 20, 2020, ECF No. 45 at 9, and on January 29, 2021, denied the Respondents’ “motions
to quash and associated requests to limit the subpoenas,” and directed all Respondents –
including Perfectus – to respond to the subpoenas by February 5, 2021. ECF No. 76 at 9.
Perfectus’s former counsel Proskauer Rose LLP (“Proskauer”) made five limited
productions of documents between August 27, 2020 and March 19, 2021. Proskauer committed
to making productions on a rolling basis and acknowledged that its productions were incomplete.
See, e.g., ECF No. 82 ¶ 4 (“Perfectus has instead chosen to retain lower-cost counsel to complete
its production of documents.”). On March 18, 2021, Proskauer informed Vale that Perfectus, a
New York real estate company, had hired Doron Levy of Amit, Pollak, Matalon & Co. (“APM”),
an Israeli lawyer not licensed to practice in New York, to manage its further production.2 In the
more than two months since Proskauer’s last production on March 19, Perfectus’s productions
have ceased entirely.
Doron Levy and his firm APM are no strangers to this matter, as Mr. Levy has served as
counsel to many of the wrongdoers responsible for the fraud committed against Vale and their
efforts to conceal assets. See ECF No. 84. When Vale thus sought to confirm that Proskauer
would oversee and certify the work of non-admitted foreign counsel, Proskauer advised us that
Mr. Levy’s APM colleague Joseph Z. Hellerstein was admitted in New York and that Mr.
Hellerstein – who is likewise based in Israel along with the APM firm itself – would replace
Proskauer as counsel for Perfectus.3 Mr. Hellerstein has appeared under the firm name
Hellerstein & Co. to create the appearance that his practice is separate from Mr. Levy’s firm
APM, but the Hellerstein & Co. website itself exposes this fiction: “On March 14, 2019, Joe
Hellerstein joined the firm of Amit Pollak Matalon & Co. . . . YOU CAN CONTACT JOE AT:
Joseph Z. Hellerstein, Amit Pollak Matalon & Co. . . . [e-mail].”4
As we feared, Perfectus’s change of counsel from Proskauer to Mr. Levy’s firm has had
the effect of halting discovery entirely notwithstanding this Court’s prior orders. Mr. Hellerstein
has refused even to meet and confer with Vale. The only substantive communication Vale
received from Mr. Hellerstein after filing its letter of May 4, 2021, ECF No. 84, is that on May 5,
2

ECF No. 84-1 (March 18, 2021 email from Robert J. Cleary).

3

Id. March 22, 2021 email from Samuel Levander; April 7, 2021 email from Robert J. Cleary (providing an
@apm-law.com email address and an Israeli mailing address as part of Mr. Hellerstein’s contact information). Mr.
Hellerstein subsequently filed a notice of appearance and an order for substitution was granted on April 26, 2021.
ECF No. 83.
4
Exhibit 2, Hellerstein & Co.: A Full-Service International Israeli Law Firm, http://hellerstein-law.com/ (last
visited May 25, 2021).

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2021, Mr. Hellerstein advised counsel for Vale that he had just attempted to download
Perfectus’s documents for the first time and had only then learned that they were encrypted. We
have heard nothing about Perfectus’s production since.5
The limited documents produced by Perfectus to Vale before the departure of Proskauer
show that

In other words, unlike some
of the other Respondents, Perfectus is not merely a U.S.-based third party in which Steinmetz
appears to have invested the proceeds of his fraud, but it is Steinmetz’s own investment vehicle.6
To date, however, there are a number of significant gaps in Perfectus’s productions,
including but not limited to:
Communications between Perfectus and other BSG Entities (Request 3);
Perfectus’s complete set of bank records and tax filings (Requests 4, 5, and 12);7
Perfectus’s board meeting minutes (Request 6);
Perfectus’s financial statements (Request 7);
Perfectus’s current corporate organizational chart (Request 8);8 and
Due diligence documents related to Perfectus’s real estate investments (Request 14).
ARGUMENT
Under Federal Rule of Civil Procedure 37(a)(1), “[o]n notice to other parties and all
affected persons, a party may move for an order compelling disclosure or discovery.” See also
Fed. R. Civ. P. 45(d)(2)(B)(i) (permitting a motion to compel against a third party subpoena
recipient in the court for the district where compliance is required). Motions to compel

5

Exhibit 3, May 5, 2021 email from Joseph Z. Hellerstein.

6

Vale previously told the Court that – based on the most recent historical information available to Vale at
that time – Perfectus was ultimately owned by Balda. ECF No. 66 at 5 & nn.23-24. More recently produced
documents suggest that

7

While Perfectus did produce certain bank statements, it produced none from 2010 and none after August
2020, and most of the bank records it did produce are incomplete. Perfectus’s production of tax filings was limited
to portions of its 2015 and 2017 filings.

8

Perfectus produced an undated corporate organizational chart in October 2020, but ignored Vale’s requests
to confirm whether the chart represented its current ownership structure.

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discovery are “entrusted to the sound discretion of the district court.” In re Fitch, Inc., 330 F.3d
104, 108 (2d Cir. 2003) (quoting United States v. Sanders, 211 F.3d 711, 720 (2d Cir. 2000)).
Courts routinely grant motions to compel to impose deadlines on litigants who have
substantially delayed compliance with their discovery obligations. See, e.g., Anhui Konka Green
Lighting Co. v. Green Logic Led Elec. Supply, Inc., No. 18CV12255MKVKHP, 2020 WL
5743518, at *3 (S.D.N.Y. Sept. 25, 2020) (granting motion to compel discovery where
defendants were “late to respond” and “provided a host of excuses” for delay, none of which the
court deemed valid, and ordering defendants to provide a written filing within six days detailing
the location and status of documents requested); Ambac Assurance Corp. v. U.S. Bank Nat’l
Ass’n, No. 117CV2614WHPKHP, 2020 WL 526404, at *2 (S.D.N.Y. Feb. 3, 2020) (granting
motion to compel discovery where counsel for non-party subpoena recipient repeatedly failed to
reply to party’s counsel for months, and failed to meet two agreed-upon production dates, and
ordering non-party subpoena recipient to comply and produce documents within a month or
“face sanctions”). Courts have also granted motions to compel where a party has ignored
previous orders requiring full compliance with a subpoena. See, e.g., Fairfield Fin. Mortg. Grp.
v. Luca, No. CV06-5962 (JS)WDW, 2008 WL 5001105, at *5 (E.D.N.Y. Nov. 19, 2008) (“[T]he
plaintiff seeks yet another order compelling the . . . defendants’ full compliance with the earlier
orders, and the court will once again order them to comply.”).
Here, despite the Court’s Orders granting Vale’s Application more than ten months ago
and denying Perfectus’s motion to quash more than four months ago, Perfectus still has
significant gaps in its production. More disturbingly, Perfectus’s new counsel appears to have
been specifically selected to obstruct discovery and has refused to engage with Vale.9
Vale therefore respectfully requests that the Court grant Vale’s motion to compel
Perfectus’s compliance with Vale’s discovery requests, and to require Perfectus to complete its
production of documents responsive to Vale’s subpoena by the later of June 23, 2021 or one
week after the Court’s order.
Separately, the Court invited Vale to move to disqualify Perfectus’s new counsel by the
date hereof. Concerned that the replacement of counsel will lead to even further delay, Vale has
elected not to do so. However, given the lack of independence of APM, as demonstrated in
Vale’s May 4, 2021 letter to the Court, ECF No. 84, Vale requests that the Court not only set a
strict deadline for the completion of Perfectus’s production, but that it (i) conduct a hearing at
which Perfectus’s new counsel can explain to the Court the measures he is taking to ensure
complete compliance with Perfectus’s discovery obligations, and (ii) make clear to client and
counsel alike that sanctions will be imposed in the event of non-compliance with what will be the
Court’s third order on this subject.

9

The APM law firm, and Doron Levy in particular, have served as counsel for BSGR (the Steinmetz entity
against whom Vale has an over $2 billion judgment for perpetrating a fraud against it), BSGR’s direct parent, Nysco
Corp., and its indirect parent the Balda Foundation (whose primary beneficiary is Steinmetz). ECF No. 84 at 2. Mr.
Levy and APM represent Nysco as Israeli counsel in Guernsey administration proceedings for BSGR. Id. Mr. Levy
has numerous other connections to Steinmetz, including as an advisor to the Balda council and as a board member of
Nysco (among other Steinmetz entities). Id. at 3. In 2017, Levy was detained alongside Steinmetz in connection
with a money laundering investigation culminating in Steinmetz’s criminal conviction in Romania last year. Id. at 3.

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Respectfully submitted,
/s/ Jeffrey A Rosenthal
Jeffrey A. Rosenthal
[e-mail]
Lisa M. Schweitzer
[e-mail]
Lisa Vicens
[e-mail]
CLEARY GOTTLIEB STEEN & HAMILTON LLP
One Liberty Plaza
New York, New York 10006
T: 212-225-2000
F: 212-225-3999
Counsel for Vale S.A., Vale Holdings B.V., and Vale
International S.A.
cc: Counsel of Record via ECF