Lake Holding & Finance S.A.
MEMORANDUM AND ORDER re: 27 AMENDED MOTION to Intervene, filed by Margarita Belyak, Anastasia Belyak, Mikhail Belyak; 30 Letter, filed by Yulia Rempel, Larisa Rempel, Garri Rempel, Igor Rempel; 29 Letter filed by Lake Holdi ng & Finance S.A. For the foregoing reasons, the Belyak parties' amended motion to intervene, Docket Entry No. 27, is granted. The petitioner's objection, Docket Entry No. 29, is overruled. The Rempel parties' request to "pe rmit the intervention on consent," Docket Entry No. 30, is denied. On or before February 23, 2021, the Belyak parties shall serve and file any opposition to the petition. Any reply may be served and filed on or before March 2, 2021. SO ORDERED. (Responses due by 2/23/2021. Replies due by 3/2/2021.) (Signed by Magistrate Judge Kevin Nathaniel Fox on 2/16/2021) (va)
Case 1:20-mc-00652-RA-KNF Document 31 Filed 02/16/21 Page 1 of 7
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE APPLICATION OF
LAKE HOLDING & FINANCE S.A.,
KEVIN NATHANIEL FOX
UNITED STATES MAGISTRATE JUDGE
MEMORANDUM AND ORDER
20-MC-652 (RA) (KNF)
On December 2, 2020, petitioner Lake Holding & Finance S.A. made an application for
an order pursuant to 28 U.S.C. § 1782 “to obtain discovery in the form of subpoenas to be served
on certain banks,” namely, “UBS AG; Societe Generale / SG Private Bank; Banque Lombard
Odier & Cie AG (aka Lambert Odier Darier Hentsch & Cie); CIM Banque SA; Kookmin Bank
(Korea); Credit Suisse; PJSC Sberbank; Bank of America, N.A.; Citibank, N.A.; Merrill Lynch
Capital Corporation; Union Bancaire Privee CBI-TDB, Geneva; and BSI SA, Lugano,
Switzerland (collectively, the “Banks”).” The subpoenas seek the following “documents located
in the United States and in this Judicial District for use in the following pending and
contemplated foreign proceeding(s)”:
1. Copies of any orders, instructions or wire transfers received from any person or
entity (including but not limited to, any payor/transferor bank to a
payee/transferee bank) for the benefit or credit of, or with any reference to any
of the following entities and persons (hereinafter, the “Transferees”):
• Mikhail Belyak
• Anastasia Belyak
• Igor Rempel
• Garri Rempel
• BTR Build To Rent Group Limited
• Related Party or Related Parties
• Cyprus-based Respondents or Respondents
in which the Bank has acted as either as direct transfer bank or as the
intermediary or correspondent bank, together with any electronic and/or paper
records thereof for the period beginning January 1, 2012 to the present.
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2. Copies of any other documents in the possession of the Bank relating to the
Transferees, including all documents to be produced pursuant to the annexed
Order Granting Lake Holding’s Section 1782 Application.
The petitioner asserts that it
intends to use the requested discovery to investigate, locate, and ultimately
bring proceedings (either in the existing Foreign Proceedings or elsewhere) to
satisfy the Judgments against the assets of Defendants inside or outside of Cyprus,
France, and Monaco or in relation to the following entities that Lake Holding
believes are or were “substantially connected,” a fraudulent transferee, or successor
in interest to, or an alter ego of Defendants.
On December 14, 2020, Mikhail Belyak, Anastasia Belyak, and Margarita Beliak (“the
Belyak parties”) made a motion to intervene, pursuant to Rule 24 of the Federal Rules of Civil
Procedure. On January 29, 2021, Igor Rempel, Garri Rempel, Yulia Rempel and Larisa Rempel
(“the Rempel parties”) made a motion to intervene pursuant to Rule 24 of the Federal Rules of
Civil Procedure. On February 1, 2021, the Court denied the motions to intervene without
prejudice for failure to comply with Local Civil Rule 7.1 of this court. See Docket Entry Nos. 20
and 21. Motions for reconsideration of the Court’s February 1, 2021 orders were denied. See
Docket Entry Nos. 25 and 26. On February 8, 2021, the Belyak parties filed their amended
motion to intervene.
By a letter dated February 10, 2021, the petitioner states, “for the record that, at this
point, Lake Holding takes no position on the Belyak parties’ renewed motion to intervene.”
Docket Entry No. 29. Notwithstanding its assertion that it “takes no position on the Belyak
parties’ renewed motion to intervene,” the petitioner “objects to the Belyak parties’ filing of the
appellate brief in the pending appeal from the Florida state court judgment enforcement case.
This separate action is pending on its own track, and certainly has no impact on whether Lake
Holding may seek discovery on the Rempel, BTR and related parties set forth in the application.”
The petitioner contends:
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We also received an inquiry from the Rempel parties’ counsel, on Monday, as to
whether Lake Holding consents to their intervention, and thus, just want to reiterate
that Lake Holding requests that its application be ruled upon at the Court’s earliest
convenience and that at this point, both the Rempel parties and the Belyak parties
have had ample time to submit any opposition as it has been two months since the
original date of the petition, filed on December 2, 2020.
On February 10, 2021, the Rempel parties filed a letter “in response to Lake Holding’s
letter of February 10, 2021, apparently requesting that the Rempel Parties and the Belyak Parties
file their substantive opposition to Lake Holding’s application.” Docket Entry No. 30. The
Rempel parties’ counsel asserts, “my clients cannot do so until the Court grants the motion to
intervene, which was denied without prejudice. In light of Lake Holding’s letter and its prior
consent to the Belyak Parties’ motion to intervene, it is respectfully submitted that the Court
should permit the interventions on consent.”
AMENDED MOTION TO INTERVENE DOCKET ENTRY NO. 27
The movants argue that each of them has a right to intervene under Rule 24(a) and the
Court should permit each of them to intervene pursuant to Rule 24(b). They assert that: (i) “there
is no ‘adjudicative’ proceeding pending in any of the referenced foreign jurisdictions”; rather, the
proceedings at issue “are post-judgment garnishment and enforcement actions that seek the
enforcement of a number of judgments entered by a Moscow court in favor of Lake Holding and
against Mikhail Belyak, a Russian citizen and Moscow resident (the “Moscow Judgments”)”; (ii)
the Moscow Judgments “are the subject of two pending Florida state court proceedings brought
by Lake Holding over one year before Lake Holding initiated this proceeding, one of which has
given rise to a pending Florida appellate court proceeding”; and (iii) “[t]he pendency of these
prior parallel state court actions resulting in Florida filings by Lake Holding over a year ago
raises a number of jurisdictional and federal issues that must be addressed before the requested §
Case 1:20-mc-00652-RA-KNF Document 31 Filed 02/16/21 Page 4 of 7
1782 discovery is allowed.” The movants contend that the motion is timely because it was filed
only two days after the Court “clarified its ruling denying the initial motion.” The interest of
each movant is not in dispute because the petitioner seeks discovery from or related to each of
the Belyak parties, including locating bank accounts, locating assets, locating trading partners,
identifying whether each has conveyed his or her assets to “one or more of the Related Parties,”
and locating “the Related Parties’ bank accounts” and assets. Given the confidential and
proprietary nature of the information requested, due process requires that each of the Belyak
parties be given an opportunity to intervene and voice an objection to the subpoenas. The
Belyak parties assert that their due process interest in protecting confidential information and
defending themselves in foreign proceedings will be impaired absent intervention and none of
their interests is represented adequately by any of the potential subpoena targets or others.
Moreover, the petitioner consents to the Belyak parties’ intervention. Alternatively, the Court
should permit intervention under Rule 24(b) because no undue delay or prejudice to the
petitioner exists and intervention is in accordance with the Federal Rules of Civil Procedure. In
support of their motion, the movants submitted a declaration by their attorney with Exhibit 1,
“the Initial Brief of Appellant, Mikhail Borisovich Belyak, dated December 7, 2020, which was
filed in the Third District Court of Appeal, State of Florida.”
Rule 24 of the Federal Rules of Civil Procedure provides for intervention as follows:
(a) Intervention of Right. On timely motion, the court must permit anyone to
(1) is given an unconditional right to intervene by a federal statute; or
(2) claims an interest relating to the property or transaction that is the subject of the
action, and is so situated that disposing of the action may as a practical matter
impair or impede the movant's ability to protect its interest, unless existing parties
adequately represent that interest.
(b) Permissive Intervention.
Case 1:20-mc-00652-RA-KNF Document 31 Filed 02/16/21 Page 5 of 7
(1) In General. On timely motion, the court may permit anyone to intervene who:
(A) is given a conditional right to intervene by a federal statute; or
(B) has a claim or defense that shares with the main action a common question of
law or fact.
Fed. R. civ. P. 24(a)-(b).
“In order to intervene as a matter of right under Fed.R.Civ.P. 24(a)(2), an applicant
must (1) timely file an application, (2) show an interest in the action, (3)
demonstrate that the interest may be impaired by the disposition of the action, and
(4) show that the interest is not protected adequately by the parties to the action.”
New York News, Inc. v. Kheel, 972 F.2d 482, 485 (2d Cir.1992). “Failure to satisfy
any one of these requirements is a sufficient ground to deny the application.”
Catanzano by Catanzano v. Wing, 103 F.3d 223, 232 (2d Cir.1996) (quoting
Farmland Dairies v. Comm'r, 847 F.2d 1038, 1043 (2d Cir.1988)) (internal
quotation marks omitted).
In re Bank of New York Derivative Litig., 320 F.3d 291, 300 (2d Cir. 2003).
“Substantially the same factors are considered in determining whether to grant an application for
permissive intervention.” Id. at n.5.
APPLICATION OF LEGAL STANDARD
The petitioner does not oppose the motion or assert it is untimely. The motion was made
after the Court denied the movants’ motion for reconsideration; thus, it is timely. Each of the
Belyak parties is identified by name in the petition and each movant has a direct interest in this
proceeding as the subpoenas seek confidential and proprietary information concerning each
movant. Since each movant has a direct interest in this proceeding, each movant’s interest may
be impaired by the disposition of the petition, entitling each movant to due process. See
Mathews v. Eldridge, 424 U.S. 319, 333, 96 S. Ct. 893, 902 (1976) (“The fundamental
requirement of due process is the opportunity to be heard “at a meaningful time and in a
meaningful manner.”). The subpoenas proposed by the petitioner are directed to third parties,
not under the control of any of the Belyak parties. Absent intervention, their interests would not
Case 1:20-mc-00652-RA-KNF Document 31 Filed 02/16/21 Page 6 of 7
be protected. The Court finds that the Belyak parties satisfied the elements of intervention as of
right and granting their amended motion to intervene is warranted.
PETITIONER’S LETTER DOCKET ENTRY NO. 29
In its February 10, 2021 letter, the petitioner stated, “for the record that, at this point,
Lake Holding takes no position on the Belyak parties’ renewed motion to intervene.” Having
taken “no position on the Belyak parties’ renewed motion to intervene,” including not opposing
it, the petitioner has waived any objections to the motion; thus, the petitioner’s objection “to the
Belyak parties’ filing of the appellate brief in the pending appeal from the Florida state court
judgment enforcement case,” Docket Entry No. 29, is overruled.
THE REMPEL PARTIES’ LETTER DOCKET ENTRY NO. 30
After the Court denied the Rempel parties’ motion for reconsideration of the Court’s
February 1, 2021 order, the Rempel parties did not file a motion to intervene. Instead, they
assert in their February 10, 2021 letter, without any legal authority in support, that, “[i]n light of
Lake Holding’s letter and its prior consent to the Belyak Parties’ motion to intervene, it is
respectfully submitted that the Court should permit the interventions on consent.” However,
despite asserting in its February 10, 2021 letter that “[w]e also received an inquiry from the
Rempel parties’ counsel, on Monday, as to whether Lake Holding consents to their intervention,”
the petitioner did not provide its consent to the Rempel parties’ intervention. The Rempel parties
do not explain how the petitioner’s “prior consent to the Belyak Parties’ motion to intervene” is
relevant to them. Moreover, even assuming that the petitioner consented to the Rempel parties’
motion to intervene, which it did not, the petitioner’s consent, without satisfying each of the
elements of intervention as of right, see Peterson v. United States, 41 F.R.D. 131, 135 (D. Minn.
1966) (“Counsel for plaintiffs stated at the hearing that plaintiffs had no objection to the
Case 1:20-mc-00652-RA-KNF Document 31 Filed 02/16/21 Page 7 of 7
intervention. But consent of the representatives does not entitle one to intervention as a matter of
right”), or permissive intervention, is not sufficient to permit intervention. Not having made a
motion to intervene, the Rempel parties failed to establish that permitting “the intervention on
consent” is warranted.
For the foregoing reasons, the Belyak parties’ amended motion to intervene, Docket
Entry No. 27, is granted. The petitioner’s objection, Docket Entry No. 29, is overruled. The
Rempel parties’ request to “permit the intervention on consent,” Docket Entry No. 30, is denied.
On or before February 23, 2021, the Belyak parties shall serve and file any opposition to the
petition. Any reply may be served and filed on or before March 2, 2021.
Dated: New York, New York
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