[00:00:00] Speaker 00: Case number 20-5356, United States of America versus all assets held at Predict Swiss Guernsey Limited, account numbers 41610 and 41950. [00:00:11] Speaker 00: Sweet Guernsey Limited, account numbers 41610 and 41950. [00:00:15] Speaker 00: In the name of Cementia Limited, as trustees of the Balford Trust, last valued at approximately $147.9 million in United States at L [00:00:26] Speaker 00: The Van Luzarenko at balance. [00:00:27] Speaker 00: Mr. Stassen for the balance. [00:00:29] Speaker 00: Mr. Noll for the Epoley United States of America. [00:00:35] Speaker 04: Good morning. [00:00:35] Speaker 04: Good morning. [00:00:36] Speaker 04: It's an honor to be here. [00:00:37] Speaker 04: Good morning. [00:00:41] Speaker 04: Just to start two seconds of background. [00:00:45] Speaker 04: This is a forfeiture case that with proceedings both [00:00:49] Speaker 04: in Guernsey and other countries, as well as here in the United States. [00:00:52] Speaker 04: It's a fairly limited, narrow appeal that we have in front of the court today, and that relates to the restraining order that was entered by the court at the beginning of the case here in the United States, and whether or not that order entered can act as a foreign anti-suit injunction barring litigation for proceeding in Guernsey. [00:01:12] Speaker 04: One of the things that's really interesting about this appeal is in the brief filed by the United States, [00:01:19] Speaker 04: in response to our appellate brief, for the very first time the government admits that if there were independent proceedings in Guernsey, then Mr. Lazarenko would be permitted to litigate in Guernsey. [00:01:33] Speaker 04: That is on page 38 and 39 of their brief. [00:01:38] Speaker 04: Well, we were surprised by that admission because it's very clear that there are in fact, there is in fact proceedings in Guernsey. [00:01:47] Speaker 02: Could I ask you exactly what has happened in Guernsey in the last six years? [00:01:58] Speaker 02: We know that Lazarenko filed something in Guernsey in 2015 seeking to lift the Guernsey stay. [00:02:11] Speaker 02: And then we know this anti-soup [00:02:15] Speaker 02: injunction was generated in the DDC here, but what, if anything, has the Guernsey court done in response to Lazarenko's 2015 filing? [00:02:32] Speaker 04: We had correspondence with the Department of Justice regarding the department's view that the filing in Guernsey violated the restraining order. [00:02:42] Speaker 04: We didn't think it did. [00:02:44] Speaker 04: Our application filed there. [00:02:46] Speaker 04: We don't think Guernsey that either, because they issued a summons in the case in Guernsey, but we agreed with the Department of Justice that we would ask our lawyer in Guernsey to stay. [00:02:55] Speaker 04: That application allow us to proceed before the district court to get clarification. [00:03:02] Speaker 03: OK, so it's it's been stayed at your request for on hold waiting and how much can you just tell us at this point how much money is in this Balford trust? [00:03:14] Speaker 04: Yes, it's approximately $180 million. [00:03:16] Speaker 06: So can I just ask you, I'm struggling to understand your position as to why you don't think that activity in RNZ, the kinds of activities that you all undertook, would violate the restraining order. [00:03:37] Speaker 04: Yeah. [00:03:38] Speaker 04: I think I need to an answer that I have to say that the application that we filed earlier is different than what we would do now. [00:03:50] Speaker 04: What's been clear is that at some point in time, this case in the United States will come to an end. [00:03:56] Speaker 04: If the United States gets a judgment, it has to go to Guernsey and try to see if the Guernsey authorities will honor that judgment or to what extent they won't force it. [00:04:05] Speaker 04: So the litigation in Guernsey has to go forward at some point. [00:04:08] Speaker 04: What we would like to do is go to Guernsey and have a determination made under Guernsey law. [00:04:13] Speaker 04: What is forfeitable under Guernsey law? [00:04:16] Speaker 06: Why? [00:04:17] Speaker 06: Why do you want to do that now? [00:04:18] Speaker 04: Because we have to do that anyway. [00:04:20] Speaker 06: This case is, but what difference is this is abuse of discretion. [00:04:23] Speaker 06: The district judge says, I hear your motion. [00:04:26] Speaker 06: I know that you would like to do that, but I'm saying, no, let me go ahead and finish my proceeding. [00:04:33] Speaker 06: So what, why do you want to do that under these circumstances? [00:04:37] Speaker 03: Yeah, I mean, there's sort of more. [00:04:40] Speaker 03: Let me just modify that question slightly. [00:04:42] Speaker 03: If you don't mind, why is it an abuse of discretion for the district court to have said no? [00:04:48] Speaker 04: I'm sorry. [00:04:48] Speaker 04: I didn't hear. [00:04:49] Speaker 04: Why is it? [00:04:49] Speaker 03: This is why it's not. [00:04:51] Speaker 03: I mean, as Judge Jackson says, it's clear what you want to do. [00:04:56] Speaker 03: But but to prevail here, you have to show that Judge Friedman's denial of emotion was not just was an abuse of discretion, right? [00:05:06] Speaker 03: So you need to make your argument in those terms. [00:05:09] Speaker 04: Yeah, well, we do think it was an abusive. [00:05:12] Speaker 03: Why? [00:05:12] Speaker 03: That's what I want to know. [00:05:13] Speaker 03: Not just that you disagree with him. [00:05:15] Speaker 03: Why was it an abuse of discretion for him to decide the case the way he did? [00:05:20] Speaker 03: Well, because we're not reviewing this de novo. [00:05:22] Speaker 03: You can't just stand here and make an argument that this is what you want to do and you think it's better. [00:05:26] Speaker 03: You have to convince us that the district judge abused the discretion and deny your motion. [00:05:32] Speaker 04: Well, we would argue it's abuse of discretion when the case law is clear that you can't enter. [00:05:37] Speaker 04: We have principles of comedy here. [00:05:40] Speaker 04: We also have whether there's a statutory authority. [00:05:43] Speaker 04: Well, the government says you waived it. [00:05:47] Speaker 03: Your statutory argument. [00:05:48] Speaker 04: Yeah. [00:05:48] Speaker 03: What do you mean? [00:05:49] Speaker 03: Yeah, they did. [00:05:50] Speaker 03: That's their argument. [00:05:51] Speaker 03: They said it's waived. [00:05:51] Speaker 03: And I didn't see any place in your brief where you really raised it. [00:05:55] Speaker 04: Yeah. [00:05:55] Speaker 04: Well, with regard to waiver, [00:05:58] Speaker 04: Any time a lawyer sees waiver in a brief, your hair tickles on the back of your neck. [00:06:03] Speaker 04: And then you realize that's one. [00:06:05] Speaker 03: What did you just say? [00:06:06] Speaker 04: I said, any time you see the word waiver in a brief, a lawyer gets nervous. [00:06:10] Speaker 04: Right. [00:06:10] Speaker 04: Of course I did. [00:06:11] Speaker 04: And then you see it's just a sentence and you say, OK, it's just a sentence, but you still want to look at it. [00:06:16] Speaker 04: OK. [00:06:17] Speaker 04: And clearly here at multiple points in time, [00:06:20] Speaker 04: We raise the specific 983 J issue with the district court. [00:06:25] Speaker 03: Tell me the best. [00:06:25] Speaker 03: Tell me your best point right now to the place where you think you most clearly raised it for the benefit of the district court. [00:06:33] Speaker 04: The most clear example is would be docket number 17. [00:06:38] Speaker 04: Oh, let me see here. [00:06:47] Speaker 04: Docket number 741. [00:06:49] Speaker 03: pocket 7.41. [00:06:51] Speaker 04: Yes, and what is it we filed a after the rjr Nabisco case came down from the Supreme Court. [00:06:58] Speaker 04: We had a pending motion before the district court regarding specifically the extraterritorial reach of what the district court could do or not to and the district court said it did not want to issue any rulings regarding extraterritorial reach until after the Supreme Court rule and rjr Nabisco. [00:07:15] Speaker 04: that docket number 741 is our specific supplemental brief addressing the extraterritorial reach or how RJR came down on interpreting statutes and whether or not they have extraterritorial reach. [00:07:30] Speaker 04: So that issue was clearly raised before the district court. [00:07:34] Speaker 04: District court ruled it did not. [00:07:37] Speaker 06: But I'm sorry, if I look at docket 741, am I gonna see arguments about 938J? [00:07:44] Speaker 06: I thought that's what what I guess I'm confused. [00:07:48] Speaker 04: Yeah, I mean, it came up with a very strict context, but so there's been much litigation district court regarding what's extra territorial or not. [00:07:58] Speaker 04: You know, which statutes, you know, what can be applied extra territorially or not. [00:08:02] Speaker 04: With regard to 983J, we dropped a specific... I mean, the court had already ruled on extraterritorial application. [00:08:11] Speaker 04: We've dropped a specific footnote in our brief regarding the restraining order in which we sort of re-raise the extraterritorial issue. [00:08:20] Speaker 06: Okay. [00:08:21] Speaker 06: Can I get back to the question that I was sort of trying to get at, which is, even if [00:08:29] Speaker 06: we are deciding whether the district court was right or wrong, sort of in his determination about letting you go, which I take judge fatal point that we're really not doing that, but let's assume we are. [00:08:42] Speaker 06: What is it that you get out of going back and doing what it is you want to do now? [00:08:49] Speaker 06: Why are you going saying I need to go to Guernsey in this moment? [00:08:54] Speaker 04: There are two reasons. [00:08:55] Speaker 04: One is, [00:08:56] Speaker 04: We'd like to be heard on the merits somewhere. [00:08:58] Speaker 04: That's number one. [00:08:59] Speaker 04: Number two, the case has been pending for 18 years. [00:09:02] Speaker 04: This case isn't going to end for years to come. [00:09:05] Speaker 04: The Guernsey trust at $180 million isn't growing because it's not, it's not a, it's not. [00:09:11] Speaker 06: Aren't they managing it? [00:09:12] Speaker 04: They're not there. [00:09:13] Speaker 04: They're basically getting an interest rate. [00:09:17] Speaker 03: Why does the name of the case say 125 million? [00:09:23] Speaker 04: Um, [00:09:23] Speaker 04: because at some point early in the case, it was invested appropriately as trustees would invest. [00:09:30] Speaker 04: And they switched, we think, after their restraining order, the trustees. [00:09:34] Speaker 04: But understand, because of the restraining order, we can't even contact the trustees to say, how are you investing? [00:09:39] Speaker 04: Can you change your investment? [00:09:40] Speaker 06: Because- You don't control that anyway. [00:09:42] Speaker 06: I thought it was an irrevocable trust. [00:09:43] Speaker 06: I thought the trustees get to make the decision. [00:09:47] Speaker 06: So even if you could contact them and say, do it some other way, don't they have the discretion to do what they want? [00:09:54] Speaker 04: Two part answer. [00:09:55] Speaker 04: One is under U.S. [00:09:56] Speaker 04: law, how a trust is titled is not determined by what kind of trust it actually is. [00:10:01] Speaker 04: And it's our view. [00:10:03] Speaker 04: This wasn't so much briefed a little bit, but this is not we don't believe is that we don't think it's actually an irrevocable trust by U.S. [00:10:10] Speaker 04: law. [00:10:12] Speaker 04: And the IRS would certainly take the position it's not an irrevocable trust that Mr. Lazarepo controls its trust. [00:10:19] Speaker 04: based on the way it's set up. [00:10:20] Speaker 04: So although it's titled revocable trust under U.S. [00:10:23] Speaker 04: law and certainly the way the U.S. [00:10:25] Speaker 04: taxing authorities view it, it's not irrevocable. [00:10:27] Speaker 06: Okay. [00:10:27] Speaker 06: So if we disagree, let's say we hear your arguments right now as to why you think it's important to allow you to go forward. [00:10:35] Speaker 06: If we disagree with you, do you lose? [00:10:38] Speaker 04: If you disagree with the reasons? [00:10:39] Speaker 06: Yeah. [00:10:40] Speaker 06: If we think, if we agree with Judge Friedman and think that's not a good enough reason, are we done here? [00:10:45] Speaker 04: I don't think so because [00:10:47] Speaker 04: The other issue is the Royal Court of Guernsey. [00:10:50] Speaker 04: The Royal Court of Guernsey started proceedings. [00:10:53] Speaker 04: The Royal Court of Guernsey issued a summons. [00:10:56] Speaker 04: The Royal Court of Guernsey has an ability or should have an ability to weigh in on the issues that we've raised in our brief. [00:11:04] Speaker 04: Was the case started in Guernsey based on misrepresentations? [00:11:07] Speaker 04: The government says no. [00:11:08] Speaker 04: We say yes. [00:11:09] Speaker 04: That's for the Royal Court of Guernsey to determine. [00:11:11] Speaker 03: But why is that an answer to what Judge Jackson just [00:11:14] Speaker 03: I don't understand that. [00:11:16] Speaker 03: I'm sorry. [00:11:17] Speaker 03: Why is that an answer to what Judge Jackson just asked you? [00:11:21] Speaker 03: Maybe I misunderstood you, but. [00:11:24] Speaker 06: You just gave yet another reason why we should allow you to go to Guernsey, assuming we were making the decision in the first instance. [00:11:32] Speaker 06: I'm asking you if we disagree with you about that, if we don't think [00:11:37] Speaker 06: giving the World Court of Guernsey the opportunity to weigh in on this is important, or allowing you to contact the trustees to make some recommendations about how to handle the trust is important. [00:11:50] Speaker 06: If we disagree with your argument, is that the essence of your appeal and we're done? [00:12:00] Speaker 04: I, you know, obviously if the court disagreed with all of our arguments, then we wouldn't be done. [00:12:04] Speaker 06: I guess I'm trying to set up an understand what it is you want us to do. [00:12:09] Speaker 06: Do you want us to make the determination or are we looking at whether judge Friedman abused his discretion in deciding that the arguments you've made right now, he's going to say, no, I'd like to keep going here and no one trusts us a touch the money. [00:12:28] Speaker 06: Yeah. [00:12:29] Speaker 04: Well, um, [00:12:31] Speaker 04: First, Judge, we're not asking Judge Friedman's order restraining order to be altered at all with regard to, you know, preventing dissipation or any of those things that are in his order. [00:12:43] Speaker 04: The only thing that we're talking about in this order, it's very limited. [00:12:46] Speaker 04: They are interpreting that any language that in his order, like any other action to include a foreign anti suit injunction. [00:12:54] Speaker 04: So we didn't understand that to be in the order. [00:12:56] Speaker 04: The Guernsey authorities didn't understand that to be in the order. [00:12:59] Speaker 04: We filed an application. [00:13:00] Speaker 04: DOJ says that's a violation. [00:13:02] Speaker 04: We asked Judge Freeman, can you clarify this? [00:13:05] Speaker 04: Because we didn't think it was a violation. [00:13:06] Speaker 03: He thought it was a violation. [00:13:07] Speaker 03: He thought it was a violation. [00:13:08] Speaker 03: He didn't think there was any doubt about it. [00:13:12] Speaker 03: He thought it was a violation. [00:13:13] Speaker 03: Yeah, but I just said he didn't think there was any doubt about it. [00:13:16] Speaker 03: I mean, his language is pretty strong. [00:13:18] Speaker 03: He said it. [00:13:19] Speaker 03: It's beyond. [00:13:20] Speaker 03: What do you say he said? [00:13:22] Speaker 03: He said. [00:13:22] Speaker 03: He said. [00:13:25] Speaker 03: He says it's. [00:13:27] Speaker 03: He says it's. [00:13:33] Speaker 03: He says. [00:13:35] Speaker 03: He says. [00:13:40] Speaker 03: He says the last wrinkle now to contend. [00:13:48] Speaker 03: He says it's strange credulity for Lazarenko to now contend. [00:14:04] Speaker 03: It is Guernsey application, et cetera, et cetera. [00:14:07] Speaker 03: Strange credulity. [00:14:11] Speaker 04: That's right. [00:14:11] Speaker 04: And that application was a broader in scope. [00:14:17] Speaker 04: The we weren't asking that application first of all, just to get a determination on Guernsey law. [00:14:24] Speaker 04: What's four foot under Guernsey law was a little broader in the application. [00:14:28] Speaker 04: That's not what we're asking for now. [00:14:30] Speaker 06: So what is it your position that a district judge like Judge Friedman who has an in rem proceeding before [00:14:41] Speaker 06: cannot issue an order that prevents parties from engaging in litigation that would potentially deplete or do something to the assets that are under consideration in his meeting. [00:14:55] Speaker 06: That's your position. [00:14:57] Speaker 04: It's, uh, it's a little nuanced because what happens here is regardless of the order of the proceedings, if the proceedings go all the way to judgment here in the United States with no litigation whatsoever, [00:15:11] Speaker 04: He has, Judge Freeman has a jurisdiction to do that. [00:15:15] Speaker 04: We're not questioning that. [00:15:16] Speaker 04: What happens then as Judge Freeman has said, the effectiveness of that order will be determined in Guernsey by the Guernsey course when it applies Guernsey law. [00:15:25] Speaker 04: It's the effectiveness. [00:15:26] Speaker 06: He didn't just say that that's the law, but fine. [00:15:29] Speaker 06: That means we have to go to Guernsey eventually. [00:15:32] Speaker 06: My question is an order in the interim that he issued that says you can't go to Guernsey now. [00:15:40] Speaker 06: Why is that abuse of discretion against the law or anything else? [00:15:45] Speaker 04: Yeah, well, first of all, we say it's abuse of discretion against the law because the law is clear about the very restrictive ability to enter a foreign anti suit injunction. [00:15:57] Speaker 04: That laws, you know, we just just assume for a moment. [00:16:00] Speaker 03: We think we can figure that one out. [00:16:03] Speaker 03: Let's assume we agree with the government that it's either waived or you're wrong now in you. [00:16:11] Speaker 03: That you agree that it's waived or or that you're wrong that the district court does have the statutory authority. [00:16:18] Speaker 03: Now what's the basis for an abuse of discretion argument? [00:16:22] Speaker 04: So the the the court is ruling that 983 J gives the authority to the court to issue an undersuit injunction. [00:16:28] Speaker 03: Yeah, assume we think that's the case. [00:16:31] Speaker 04: We probably lose it. [00:16:32] Speaker 04: We probably lose. [00:16:34] Speaker 03: Yeah, OK, thank you. [00:16:35] Speaker 02: Thank you. [00:16:35] Speaker 02: Can I ask you a couple of questions about timing? [00:16:39] Speaker 02: So. [00:16:40] Speaker 02: On the front end of the sequence, the United States went to Guernsey and asked for assistance with regard to property located in Guernsey. [00:16:56] Speaker 02: The Guernsey court entered the restraining order and it said, very specifically, any person affected by the order could apply for a discharge. [00:17:12] Speaker 02: Suppose I think it would have been troubling to prevent Lazarenko from doing that in 2004, 2005, whatever, as permitted by the Guernsey Court. [00:17:30] Speaker 02: That didn't happen. [00:17:35] Speaker 02: The proceedings in the United States, they went on for a decade. [00:17:41] Speaker 02: And Judge here is in the middle of all that. [00:17:48] Speaker 02: And then a decade in, Lazarenko says, oh, but now I want to go back to Guernsey mid proceeding. [00:17:56] Speaker 02: Why doesn't the comedy analysis change very fundamentally? [00:18:03] Speaker 02: Well, the Guernsey court says you can come challenge this order if you want. [00:18:09] Speaker 02: normally understand that to mean, but if you don't, go litigate somewhere else for a decade and then come back then. [00:18:22] Speaker 02: That's a very strange notion of comedy. [00:18:28] Speaker 04: Yeah, I think it's unclear how the Guernsey court will, we don't know how the Guernsey court will address or react to [00:18:37] Speaker 04: to that delay. [00:18:38] Speaker 02: Is there any reason to think that under Guernsey law a general statement like that saying here's an order and come challenge it if you want means come back a decade later in the middle of litigation elsewhere? [00:19:05] Speaker 04: Well, no, I don't know. [00:19:06] Speaker 04: I don't want to guess how the Guernsey Court will react. [00:19:09] Speaker 04: The thing that we know is Guernsey Court is not familiar or has not been advised as to, for example, how its case started. [00:19:18] Speaker 04: And it has not had the opportunity to weigh in on Guernsey law, the forfeitability of the assets under Guernsey law, which it has to do at some point. [00:19:27] Speaker 02: All right, so let me ask you, so let's go to the back end, but another timing question, which is you want [00:19:35] Speaker 02: You want to litigate two issues in Guernsey. [00:19:38] Speaker 02: One is whether the original 2004 order was procured improperly. [00:19:47] Speaker 02: And the other is the forfeitability of the trusts under Guernsey law, correct? [00:19:53] Speaker 04: Correct. [00:19:54] Speaker 02: Is there any reason why you can't litigate those issues? [00:19:59] Speaker 02: at the conclusion of the BBC proceedings in the context of enforcement in Guernsey? [00:20:07] Speaker 04: Well, we have. [00:20:08] Speaker 04: The answer is probably yes. [00:20:10] Speaker 04: We have witnesses who are dying in this case. [00:20:13] Speaker 04: We had a primary witness who died last few months. [00:20:18] Speaker 04: The ability to litigate in Guernsey is going to be compromised by more delay. [00:20:22] Speaker 06: Did you make that argument to Judge Friedman as he decided whether or not to allow you to go off to Guernsey? [00:20:29] Speaker 04: We did make the argument to Judge Freeman regarding, we have a number of dispositive motions pending before Judge Freeman, including the fact that we don't believe the government has immiscible evidence to prove its case, the fact that witnesses are dying and have died. [00:20:44] Speaker 04: All of that is before Judge Freeman, and we have not had rulings yet on those motions. [00:20:49] Speaker 06: I mean, did you make it in the context of the decision that we're being asked to review today? [00:20:56] Speaker 04: I don't think that those specific arguments regarding witnesses dying, that was not made within the context of the 983J specific motion, no. [00:21:07] Speaker 04: But it's definitely been before the lower court is aware of it and has ruled on it. [00:21:13] Speaker 04: But the problem we have in this case is it's going to be literally years before this comes to completion. [00:21:20] Speaker 03: Mr. Lazarenko is not a... Judge Friedman knew that, right? [00:21:25] Speaker 04: Well, Judge Freeman controls his docket. [00:21:29] Speaker 03: He knew that and he denied your motion. [00:21:33] Speaker 04: Yes, he denied the motion. [00:21:34] Speaker 03: Unless either of my colleagues have any other questions. [00:21:39] Speaker 02: Just one more. [00:21:41] Speaker 02: Is the forfeitability of the Guernsey Trust under Guernsey law at issue in the DDC? [00:21:50] Speaker 04: Uh, Judge Freeman has decided he doesn't want to weigh into that. [00:21:54] Speaker 04: He's going to wait for the Gurns to decide that. [00:21:56] Speaker 02: Oh, so there's no, there won't be a race judicata problem. [00:22:00] Speaker 02: Your, your, your concerns with litigating on the back end are not legal ones about preclusion or not. [00:22:11] Speaker 02: These arguments not being cognizable in enforcement. [00:22:14] Speaker 02: They are practical ones about witnesses being unavailable and such. [00:22:20] Speaker 04: Um, [00:22:21] Speaker 04: there, it's hard to predict. [00:22:24] Speaker 04: There may be issues for which collateral estoppel or issue of occlusion or rest of the car to apply, but it really depends on how the litigation would go forward in Guernsey, how the Guernsey court would rule. [00:22:35] Speaker 02: The judge here doesn't want to get into the forfeit ability issue under under Guernsey law. [00:22:43] Speaker 02: That's correct. [00:22:44] Speaker 02: Okay. [00:22:45] Speaker 02: That's all I have. [00:22:46] Speaker 03: Okay. [00:22:47] Speaker 03: Thank you for your time. [00:22:48] Speaker 03: Yeah, we'll hear from the government now. [00:22:51] Speaker ?: Um, [00:22:54] Speaker 01: Thank you, Judge Tatel, and may it please the court. [00:23:09] Speaker 01: Andrew Noah on behalf of the United States. [00:23:12] Speaker 01: Given this morning's presentation, I intend to focus on the merits of Lazarenko's appeal, although I welcome any questions the court might have about the daughter's pending motion to intervene, which we've addressed in our brief. [00:23:22] Speaker 01: As to the merits of the appeal, the district court acted well within its discretion in maintaining a restraining order in this forfeiture action to preserve the availability of the defendant assets through judgment. [00:23:33] Speaker 01: That order is expressly authorized in 18 USC, section 983J, and continuing the restraint here accords with the statute's text, structure, and purpose. [00:23:43] Speaker 01: And under these circumstances, where the restraint that Lazarenko seeks to challenge in Guernsey arose only out of and is [00:23:50] Speaker 01: intended to serve protection of the U.S. [00:23:53] Speaker 01: action, we don't believe that that restraint presents a foreign anti-suit injunction concern. [00:23:59] Speaker 01: It's not a parallel proceeding. [00:24:00] Speaker 01: But even if you thought that the precedent relevant to anti-suit injunctions is informative here, we think that the restraining order below is clearly intended to protect the district court's ability to exercise its jurisdiction and serves important U.S. [00:24:13] Speaker 01: policies. [00:24:14] Speaker 06: Why would it have to be a parallel proceeding in order for the anti-stute injunction analysis to apply? [00:24:21] Speaker 06: I mean, it seems to me that it's at least connected. [00:24:27] Speaker 06: It's an ancillary kind of thing. [00:24:28] Speaker 06: And he wants to go now. [00:24:33] Speaker 06: Judge Friedman is saying no. [00:24:35] Speaker 06: So why isn't that [00:24:38] Speaker 06: The same kind of thing. [00:24:39] Speaker 06: I mean, right. [00:24:41] Speaker 06: Yeah, I understand your question. [00:24:44] Speaker 01: And the best I can describe it is that the concerns that motivate the anti student junction precedent is about preventing [00:24:51] Speaker 01: foreign country from exercising its own prescriptive jurisdiction over the same case and controversy, where there's two competing sovereigns seeking to apply their law to resolve a dispute. [00:25:01] Speaker 01: And that's simply not what we have here, at least with respect to the restraining order. [00:25:05] Speaker 01: I want to make a specific response to both your question, Judge Jackson, and Judge Katz's question about [00:25:11] Speaker 01: why it doesn't make sense to go now to kind of pre-term the enforcement question in Guernsey. [00:25:16] Speaker 01: And the reason for that is irrespective of whether the court or the foreign government nation where the property currently sits would enforce this forfeiture judgment to the extent we receive one. [00:25:30] Speaker 01: That doesn't undermine the validity and importance of the forfeiture judgment because if, say, Guernsey did not enforce the judgment, as soon as Lazarenko, his daughters, or anyone else moved the funds, say, to the United States, for example, with the actual forfeiture judgment, we could then go enforce it in a U.S. [00:25:48] Speaker 01: court where the funds now sit. [00:25:50] Speaker 06: I don't know if that helps you or hurts you with respect to the injunction suit point. [00:25:55] Speaker 06: In other words, to the extent that a foreign court's judgment concerning this property, these assets in its jurisdiction has some impact or could have some impact. [00:26:07] Speaker 06: Don't we have the same kinds of comedy concerns that animate the anti-injunction suit that we don't want another court? [00:26:16] Speaker 06: We want other courts in other countries to feel comfortable going ahead and allowing people to litigate even though we are litigating as well. [00:26:26] Speaker 01: Yes, Your Honor, and I think that's the reason why we don't dispute that once there is a judgment and there are enforcement proceedings in Guernsey. [00:26:32] Speaker 01: At that point, to the extent Guernsey law gives Lazarenko an interest to appear there, we don't dispute that he'll be able to do so. [00:26:38] Speaker 01: What he's trying to do here is to bring arguments about the enforcement or the eventual enforcement to the Guernsey court to lift a restraint that's just freezing the assets in place. [00:26:47] Speaker 01: He's essentially trying to proxy [00:26:49] Speaker 01: the enforcement question into the restraint proceeding. [00:26:51] Speaker 01: And all we're saying is to the extent that the question is whether the district court abused its discretion and not allowing him to go contest the restraint that's meant to keep the status quo and preserve the assets, that's not an abuse of discretion. [00:27:05] Speaker 01: And it won't pre-determine his ability to contest enforcement and currency raising the same arguments he wished to raise now at a later point, once the district court has determined whether there is a forfeited property here. [00:27:17] Speaker 01: And the importance for that is, [00:27:19] Speaker 01: To the extent that the Guernsey restraint is lifted now, we have real concerns and I think the district court had real concerns that Lazarenko could attempt to cause or the trustees who are actually the ones restrained could take some action that could cause dissipation of the assets. [00:27:33] Speaker 01: And because civil forfeiture depends on the specific identity of the assets, we can't really unwind that at the back end. [00:27:40] Speaker 01: It's really a concern to make sure that the assets are preserved. [00:27:44] Speaker 01: Now, I do wanna respond to my opposing counsel's point about our [00:27:48] Speaker 01: Claimed change in position about if that where we said if there were independent proceedings in currency, we have conceded that you might be able to appear there. [00:27:58] Speaker 01: What we said in our brief on pages, I think it was 37 and 38 is if there were independent forfeiture proceedings whereby currency as a sovereign. [00:28:06] Speaker 01: was seeking to forfeit the funds to itself. [00:28:08] Speaker 01: Presumably, Lazarenko could seek to participate in those. [00:28:11] Speaker 01: And that's exactly what happened with the Antigua proceedings, which Judge Friedman considered at the same time he considered the request to modify the injunction as to the Grintz proceedings and said, yes, Lazarenko can go to Antigua and can contest Antigua's attempt to forfeit the funds to himself. [00:28:28] Speaker 01: But to the extent he received some of those funds in settlement, [00:28:31] Speaker 01: or otherwise gains access to them again, those funds will then still be subject to the U.S. [00:28:36] Speaker 01: restraining order. [00:28:37] Speaker 01: And we are not saying that he can't later at the enforcement stage participate or if there was actually an effort by Guernsey to forfeit the funds to himself, he can't participate. [00:28:46] Speaker 01: What we're saying is [00:28:47] Speaker 01: can attempt to lift the restraint that exists solely because the currency court has chosen to enforce the restraint that the district court has been saying. [00:28:54] Speaker 06: This was sort of my question to him from the beginning, which is, is that what he's trying to do? [00:29:01] Speaker 06: Why is he going to currency? [00:29:03] Speaker 06: Is it because he's attempting to lift the restraint in effect by getting his hands on the assets or as he suggested at one point or many points in his brief, [00:29:14] Speaker 06: just to litigate kind of in the ether, this idea of whether or not, um, at the end of Judge Friedman's thing, he would be able to get the assets. [00:29:25] Speaker 06: Should that be the legal ruling that Judge Friedman gets? [00:29:28] Speaker 06: You understand what I'm saying? [00:29:30] Speaker 01: I do, but I think his arguments as to the latter, as to the fact that he thinks currency wouldn't enforce this judgment, which we dispute. [00:29:37] Speaker 01: Obviously the currency court has chosen to freeze the assets in light of this case, but [00:29:41] Speaker 01: If he's correct, he wants to then lift the restraint in the light of the fact that currency would not ultimately enforce the judgment. [00:29:48] Speaker 01: We think that raises a real risk of dissipation. [00:29:51] Speaker 01: Now, as to the other possible arguments, I just heard reference today about why they would seek to go to currency, whether it be because there's an investment issue about how the funds are being managed. [00:30:02] Speaker 01: or the kind of delay in prejudice arguments. [00:30:04] Speaker 01: Those are not arguments that were brought before the district court here as specific reasons to modify the restraining order. [00:30:10] Speaker 01: And I would point the court specifically to appendix page 56 where the restraining order says that an individual can't modify or seek to take action that would affect the value or availability of the funds without request to the district court and notice to the government. [00:30:27] Speaker 01: So it's possible that if Lazarenko's sole concern is [00:30:31] Speaker 01: We don't think that the trustees are managing the funds correctly, but we don't want to take them. [00:30:35] Speaker 01: We just want them to pursue a different strategy. [00:30:37] Speaker 01: I don't want to prejudge our opinion on that, because I think if an aggressive strategy might well affect the value of the funds. [00:30:45] Speaker 01: But he could certainly ask the district court to consider the possibility that they could bring some type of declaratory judgment action or specific action as to the investment of the funds that would not alter the value or availability of the funds or raise the same risk of dissipation. [00:31:02] Speaker 01: So, that's just not particularly. [00:31:05] Speaker 01: If you look at a paragraph, I'm sorry, Judge, are you done with that? [00:31:12] Speaker 01: I was just going to say, look at 1309 as a paragraph that says specifically. [00:31:16] Speaker 01: what the modification Lazzarenco was asking for that's on appeal here. [00:31:19] Speaker 01: And he asked to be able to go to Guernsey to attempt to lift the restraint on the Balfour Trust assets. [00:31:26] Speaker 01: And that's not what he argued. [00:31:28] Speaker 06: I'm sorry, what's the citation for that? [00:31:30] Speaker 01: Docket 1309, which is the motion to modify the restraining. [00:31:34] Speaker 06: Thank you. [00:31:35] Speaker 02: What do you do with the fact that [00:31:39] Speaker 02: the, the Guernsey court on the front end of the case, it's not enforcement. [00:31:46] Speaker 02: This is when they enter the freezing order. [00:31:52] Speaker 02: They say very explicitly that any person affected by this order can apply for a discharge. [00:32:00] Speaker 02: Isn't it a pretty aggressive intrusion on [00:32:07] Speaker 02: Guernsey sovereignty for district court in the United States. [00:32:13] Speaker 02: I mean this this property is in Guernsey. [00:32:16] Speaker 02: The district court's orders here aren't worth the paper they're printed on unless the United States gets help from Guernsey. [00:32:28] Speaker 02: They go to Guernsey for the freezing order. [00:32:30] Speaker 02: The Guernsey court says yes we'll freeze the order but [00:32:34] Speaker 02: people who don't like that can come back and seek modification. [00:32:37] Speaker 02: Isn't it an extraordinary intrusion on Guernsey sovereignty for a court in the United States given all of that to say, no, no, you cannot go back and seek to have that order modified. [00:32:55] Speaker 01: So I don't think so you're on it for 3 reasons and I don't think it presents the type of comedy concerns that I understand you to be referencing and I just say that the district court expressly address this in the 2015 order where this was raised to judge Friedman specifically the fact that currency had. [00:33:11] Speaker 01: presented this pro forma order to Lazarenko. [00:33:14] Speaker 01: And the court said, look, the proceedings in Guernsey are just freezing the assets in service of the US action. [00:33:20] Speaker 01: And it's not an attempt for Guernsey to exercise its own sovereign authority over these funds. [00:33:26] Speaker 01: And so the fact that Lazarenko's been offered the opportunity to come contest it doesn't raise a comedy concern or affect my, the district court's ability [00:33:35] Speaker 01: to my authority over Lazarenko. [00:33:37] Speaker 01: And I'd also emphasize that the... Sorry, go ahead. [00:33:42] Speaker 02: No, but the Guernsey Court has decided to cooperate with US enforcement, but subject to this condition. [00:33:54] Speaker 02: You know, it might be hugely important as a matter of Guernsey due process that whatever someone subject to a freezing order has a day in court or an appeal. [00:34:06] Speaker 01: Well, the second point I'd make, Your Honor, is if you look specifically at the Guernsey order, I don't have the site in front of me, but it's in the appendix. [00:34:13] Speaker 01: The order itself only reports to restrict Credit Suisse and Bank Julius Bayer, the two banks and custodians. [00:34:21] Speaker 01: It doesn't actually restrict in any way Lazarenko. [00:34:23] Speaker 01: Now, we assume that the court sent him the order to say he's, quote, affected by the restraint because he's the individual for whom the underlying conduct is alleged to have been criminal. [00:34:34] Speaker 01: But I additionally don't think [00:34:35] Speaker 01: you know, beyond the comity point I just made, that there's actually kind of prejudice to Lazarenko to the extent the order itself is not imposed against him. [00:34:44] Speaker 02: Yeah, and there's a lot of question about the rights of the settler vis-a-vis the trust, the rights of the beneficiaries vis-a-vis the trust, I get all that, but... And all of that [00:35:03] Speaker 02: I mean, this seems to prevent, you know, there is some person, there is some person who has the right kind of interest in the trust, whose actions are restrained, who according to the Guernsey order in 2004, has rights under Guernsey law to come back and challenge that restraining order, but can't do it. [00:35:33] Speaker 02: by the district court. [00:35:35] Speaker 01: All I would say is I think the trustees as the current custodians may have that right, but the order specifically allows them to continue to invest the funds and otherwise manage the funds so that they are properly controlled. [00:35:48] Speaker 01: And to my knowledge, the trustees have not come to Guernsey and sought to raise an issue with the restraining order. [00:35:56] Speaker 06: And is there any reason to believe that any Guernsey interest [00:36:02] Speaker 06: in getting this resolved in some way couldn't take place on the back end once the United States in this context is done. [00:36:14] Speaker 01: No, Your Honor. [00:36:15] Speaker 01: I think to the extent the arguments are about whether Guernsey law will recognize the forfeiture judgment here, which is I think the essence of Lazarenko's claims, that question will be resolved at the enforcement stage. [00:36:26] Speaker 01: But again, without a judgment from the US court, there's a risk that the [00:36:30] Speaker 01: assets can be dissipated or a judgment can be reached here. [00:36:33] Speaker 01: And that is a concern, but I don't think it prejudices the ability for Guernsey when it is asked to enforce the judgment, to make it a termination under its own sovereign law, whether it recognizes this type of action on these facts and enforcement. [00:36:46] Speaker 03: But again, what do you do with what he says in his reply brief? [00:36:52] Speaker 03: He says, even if he prevails under [00:36:56] Speaker 03: In other words, even if he's allowed to proceed under Guernsey law. [00:37:02] Speaker 03: And I'm quoting he will still be bound by the restraining order until and unless modified by the district. [00:37:09] Speaker 01: That's what he says in his reply. [00:37:13] Speaker 01: Issues with that, I'm not sure the basis for that assumption, because if the district court's order is lifted, I'm not sure what legal basis the district court would have to restrain him. [00:37:22] Speaker 01: And in particular, if this court were to accept this goes to judge Jackson's argument about the authority to the extent this court accepts his argument that third parties can never be that he is a third party, which we dispute. [00:37:32] Speaker 01: but if third parties can never be restrained by 983J because Rule 65, or if where there's foreign assets, notwithstanding 28 USC 1355, which clearly gives jurisdiction over assets held abroad, if a restraint nevertheless functions as an anti-suit injunction. [00:37:49] Speaker 01: Accepting either of those two arguments, I think would mean the district court has no authority [00:37:53] Speaker 01: to restrain Lazarenko here. [00:37:55] Speaker 01: So I don't understand the splicing that he tries to do in his reply brief about, oh, you can lift it as to allowing me to go litigate in currency, but I'll still some, in some other capacity, be bound by the district court's restraining order. [00:38:08] Speaker 01: So unless the court has any other questions, I'm happy to see the answer. [00:38:15] Speaker 01: All right. [00:38:16] Speaker 03: Thank you. [00:38:17] Speaker 01: Thank you, Your Honor. [00:38:18] Speaker 03: Let's see. [00:38:20] Speaker 03: Mr. Stassen, you used up all your time. [00:38:21] Speaker 03: You can have two minutes. [00:38:25] Speaker 04: Thank you for that indulgence. [00:38:28] Speaker 04: Real quickly on waiver, the one thing I forgot to mention was 983J was mentioned in our 2016 clarification motion in the reply brief at page four. [00:38:39] Speaker 04: I think that last little colloquy is really important because Pavel Azzarenko is in the United States. [00:38:47] Speaker 04: He is subject to the restraining order Judge Freeman issued. [00:38:51] Speaker 04: All of the restraints that are in that restraining order apply to him, including he cannot dissipate. [00:38:56] Speaker 04: He cannot move the assets. [00:38:58] Speaker 04: He cannot do anything with those assets. [00:39:00] Speaker 04: Even if we litigate in Guernsey and the Guernsey court says under Guernsey law, let's say 50% of the assets are non-forcible under Guernsey law. [00:39:11] Speaker 04: We can't do anything with that. [00:39:13] Speaker 04: What we have to do is take that Guernsey order and bring it back to Judge Freeman and say, and then work through the issues of what happens. [00:39:21] Speaker 04: It's not, we're not asking for the entire restraint to be lifted. [00:39:25] Speaker 04: And Mr. Noll just implied. [00:39:27] Speaker 04: That's not what we're asking for. [00:39:29] Speaker 04: All we're asking is for, in his order where it says any other action that no party can take, any other action that would diminish the asset. [00:39:39] Speaker 04: that that any other action should not include litigating. [00:39:42] Speaker 06: I don't appreciate the distinction that you're trying to make. [00:39:45] Speaker 06: So you seem to be suggesting that you are okay with the part of Judge Friedman's order that says you can't move the assets, take the assets or anything else. [00:39:59] Speaker 06: What you're not okay with is the part of Judge Friedman's order that says you can't take any other action to essentially affect that same result. [00:40:10] Speaker 06: Because to the extent that take any other action means I'm going to keep you from going to Guernsey and letting them give you permission to move, steal, or take the assets, then we've got basically the same thing. [00:40:25] Speaker 06: It's a distinction without a difference. [00:40:27] Speaker 04: Right. [00:40:28] Speaker 04: Except that we're still subject to the U.S. [00:40:30] Speaker 04: order. [00:40:30] Speaker 04: So we can't move. [00:40:31] Speaker 04: Even if Guernsey says we can move it, we can't because we have Judge Freeman. [00:40:34] Speaker 06: Then why go there? [00:40:35] Speaker 06: This is my very first question. [00:40:37] Speaker 04: Yeah. [00:40:38] Speaker 06: If you're still restrained, then what difference does it make? [00:40:42] Speaker 06: Why are you? [00:40:42] Speaker 06: Why do you care so much about going to Guernsey? [00:40:45] Speaker 04: Judge Freeman may realize, as as as just as I said earlier, [00:40:50] Speaker 04: The judgment he issues is only good. [00:40:53] Speaker 04: It's just a piece of paper until the Guernsey authorities weigh in. [00:40:56] Speaker 04: Judge Freeman may want to know that the Guernsey authorities say 20% isn't foreclosed in the Guernsey law. [00:41:01] Speaker 04: That may affect the trial. [00:41:02] Speaker 06: Who says I don't want to know? [00:41:03] Speaker 06: You asked him that. [00:41:06] Speaker 06: He said I don't want to know. [00:41:07] Speaker 04: Well, we don't know what the ruling of the Guernsey court would be. [00:41:10] Speaker 04: That's the problem. [00:41:10] Speaker 04: We would like to have that. [00:41:12] Speaker 04: We'd like to have that opportunity, and we'd like to give the Guernsey court the opportunity. [00:41:16] Speaker 03: All right, so I'll return to my very first question. [00:41:19] Speaker 03: I understand that. [00:41:21] Speaker 03: And maybe you're right, but why was it an abusive discretion for Judge Friedman to say no? [00:41:26] Speaker 04: We say it's an abusive discretion because the interpretation of the order that any other action includes anti-suit is abusive discretion. [00:41:33] Speaker ?: Okay. [00:41:34] Speaker 04: All right. [00:41:35] Speaker 04: Anything else? [00:41:36] Speaker 04: Thank you very much. [00:41:37] Speaker 00: Thank you. [00:41:37] Speaker 04: The case is submitted.