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United States District Court for the Southern District of New York
March 2, 2022, Decided; March 2, 2022, Filed
20 Misc. 182 (PGG)
PAUL G. GARDEPHE, U.S.D.J.:
This is a proceeding pursuant to 28 U.S.C. § 1782 for discovery in aid of foreign proceedings.
On June 2, 2020, Applicants YS GM MARFIN II LLC, YS GM MF VII LLC, YS GM MF VIII LLC, YS GM MF IX LLC, and YS GM MF X LLC ("Applicants") filed an ex parte application to issue subpoenas directing Four Wood Marine Advisors, Global Marine Transport Capital, LLC, and Four Wood Capital Partners, LLC, to produce documents and provide testimony for use in foreign proceedings. (Dkt. No. 9) On June 3, 2020, Judge Caproni granted that application. (Dkt. No. 14)
On June 4, 2020, subpoenas were issued to Four Wood Marine Advisors, Global Marine Transport Capital, LLC, and Four Wood Capital Advisors, LLC. (Dkt. No. 34-2) Applicants have now moved to compel Four [*2] Wood Marine Advisors, Global Marine Transport Capital, LLC, and Four Wood Capital Partners, LLC ("Respondents") to comply with these subpoenas. (Motion to Compel (Dkt. No. 31))
For the reasons stated below, Applicants' motion will be granted.
I. FOREIGN PROCEEDINGS
Applicants are five special purpose lending vehicles that, beginning in June 2018, issued five loans, totaling $89.2 million, to fifteen Dubai-based companies that are wholly-owned subsidiaries of North Star Maritime Holdings Limited ("North Star"). North Star is owned and controlled by Muhammad Ali Lakhani, Muhammad Hasan Lakhani, and Muhammad Tahir Lakhani (the "Lakhanis"). (Buss Decl. (Dkt. No. 32) ¶ 4; Buss Decl. (Dkt. No. 9-1) ¶¶ 7-9, 12) The loans were used to partially finance the purchase of large cargo ships, which were to be sold for scrap, with proceeds to be used to pay the loans, (Buss Decl. (Dkt, No. 9-1) ¶ 13) The loans were secured by mortgages on the cargo ships, and by guarantees provided by the Lakhanis and North Star. (Buss Decl. (Dkt. No. 32) ¶ 5; Buss Decl. (Dkt. No. 9-1) ¶¶ 21-24, 27)
Applicants entered into an "Investment Management Agreement" with Four Wood Capital Partners, LLC - a U.S.-based [*3] private equity fund manager with offices in New York - and its affiliate company Four Wood Capital Advisors, LLC. (Buss Decl, (Dkt. No. 32) ¶ 6; Buss Decl. (Dkt, No. 9-1) ¶ 11)1 According to Applicants, Four Wood Capital Partners, LLC and Four Wood Capital Advisors, LLC "acted through" Four Wood Marine Advisors2 and Global Marine Transport Capital, LLC in effecting this agreement. (Applicants Reply Br. (Dkt. No. 38) at 13) Under this agreement, the Four Wood entities "act[ed] as the Applicants' agents, responsible for all due diligence, structuring and negotiation of terms conditions and loan covenants, vetting and selection of all service providers, preparation and execution of loan documents, insurances, ongoing mortgage servicing and collateral monitoring servicing activities, and ... directly communicating with the Lakhanis," (Buss Decl. (Dkt. No, 32) ¶ 6; Buss Decl. (Dkt. No. 9-1) ¶ 11)
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2022 U.S. Dist. LEXIS 38030 *
In re Application of: YS GM MARFIN II LLC; YS GM MF VII LLC; YS GM MF VIII LLC; YS GM MF IX LLC; and YS GM MF X LLC, For an Order to Conduct Discovery for Use in Foreign Proceedings.
discovery, subpoenas, proceedings, tribunal, documents, courts, motion to compel, district court, entities, post-judgment, burdensome, requests, unduly, loans, restrictions, circumvent, collateral, quotation, factors, abroad, marks