AFX reaches settlement with bankruptcy trustee of Gallant Capital Markets
The defendants will pay $830,000 in full and final satisfaction of any and all claims the Trustee and the Debtors’ estates have.
There has been some development in the case brought by the Chapter 11 Trustee of Gallant Capital Markets Ltd. against AFX Capital Markets Ltd., AFX Capital U.S. Corp. and STO Super Trading Online.
Apparently, a settlement has been reached.
Let’s recall that, under the Complaint against AFX, throughout 2015 and 2016, Gallant deposited approximately $2.35 million (for its benefit) into a Gallant account maintained at AFX. Within the two-week period prior to Gallant’s commencement of its bankruptcy case, there was a balance of approximately $2.4 million in the Gallant account at AFX. Around that time, Gallant made multiple demands upon Defendants for the turnover of Gallant’s funds—all of which were disregarded.
Nevertheless, AFX withdrew the remaining balance, without authorization and without basis, on the Filing Date—in violation of the automatic stay. This case involves core issues whereby the Trustee is seeking a turnover of Gallant property and recovery of assets of the Gallant estate, and enforcement of the automatic stay.
According to documents filed with the New York Eastern Bankruptcy Court earlier today, the parties in the case are proposing stipulation to resolve the matter.
The parties propose that on June 11, 2019 at 10:00 a.m., or as soon thereafter as counsel may be heard, a hearing shall be held before the Honorable Elizbeth S. Stong, United States Bankruptcy Judge, Eastern District of New York on the motion of Esther DuVal, solely in her capacity as the Chapter 11 Trustee of the jointly administered estates of the debtors – Avenica Inc. and Gallant Capital Markets Ltd., seeking the entry of an Order, approving the stipulation by and between the Trustee and the defendants. The stipulation is set to resolve the adversary proceeding in the case.
Objections to the relief requested in the Motion, if any, must be filed with the Court no later than June 4, 2019 at 5:00 p.m.
The settlement follows months of negotiations. Under the terms of the settlement, the defendants will pay the sum of $830,000 in full and final satisfaction of any and all claims the Trustee and the Debtors’ estates have or may have. The Settlement Sum is to be paid to the Trustee, on behalf of the Gallant estate. The Trustee believes the settlement sum is fair and reasonable and in the best interest of the estate.