US lawsuit against AFX Capital set for further protraction

Maria Nikolova

The hearing on the motion for sanctions against AFX has been postponed again.

The adversary proceedings brought by the Chapter 11 Trustee of Avenica, Inc. and Gallant Capital Markets, Ltd. against AFX Capital Markets LTD., AFX Capital U.S. Corp., and STO Super Trading Online are delayed again, as indicated by the latest filings with the New York Eastern Bankruptcy Court seen by FinanceFeeds.

The hearing on the motion for sanctions against AFX has been rescheduled for April 14, 2020. This marks yet another adjournment in the lawsuit brought by Esther DuVal, the Chapter 11 Trustee of the jointly administered estates of Avenica and Gallant Capital Markets, Ltd. There is no information about the reasons for the delay.

Let’s recall that, according to the Complaint against AFX, throughout 2015 and 2016, Gallant Capital Markets 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.

Documents submitted in September 2019 show the Chapter 11 Trustee is seeking sanctions and fees against AFX for engaging in bad faith and injunctive relief. The Trustee seeks the entry of an Order against the AFX defendants for (inter alia):

  • judgment against the AFX Defendants in the amount of $830,000, which is the amount that the AFX Defendants agreed to pay the Trustee in a settlement agreement executed and presented to the Court for approval;
  • awarding all legal fees and costs incurred by the estate with respect to the mediation, settlement and default under the Stipulation since the AFX Defendants, with the assistance of counsel, have engaged in bad faith and intentional delay and fraud on the Court and the Trustee;
  • directing the AFX Defendants to pay all mediation fees and costs to Honorable Allan Gropper.

According to Esther Duval, the AFX defendants have engaged in a manipulative strategy of delay, obfuscation, and indeed, fabrication in failing to comply with the stipulation of settlement.

Read this next

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

<