Eletson Holdings Inc. v. Levona Holdings Ltd.

Background

Levona Holdings Ltd. moved under Federal Rule of Civil Procedure 37(a) for an order compelling intervenors Apargo Limited, Fentalon Limited, and Desimusco Trading Limited to respond to Interrogatories 1(j) and 2 and produce documents responsive to document Requests 4 and 9. The interrogatories sought information about witnesses and professional advisers—including accountants, auditors, lawyers, consultants, and financial advisers—whom the intervenors had retained, consulted, or used during specified periods. Request 4 sought documents and communications concerning ownership or transfer of preferred shares in Eletson Gas, while Request 9 sought documents and communications concerning the value of an interest in Eletson Gas or of those preferred shares.

Court’s reasoning

The court held that the interrogatories sought information relevant to Levona’s claims. Levona alleged that Eletson Holdings did not validly exercise an option to acquire the preferred shares in March 2022, that contrary assertions were fraudulent, and that the intervenors therefore did not obtain the shares. The court concluded that information about whether the intervenors reported obtaining or expecting to obtain the shares to accountants or advisers—or did not consult accountants about the acquisition—could help test those assertions. The court also stated that the party objecting to an interrogatory bears the burden of showing that it is improper and must state objections specifically.

For document production, the court applied Rule 34’s requirement that a party produce responsive documents within its possession, custody, or control. It explained that control includes the legal right or practical ability to obtain documents from another source and does not require physical possession. The court concluded that documents held by third-party advisers, including accountants, can be within a party’s control for discovery purposes.

Ruling

The court granted Levona’s motion to compel. It ordered the intervenors to respond to Interrogatories 1(j) and 2 no later than July 16, 2025, and to complete production of the requested documents no later than July 23, 2025. The opinion’s earlier discussion identifies Requests 4 and 9, but the concluding paragraph orders production responsive to Requests 5 and 9. The court also directed the Clerk of Court to close Docket No. 469.