The J. Merman Trust, et al. v. Alchemy Properties Inc., et al.

Background

The J. Merman Trust and its trustee, Rachel Kalin, moved under Federal Rule of Civil Procedure 37(a) to compel discovery from Alchemy Properties Inc., 378 WEA Owner, LLC, 378 WEA Mezz LLC, 378 WEA JV LLC, and Alchemy 378 WEA LLC. The opinion refers to these defendants collectively as the “Non-Sponsor Defendants.”

The requested discovery was limited to documents sufficient to show the Non-Sponsor Defendants’ corporate structure and capitalization. The plaintiffs specifically identified organizational charts, governing agreements for each company, an annual balance sheet, and a cash-flow statement. They said they sought only a small number of documents. The opinion states that the Non-Sponsor Defendants did not dispute the documents’ relevance to the plaintiffs’ alter-ego claims and did not claim that production would be burdensome.

The Request for a Discovery Stay

The Non-Sponsor Defendants opposed the motion to compel and requested a stay of all discovery against them while the court considered their recently filed motion for judgment on the pleadings. A discovery stay pauses the exchange of information during a case. The court explained that a stay requires good cause and that courts consider the breadth of the discovery, resulting prejudice, and strength of the underlying motion.

The court described the motion for judgment on the pleadings as strong but concluded that the request for a stay came too late. The complaint was filed in July 2025, the Non-Sponsor Defendants were served in August 2025, and they answered in October 2025. The case-management plans did not show that they had earlier raised concerns about discovery. The court also noted that discovery in the case would continue because there were numerous other parties, and that staying discovery for only these defendants would cause prejudice.

Ruling

Judge Lewis J. Liman granted the plaintiffs’ motion to compel. He ordered the defendants to produce responsive documents sufficient to show the Non-Sponsor Defendants’ corporate structure and capitalization, including the organizational charts, governing agreements, annual balance sheet, and cash-flow statement identified in the opinion.

The court denied the Non-Sponsor Defendants’ motion for a stay without prejudice. The opinion states that they may renew a stay request based on changed circumstances, including a broader discovery request directed specifically to the alter-ego claims and unrelated to other claims. The Clerk of Court was directed to close the motion at Dkt. No. 146.