United States Securities and Exchange Commission v. Collector's Coffee Inc.
- Victor Marrero
- 1:19-cv-04355
- U.S. District Court · Southern District of New York
- 3
In SEC v. Collector’s Coffee, Judge Gorenstein ordered defendants to acknowledge an active restraining order and declined to hold a status conference.
Mykalai Kontilai, relief defendant Veronica Kontilai, Collector’s Coffee Inc., and the SEC. The order specifically required Kontilai, Veronica Kontilai, and Collector’s Coffee Inc. to submit sworn statements acknowledging that the temporary restraining order remains in effect.
What happened
In United States Securities and Exchange Commission v. Collector’s Coffee Inc., the SEC asked the court for a status conference about compliance with a temporary restraining order. The court said the order remains in effect because it has no termination date and the condition for ending it has not occurred.
The court ordered Mykalai Kontilai, Veronica Kontilai, and Collector’s Coffee Inc. to file sworn statements by February 3, 2021, confirming that they had read the order and understood that the restraining order remains active. Violations may lead to sanctions.
Judge Gabriel W. Gorenstein ruled that no status conference was necessary. The court did not find Mykalai Kontilai in contempt for filing a separate lawsuit or making a contingent fee arrangement, but said the SEC could seek a specific enforcement order.
The detailed version
- United States Securities and Exchange Commission v. Collector's Coffee Inc. · No. 1:19-cv-04355
- Victor Marrero
- Jan. 27, 2021
Background
The Securities and Exchange Commission (SEC) requested a status conference concerning compliance with a temporary restraining order dated May 14, 2019. Mykalai Kontilai and Collector’s Coffee Inc. submitted responsive letters.
The SEC was concerned that defendants’ attorneys were telling their clients that the temporary restraining order was no longer effective. The court rejected that interpretation. It stated that the order had no termination date, had been extended by agreement beyond the usual 14-day period, and had not reached the condition that could end it. The court also noted that people must obey a court order unless it is stayed, even if they believe it is legally incorrect.
The SEC also argued that a lawsuit against Debevoise & Plimpton in the U.S. District Court for the District of Columbia violated the restraining order. The court stated that it had not found Mykalai Kontilai in contempt for filing that lawsuit or for making a contingent fee arrangement.
Ruling
The court ruled that the temporary restraining order remains in effect and will continue to do so unless a court order states otherwise. It ordered Mykalai Kontilai, relief defendant Veronica Kontilai, and Collector’s Coffee Inc., through an authorized representative, to file sworn statements by February 3, 2021, stating that they had read the order and understood the court’s ruling. The court warned that failure to comply may result in sanctions.
The court determined that a status conference was not necessary. It did not issue an order specifically prohibiting counsel from telling third parties that the asset-freeze order had expired, although it said the SEC could request that relief later. The court also said the SEC could seek a specific motion to enforce the restraining order, but that a general request for assistance did not justify a status conference.
Effect
This order required the identified defendants to acknowledge the continuing force of the temporary restraining order. It did not hold Mykalai Kontilai in contempt and did not decide whether the lawsuit against Debevoise & Plimpton violated the order. The order instead addressed compliance procedures and possible future enforcement.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.