Commodity Futures Trading Commission v. Alexandre

Background

The court-appointed receiver, David Castleman, oversaw EminiFX, Inc. and certain assets of Eddy Alexandre. EminiFX had licensed space from 34th Street Suites LLC at 31 West 34th Street in New York City and had paid a security deposit. The receiver rejected the license agreement by letters dated June 30, 2022, returned the keys, and requested an accounting and return of the deposit.

34th Street Suites LLC argued that it owned the deposit. The receiver argued that New York law treated the deposit as EminiFX’s money, held in trust by the recipient, and that the court’s consent preliminary injunction required turnover of receivership assets. The receiver also argued that the license agreement was an executory contract—one in which both sides still had significant obligations—and could be rejected because the space was not needed and the agreement was burdensome to the receivership estate.

Court’s ruling

The court denied 34th Street Suites LLC’s request to retain the security deposit. It agreed that the deposit remained EminiFX’s money and that the receiver properly exercised authority under the preliminary injunction to require transfer of receivership property. The court also accepted the receiver’s position that the license agreement was an executory contract that the receiver could reject. The receiver had paid rent for June 2022, and the court noted that the space was not used after June 30.

The court stated that 34th Street Suites LLC could submit a claim through the ordinary claims process to be established with court approval. The order did not itself require immediate turnover through a separate turnover order; instead, it stated that the receiver could file a proposed order requiring 34th Street Suites LLC to turn over the deposit by August 5, 2022.