Benthos Master Fund, Ltd. v. Etra

Background

On December 14, 2022, the Court held Respondent Aaron Etra in civil contempt. It ordered that he remain incarcerated until he produced all documents previously ordered and paid Benthos Master Fund, Ltd. $94,070.78. The payment obligation could be reduced if Etra showed that he could not pay or that some items were exempt from Benthos’s restraining notice.

Etra moved on January 24, 2023, for release from custody. He relied on what he described as diligent and ongoing efforts to purge, or end, his contempt through assistance from his agent, Marc Sklar.

Court’s Reasoning

The Court found that the claimed compliance was inadequate. Sklar began producing documents only on the day Etra sought release, more than a month after Etra was incarcerated. The production consisted of American Express credit-card statements from August 2022 through January 2023 and bank statements from a newly disclosed Wells Fargo account for October through December 2022. The Court found that these records fell far short of the order requiring production of all current bank and credit-card statements and other readily obtainable information.

The Court also found that the records showed continued violations of the restraining notice because Etra had not remitted to Benthos funds that came into his possession and were not exempt. The Court noted that Etra had access, directly or through Sklar, to devices, usernames, passwords, email accounts, and other sources of the required records.

The documents also raised concerns about Etra’s prior statements and conduct. They indicated that Etra had opened a Wells Fargo account in October 2022 into which his Social Security payments were deposited, despite his earlier statement that those payments were going into an M&T account that he would produce. The records suggested that there might be another undisclosed Wells Fargo account as well. American Express statements showed that Etra paid $20,860.71 toward his credit-card debt during the relevant period, including after his incarceration, while he had not paid Benthos. The Court ordered him to disclose records for any accounts used to make those payments if those accounts had not already been disclosed.

The Court rejected Etra’s representation that friends were securing funds for a settlement. It stated that it would credit those assertions when Benthos was paid and the check cleared.

Ruling

Judge Valerie Caproni denied Etra’s request for release from confinement without prejudice. The Court explained that civil-contempt incarceration may continue until the person complies or establishes that compliance is no longer possible, and that Etra had not shown adequate compliance.

The Court separately ordered Etra to show cause in his filing due February 10, 2023, why $20,860.71 should not be added to the $94,070.78 already required to purge his contempt. The Court also warned that Benthos’s earlier motion for criminal contempt had been denied without prejudice and could be reconsidered if Etra continued violating the restraining notice.