City of Almaty, Kazakhstan v. Sater
- John Koeltl
- 1:19-cv-02645
- U.S. District Court · Southern District of New York
- 8
In City of Almaty v. Sater, Judge Koeltl denied lawyers’ motion to withdraw, finding no valid reason and likely trial disruption.
Felix Sater, Bayrock Group Inc., and Global Habitat Solutions, Inc. must continue with Thomas Sima and John Snyder as their counsel for this proceeding. The plaintiffs avoid the potential delay and duplication that the court associated with withdrawal, and the case proceeds toward the scheduled trial.
What happened
In City of Almaty, Kazakhstan v. Felix Sater, the plaintiffs argue that the defendants, including Sater’s two corporations, were responsible for obtaining money ultimately stolen from BTA Bank. Attorneys Thomas Sima and John Snyder had represented the Sater defendants for nearly three years and asked to withdraw.
The attorneys said they could not competently handle the complex trial, that Snyder was winding down his practice, and that Sater had not paid their bills. Sater supported the request. The court found that the attorneys had competently represented the defendants, that their fee arrangement did not justify withdrawal on the eve of trial, and that withdrawal could delay the case and cause substantial harm to the plaintiffs.
Judge John G. Koeltl denied the motion to withdraw. The case was close to trial, with discovery complete and trial scheduled for June 10, 2024; the Clerk was directed to close the motion.
The detailed version
- City of Almaty, Kazakhstan v. Sater · No. 1:19-cv-02645
- John Koeltl
- Apr. 1, 2024
Background
Thomas Sima and John Snyder asked the court for permission to withdraw as counsel for Felix Sater and his corporations, Bayrock Group Inc. and Global Habitat Solutions, Inc. The plaintiffs opposed the request. The attorneys had represented the Sater defendants for nearly three years in a complex civil action concerning money that the plaintiffs say was ultimately stolen from BTA Bank JSC.
Sater filed a voluntary bankruptcy petition on December 11, 2023. On March 8, 2024, the bankruptcy court lifted the automatic stay so this case could continue, but provided that the stay would be reinstated if this court allowed Sater’s counsel to withdraw without replacement counsel. The attorneys filed their withdrawal motion on March 15, 2024.
Reasons for Withdrawal
Under Southern District of New York Local Civil Rule 1.4, an attorney who has appeared in a case may withdraw only with the court’s permission and must show satisfactory reasons. The court considers both the reasons for withdrawal and the effect withdrawal would have on the proceeding’s timing.
The attorneys argued that they could not competently represent the Sater defendants at trial. Sima said he was primarily a corporate lawyer and could not handle a trial of this complexity alone; Snyder said he was winding down his practice to pursue business ventures. The court rejected this argument. It found that the attorneys had competently represented the Sater defendants for almost three years by handling pleadings, counterclaims, mediation, discovery disputes, privilege issues, document production, an offer of judgment, arguments, and pretrial conferences. The court also noted their relevant knowledge and experience and their recent representations that they were preparing for trial.
The attorneys also argued that continuing the representation would cause financial hardship because Sater had not paid their bills and they did not expect to be paid in this case. The court found that argument unpersuasive. The attorneys had agreed to receive a contingency fee from separate arbitration-related litigation involving a company controlled by Sater, and that litigation had ended more than two years earlier. The court concluded that the attorneys could not withdraw on the eve of trial merely because their agreed payment arrangement had not worked out as expected.
The court also found that Sater’s current dissatisfaction with his attorneys was not credible. It said the dissatisfaction arose only after Sater declared bankruptcy and when withdrawal would conveniently lead to reinstatement of the automatic stay.
Effect on the Proceeding
The court found that the case was on the eve of trial. Discovery was complete, a detailed schedule for pretrial submissions had been entered, and trial was scheduled to begin on June 10, 2024. Allowing withdrawal could disrupt and delay the proceeding.
The court further found that reinstating the stay as to the Sater defendants could force the plaintiffs to try the case against the remaining defendants in this court and later try substantially the same case in an adversary proceeding in state court. The court concluded that this would substantially prejudice the plaintiffs and that the withdrawal motion should not be granted at that stage.
Disposition
The court denied the motion to withdraw. It directed the Clerk to close ECF No. 499. The opinion did not decide the underlying allegations concerning the money allegedly stolen from BTA Bank.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.