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New York Federal Court Rejects Attempt to Vacate Arbitration Award Related to Theft of Corporate Assets

A New York federal court recently confirmed an arbitration award related to the alleged theft of more than $100 million from a Luxembourg company, SLS Capital. SLS’s liquidator in bankruptcy court then initiated a FINRA arbitration against CRT Capital, which had sold its majority interest in SLS to David Elias, who allegedly stole SLS’s assets.

CRT prevailed after a lengthy arbitration and was awarded more than $4 million, which includes costs and fees. CRT sought to confirm the award. SRT opposed that motion and sought to vacate the award. SRT argued that the arbitrators had improperly: (1) excluded expert rebuttal testimony it proffered; (2) applied the Federal Rules of Evidence during the hearing; and (3) awarded fees. The New York district court rejected those arguments and confirmed the award. The court concluded that the arbitration panel had numerous independent grounds for excluding the proffered rebuttal testimony, acted within its discretion to apply the evidentiary rules, and, under a highly circumscribed review, did not manifestly disregard the law of New York with respect to the award of costs and fees.

CRT Capital Grp. LLC v. SLS Capital, S.A., No. 1:18-cv-03986-VSB (S.D.N.Y. Mar. 31, 2019)

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About this Author

Brendan Gooley, Employment Lawyer, Workplace Discrimination, Carlton Fields Law Firm

Brendan Gooley is a litigator who focuses on employment discrimination, education, and insurance matters. He joined the firm after clerking for the United States Court of Appeals for the Second Circuit and the Connecticut Supreme Court.

Brendan defends employers, including municipalities and educational institutions, accused of various types of employment discrimination in all stages of litigation, including pre-suit, before the Connecticut Commission on Human Rights and Opportunities (CHRO), and after actions are filed. He handles complaints alleging violations of Title VII and the...