Opinion
Civil Action No. 00-3805 c/w 00-3809, 01-0070, 01-0071, SECTION: "N" (1)
April 30, 2001
HEARING ON MOTION
APPEARANCES: Submitted on briefs
MOTION: MOTION TO EXPEDITE DISCOVERY RESPONSES
GRANTED IN PART AND DENIED IN PART
Before the undersigned is the motion of the intervenors, Kennedy Funding Inc. and Cordell Funding, Inc., as co-agents for the following lenders: Cordell Funding LLP, Ash and Global Enterprises, Coastal Funding, Inc., J.C.W. Funding, Inc., K.S.I. Funding, Inc., Lexis Funding, Inc. and Pillar Funding, L.L.C. (collectively referred to as "Lenders"), to order Winchester Navigation, Ltd. ("Winchester") to respond to a request for production of documents, interrogatories and requests for production of documents.
On April 10, 2001, Winchester filed a motion opposing the confirmation of the April 5, 2001, judicial sale of the M/V Enchanted Capri. Rec. doc. 226. In that motion Winchester described itself as owned by the Ukrainian Government and it moved "to void and set aside the sale" of the vessel. Rec. doc 226. In support of the relief Winchester stated:
Based on the intervention and interest of Winchester and the State of Ukraine it is possible that other workout scenarios will be available through which the creditors' claims will be secured or paid more quickly and/or to a greater extent and based on the fact that it is likely that at any future subsequent sale the vessel will sell for much more than $4 million, setting aside the sale is for the ultimate benefit of all creditors.
Rec. doc. 226.
In opposition to the Lenders' motion Winchester states that it is not subject to discovery, because it is not a party to the litigation and has not intervened, sued, arrested or attached the vessel. It likens itself to an aggrieved bidder or potential buyer of a vessel, who objects to the sale of the vessel. Winchester's memorandum in support of its motion opposing the confirmation of the sale describes itself as the owner of the vessel. It states that it purchased the vessel on July 27, 1995, and since then there has been no lawful sale of the vessel. It contends it entered into a bareboat charter with Silvercone Holdings Ltd. of Cyprus ("Silvercone"), who allegedly chartered the vessel to Norsong Shipping Ltd. ("Norsong"). Rec. doc. 226 at pp. 2-4.
The basis for Winchester's opposition to the confirmation of the sale of the vessel is that it is the actual owner of the vessel. In opposing the sale of the vessel on that basis Winchester is a party to these proceedings. As such Winchester was properly served with Lenders' discovery and is obligated to respond it.
In support of their motion for an order expediting Winchester's response to the discovery, Lenders show that United States Judge Clement has scheduled a hearing with oral argument on Wednesday, May 9, 2001, at 3:30 p.m. on three motions: (1) Winchester's motion to oppose confirmation of the Marshal's sale; (2) Lenders' motion to confirm sale; and (3) Lenders' motion to strike Winchester's motion to oppose confirmation of Marshal's sale. Rec. doc. 240. Lenders contend that immediate discovery from Winchester is required to defend their interest and the propriety of the sale.
Included in the discovery is a request for the admission of the genuineness of 11 documents, including an alleged certified copy of Bill of Sale of the vessel Island Holiday, ex Arkadiya (later named Enchanted Capri), between Winchester and Norsong, which certified copy is alleged to be on file with the Registrar of Bahamian Ships, Commonwealth of the Bahamas, in New York, New York. See attachment to Rec. doc. 243. Winchester contends the issue of its ownership claim is not before the Court on the hearing set for May 9, 2001. It instead argues that the sale should not be confirmed in light of its allegations of collusion by the Lenders relating to the sale of the vessel, fraud by Norsong relating to the alleged transfer of title to Norsong from Winchester, and the alleged inadequacy of price. Winchester states, "If a case is presented on these issues, then the Court can set aside the sale . . . ."
If Winchester is not the owner of the vessel, the predicate to its opposition to the confirmation of the sale is lost. The Lenders are entitled to immediate discovery on this issue. The Lenders are also entitled to immediate discovery on Winchester's "case" in support of its allegations of collusion, fraud and the inadequacy of the price. The Lenders should not have to wait until the hearing on May 9, 2001, to learn Winchester's "case."
Winchester contends that it is impossible to respond to Lenders' discovery in an abbreviated period of time. Lenders respond that Winchester must have made information available to its counsel in order to permit it to proceed. Given the time constraints it is not reasonable to expect Winchester to respond to some of the discovery requests prior to the May 9, 2001, hearing. For example, interrogatory no. 12 demands that Winchester identify "all parties at Silvercone Holdings, Ltd. to whom any representative or employee of Winchester Navigation. Ltd. had any dealings with in regards to those two entities or the vessel between January 1, 1994 and this date."
Winchester also makes specific objection to four of Lenders' requests for the production of documents: numbers 2, 4, 8 and 9. Due to the lack of time the undersigned will not require Winchester to immediately respond to requests for production nos. 2 and 4, so there is no need to address its objections to these requests for production at this time. Request for production no. 8 demands "all documents which show or which you claim show that Winchester Navigation, Ltd., is wholly or partially owned by the Ukrainian Government." Winchester objects because it may be necessary to obtain permission from the Ministry of Transport of the Ukraine to disclose certain information or documentation. Winchester ignores that in its motion and supporting memorandum it alleges that it is owned by the Ukraine. It claims that the sale of the vessel did not comply with 28 U.S.C. § 1605 (b)(2) pertaining to the required notice where the vessel is owned by a foreign sovereign. Rec. doc. 226 at p. 5. Request for production no. 8 relates to this issue and Winchester's objection to it is overruled. Winchester objects to request for production no. 9 demanding all of the documents it intends to produce at the hearing of its motion. Winchester describes this as objectionable per se. Winchester's objection is overruled. In the context of these proceedings request for production no. 9 is nothing more than a requirement that Winchester submit its exhibits prior to the hearing.
By the close of business on Thursday, May 3, 2001, Winchester shall serve responses to Lenders' requests for admissions of genuineness of documents nos. 1-11. By 12:00 noon on Monday, May 7, 2001, Winchester shall serve responses to the following discovery from Lenders:
Requests for production nos. 3, 8, 9 and 10; and
Interrogatory nos. 2, 4, 5, 6 9, 10, 11, and 15.
It is ORDERED that Lenders' motion to expedite Winchester's responses to Lenders' discovery is GRANTED in part and DENIED in part in accord with this minute entry.