New York Business Litigation Practice and the Financial Restructuring and
Bankruptcy Practice have scored another major victory, as the United States
District Court for the Eastern District of New York affirmed on appeal a
favorable decision obtained in the Eastern District of New York Bankruptcy
Court. The Thompson Coburn team successfully affirmed on appeal the validity of
a default judgment obtained against Aquila Alpha LLC to avoid and recover a $23
million mortgage secured by a property in Colts Neck, New Jersey.
litigation began in 2018 when the Thompson Coburn team commenced an adversary
proceeding on behalf of the Debtors. After obtaining the default judgment,
Aquila Alpha filed a motion to vacate, claiming that it was never served with
the relevant pleadings in the matter. After multiple rounds of paper
submissions and an evidentiary hearing held virtually before Justice Trust,
which required a cross-examination of the alleged principal of the defendant,
the Thompson Coburn team was successful in recovering the mortgage.
District Court for the Eastern District of New York agreed with the Bankruptcy
Court's ruling against Aquila Alpha, finding that the defendant was properly
served, that its default was willful, and that its other arguments lacked
merit. To date, the Thompson Coburn Team has successfully recovered in
excess of $80 million in cash plus a condo unit located in Manhattan for the
benefit of the litigation trust. The Colts Neck mortgage, once foreclosed upon,
may push total recoveries over the $100 million mark. The decision is currently
on appeal before the Second Circuit Court of Appeals.
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