Four Decades for Justice
October 06, 2015
On August 20, 2015, the United States Court of Appeals for the Second Circuit affirmed the denial of a 28 U.S.C. § 1782 petition for discovery in aid of foreign judicial proceedings filed by funds, accounts and/or investment vehicles managed by affiliates of Fortress Investment Group LLC (collectively, the “Fortress funds”) against Cravath client PricewaterhouseCoopers International Limited (“PwCIL”).
The Fortress funds are creditors of Saudi Arabian conglomerates Saad Group and Ahmad Hamad Algosaibi and Brothers Company (“AHAB”), whose bankruptcy has spawned government investigations, worldwide claims of fraud and insolvency proceedings across three continents. The Fortress funds filed the § 1782 petition in the United States District Court for the Southern District of New York to obtain documents and oral testimony for use in pending and future foreign proceedings from PwCIL and other accounting firms or accounting firm network entities with affiliates that audited and/or reviewed Saad Group’s and AHAB’s financial statements in the years preceding their demise. The district court denied the petition on July 9, 2014. The Fortress funds appealed the decision to the Second Circuit on August 7, 2014.
In affirming denial of the petition, the Second Circuit distinguished the case from prior precedent, including the United States Supreme Court decision, Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004). The Second Circuit held that the discovery sought was not “for use” in pending foreign proceedings because the Fortress Funds were not parties to those actions and failed to show any way that they themselves could put the information sought before the foreign tribunals. The Second Circuit further held that the Fortress funds had not shown that future proceedings in the United Kingdom were “within reasonable contemplation” at the time they filed their petition.
The Cravath team included partner Antony L. Ryan (who argued the appeal on behalf of PwCIL), senior attorney Samira Shah and associates Deborah L. Fox and Sean M. Sherman. The case is Certain Funds, Accounts and/or Investment Vehicles Managed by Affiliates of Fortress Investment Group L.L.C. v. KPMG L.L.P., No. 14‑cv‑01801 (S.D.N.Y.), No. 14‑cv‑2838 (2d Cir.).
Celebrating 200 years of partnership. In 2019, we celebrated our bicentennial. Our history mirrors that of our nation. Integral to our story is our culture.
Attorney Advertising. ©2024 Cravath, Swaine & Moore LLP.