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At Citibank Wire Transfer Trial Waiver Question As Defendant Docs Says Retain the Funds Here

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 11 –  As Citibank tries to recoup the money it wired out on August 11, 2020, the virtual / Zoom trial began on December 9 before U.S. District Court for the Southern District of New York. Inner City Press is covering it.

 Here for now some of the Day 1 blow by blow.

And Day 2 documents / Defendants exhibits zipped on Patreon here, one on DocumentCloud here, saying "Please retain the funds received 8/11 into Battalion CLO VIII Ltd. on account of the Revlon Term Loan 2016 pending further instruction. Please do not book, and carry the funds as a cash break for the time being."

On Day 3, after discussion of springing maturity, it got to this: whether the defendants had waived privilege by excusing their refusal to return the money as being based on legal advise, including from at least out outside law firm. Judge Furman ended the trial at noon, setting a Monday 7 pm deadline for some filings and musing that closing arguments might be Tuesday afternoon. Here's some of the day:

Witness: "There's nothing that prevents me from playing in the NBA, but it's not going to happen." Judge Furman: Is there a question?  Inner City Press heading to courthouse. Today's Citibank trial only goes until noon.

 Lengthy Zoom sidebar on the issue of whether Brigade witness waived privilege by talking about legal advice that Brigade didn't have to pay the money back.

 Citibank wire transfer trial is suspended until Monday 9 am. More exhibits admitted this morning

On Day 2, Brigade's Jeff Frusciante described his morning of August 12, 2020, working from home in Connecticut. He said he could not remember how he communicated about the Citibank wire transfer; he was asked about Brigade's document retention policy.

Meanwhile Inner City Press' written requests, following instructions, from defendants' exhibits have been stonewalled - not a single such exhibit has been provided, despite follow up. In the docket, there's a reference to skeptism about demands for confidentiality. Skepticism is growing. Here's some of Day 2:

Vinella is on re-direct, after yesterday's cross examination. "Here is says the maturity date, principal due, zero withholding tax." Yeah - zero tax.

Re-direct of Vinella ends with him being asked if he spoke with the lawyers after yesterday's testimony. No, he says. But he did speak with his mother and told her it went well.

Now getting grilled is Jeff Frusciante of Brigade Capital. He was at home in Connecticut on Aug 12, 2020 when he became aware of the August 11 wire transfer from Citibank. Some things he remembers clearly, others not so much.

 Q: Is it true you cannot speak to what Ms. Turk was doing for that 45 minutes, to 12:15 pm?

Frusciante: No. But after that, I have personal knowledge.

Q: Let's look at your deposition, page 96, line 19

 Frusciante of Brigade is still on the "stand." He is being asked about Defendants' Exhibit 1144, a Bank of America document. Meanwhile defendants have yet to provide the Press any exhibits. We're reminded them of skepticism of confidentiality expressed in docket ...

Now up: Matthew Perkal. But there's an objection, from Citibank, pointing to a portion of his declaration. What about the exhibits?

  Following up, before 2 pm Inner City Press requested the exhibits in "Appendix B to Docket Number 189, consistent with the Court's skepticism in claimed needs for confidentiality. Zip file is fine. Please advise." Three and a half hours later, nothing.

Again, on Day 1 some Plaintiff Exhibits were provided. Due to recent problems with Scribd platform, analysis and some exhibits on Patreon, here. That where we can put zip; here's one on DocumentCloud, here. Thread Part 1:

Prior to any witnesses, the discuss is of jurisdiction - not only diversity, but under the Edge Act / international wires.

Many uses of the phrase "belt and suspenders," very SDNY.  "The rules on redacting in the Southern District are pretty clear." [That's not what Michael Avenatti says, withholding everything as opposed by Inner City Press, here]

   Still in preliminaries, discussing which documents will come in and how. Question arises how the media will get access to the documents. Judge Furman does his best, for now; Inner City Press pursues.

 Now first witness is up: Vincent Farrell.  Judge Furman: "Welcome to my virtual courtroom." Indeed....

On the screen, Defendants' exhibit 668, a chat involving Vincent Farrell: "it is not a repayment" (of principal on the Revlon term loan)

 In response to an objection, Judge Furman says "I'll allow it, subject to the caveats I've given. I'm not going to defer to the witness on legal conclusions."

Now he's asking Farrell his own questions.  Farrell is in a black suit, with a black tie.  Next witness: Vincent Fratta.

Judge Furman sustains objections to Para 39 of his declaration / direct testimony, the sentencing beginning "it was important" & "we also wanted."

In Citibank trial, witness is Brendan Zeigan, being asked about the general ledger.

And Part II:

Now "Mister Vinella," sounding like Vanilla, being cross examined about his deposition, which we don't have - yet?

Interesting to compare Vinella wooden floor (cabin?) to the lawyer cross examining him, from office. Zoom trial.

Vinella is sparring back well, it seems   Q: Do you consider this to be a cash break? Objection!

Judge Furman: Sustained. Q: (rephrased to compare to industry standard) Vinella: There's also the payment break. Or a notice break. Three types of break. Q: Any definition you want. Objection, form. Overruled. 

Vinella is being shown a notice Q: Scroll up to page 005. This is an email from Harmodic Fund Services, on August 12 at 2:20 Vinella: The GMT is 4. There's a London or Dublin address.

Q: Not relevant to my question. Have you seen this before? Vinella: No.  Vinella: These notices have a lot of problems. But this isn't questioning if the payment is incorrect.

 Q: "Harmonic had requested... so we can book." Vinella: A cash reconciliation break. Let me get more granular. Harmonic believes the notice is not sufficient 

Q: You were a member of the trade association LSTA? Vinella: Yes.

Q: And LSTA says that the funds should be returned to Citi? Objection - "he has not knowledge." No further questions.

Judge Furman: So we'll stop. Redirect 9 am. Vinella: 6 am for me.

Note: in fairness, the Farrell exhibits were provided. But not the Vinella, at least not yet, while he was bring examined and cross. Analysis and some exhibits on Patreon, here.

The case is In re Citibank August 11, 2020 Wire Transfers, 20-cv-6539 (Furman)


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