There’s been a rescheduling of the Lawsuit filed against STO Super Trading and AFX capital, until a further date in February. This latest adjournment is coming after the first hearing was rescheduled to proceed on November 2019.

The Lawsuit was filed by Gallant Capital Markets Ltd and Avenica Inc on Super Trading Online and AFX capital U.S Corp. The motion for the suspension of proceedings has been signed and the Eastern Bankruptcy Court in New York has decided on the case.

In the adjournment letter filed by Gallant Capital markets LTD and the Trustee of administered estates of Avenica, the parties consented to the following matters:

• A motion to endorse the schedule to shift the adversary proceedings from 3 January to 7 February 2020.
• A motion for a case against the AFX defendants, which seeks fees and sanctions for involving in bad faith and injunctive relief

Nature of the case

Based on the lawsuit Gallant Capital Markets (GCM) filed against AFX from 2015 to 2016, the company deposited about $2.35 million in a GCM account operated and maintained at AFX. However, before two weeks before GCM could begin procedures for its bankruptcy, the account balance was about $2.4 million. Within that period, Gallant demanded several times from AFX for the turnover of its funds. But all the pleas were rejected.

Even so, AFX, without basis and any authorization, withdrew the entire amount. According to Gallant Trust, this violates the rules and regulations on automatic stay. The case outlines some important issues where the Trustee wants to recover GMC’s assets and a total turnover of all its property, which would be enforced by the automatic stay.

AFX to pay a fine of $830,000

Based on the lawsuit Chapter 11 Trustee submitted in September 2019, the trustee wants the court to sanction AFX for what it claims is an injunctive relief and bad faith. It’s also asking AFX to pay an amount of $830,000. The said fine is to settle the Trustee based on the settlement agreement presented and agreed at the Court of approval.

According to the Trustee, the fine is to cover for the fees the estate incurred concerning the settlement and meditation, since AFX engaged in intentional delay and bad faith on the Trustee. The Trustee further said that the accused company has delayed and failed to comply with the condition of settlement.

AFX counsel already filed for a withdrawal

Before this recent adjournment of the proceedings, AFX defence counsel White and Williams (WW) LLP, told the court that it is withdrawing from the case as counsel to AFX. According to the defence counsel, there has been an irreconcilable difference between AFX and its counsel.

The counsel further said that it had asked AFX repeatedly to settle the cost of legal services and expenses it has rendered, but AFX did not pay the amount owed for the case. WW reported that AFX has stopped responding to requests from the council to give further information about the nature and direction of the case. According to the counsel, AFX refused to respond