3 a.m. law firms may finally be free to opt out of representing sanctioned Russian banks

Three major Am Law law firms representing Russian banks that were sanctioned following Russia’s invasion of Ukraine – White & Case, Debevoise & Plimpton and Latham & Watkins – will be able to walk away from the case provided that substitute counsel files notices of appearance this month.

White & Case and Debevoise & Plimpton have been granted permission to stand down on the condition that substitute counsel files a notice to appear by June 24. Latham & Watkins, which has already missed a deadline for substitute counsel to file a notice to appear, has been given until June 15.

The three companies are representing two separate Russian banks in a lawsuit that revolves around the 2014 downing of Malaysia Airlines Flight 17 in Ukraine. The parents of an American who was among the 298 people killed after the plane was shot down are suing the banks, alleging they helped fund those responsible for the bombing. The defendants denied the allegations.

White & Case and Debevoise & Plimpton, who represent Sberbank, had been trying to get out of the lawsuit for some time. In March, Sberbank filed a motion asking the court to stay the action in the case, explaining that its lawyers at White & Case and Debevoise & Plimpton intended to end their relationship with the bank and were “actively seeking a substitute lawyer to represent Sberbank in this action”. .”

Latham & Watkins, which represents VTB Bank, also tried to convince the court to release her from the case. At the beginning of May, the American magistrate judge Gabriel Gorenstein gave him permission to step down if VTB Bank’s deputy counsel files a notice to appear by June 2. This date passed without any notice of appearance having been filed.

But last week, Latham & Watkins asked the judge to extend the deadline until June 15. Lawyers for Latham & Watkins told the court that VTB Bank reached an agreement in principle with lawyers from New York defense firm Brafman & Associates, but the imposed sanctions caused delays.

“Due to the current Russia-related sanctions regime in the United States, the logistics of finalizing the engagement are taking longer than expected,” Latham & Watkins attorneys wrote. “But VTB expects this process to be concluded shortly.”

The judge agreed to the extension but warned he would not grant future extensions without an affidavit from those involved detailing efforts to hire a new lawyer.

Brafman & Associates attorneys scheduled to appear for VTB Bank are criminal defense attorneys Marc Agnifilo and Zach Intrater. Agnifilo has represented many high-profile clients, including former pharmaceutical executive Martin Shkreli, who was convicted of defrauding investors; disgraced Hollywood producer Harvey Weinstein; and former International Monetary Fund chief Dominique Strauss-Kahn, who was cleared of all charges related to several sex scandals. More recently, he has, with Intrater, represented former Goldman Sachs banker Roger Ng, who was found guilty of fraud in a lawsuit related to the 1MDB scandal.

Since Russia invaded Ukraine and countries started imposing sanctions, it has become clear that it is not easy to abandon a Russian client in an ongoing dispute.

Freshfields Bruckhaus Deringer submitted a request to the US District Court in Washington, DC, in a separate case, asking it to allow another attorney to resume representing VEB Bank, another sanctioned bank tied to the Russian state. She provided the name of an alternate attorney, but that attorney, who is based in Connecticut, has not yet been admitted to Washington and has not submitted a notice to appear.

And in March, a court in the British Virgin Islands refused to allow the offshore law firm Ogier to withdraw from representing VTB Bank. The judge in that case told Ogier that “even outcasts have rights.”

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