The opinion
UNITED STATES DISTRICT COURT 3:07 pm, Jul 2 6, 2023
EASTERN DISTRICT OF NEW YORK
X U.S. DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
LONG ISLAND OFFICE
SUMEC TEXTILE COMPANY LTD.,
MEMORANDUM OF
Appellant, DECISION & ORDER
21-CV-6725 (GRB)
-against-
BRYAN RYNIKER, in his capacity as
Litigation Administrator of the Post-
Confirmation Estates of Décor Holdings,
Inc., et al.,
Appellee.
X
GARY R. BROWN, United States District Judge:
Appearances:
Frederick B. Rosner
The Rosner Law Group
Attorneys for Appellants
824 Market St
Ste. 810
Wilmington, DE 19801
Mark Allen Frankel
Attorneys for Appellants
Backenroth Frankel & Krinsky, LLP
800 Third Avenue
11th Floor
New York, NY 10022
Schuyler Carroll
Loeb & Loeb LLP
Attorneys for Appellee
345 Park Avenue
21st Floor
New York, NY 10154
GARY R. BROWN, United States District Judge:
“There's letters sealed; and my two schoolfellows,
Whom I will trust as I will adders fanged,
They bear the mandate; they must sweep my way
And marshal me to knavery. Let it work,
For 'tis the sport to have the enginer
Hoist with his own petard; and 't shall go hard
But I will delve one yard below their mines
And blow them at the moon. O, 'tis most sweet
When in one line two crafts directly meet.”
- Prince Hamlet, in Hamlet, Act III, Scene 4.
Presently before the Court is appellant SUMEC Textile Company Limited’s motion for
reconsideration of this Court’s order directing the Clerk of the Court to maintain the cash security
posted by SUMEC pending the outcome of the Litigation Administrator’s appeal before the
Second Circuit. For the foregoing reasons, appellant’s motion is DENIED.
BACKGROUND
On December 2, 2021, SUMEC filed its appeal before this Court seeking to overturn the
November 23, 2021, decisions of the Bankruptcy Court denying its motion to reopen adversary
proceedings and to vacate the entry of default against it. See DE 1; DE 1-2; DE 1-3. On
December 6, 2021, appellant filed a motion to stay the execution of the $693,048.84 default
judgment entered against it pending the outcome of this appeal. DE 2. In its stay motion,
appellant specifically represented to the Court that “SUMEC has ample resources to settle this
matter” and that “SUMEC is based in China. Collection on a Default Judgment may prove
difficult in China.” DE 2 at ¶¶ 55-56. And, in relation to the posting of a bond, that “SUMEC
is a major entity with resources necessary to satisfy the Default Judgment. The posting of a bond
is not warranted.” Id. at ¶ 59. SUMEC further represented that its “annual sales alone aggregate
approximately $460 million.” DE 6 at 2.
After opposition from appellee, however, SUMEC proposed to post cash security in the
full amount of the judgment against it plus two years of post-judgment interest, totaling
$694,157.72. DE 9 at 2. Though the parties agreed on the amount of the cash security, they
were unable to agree on the procedure for disbursal of the security should the judgment be
affirmed or vacated. The Litigation Administrator was of the view that the security should be
released to it upon the affirmance of the default judgment, but also that the security be
maintained pending the outcome of the adversary proceeding below if the default judgment is
vacated. DE 10. SUMEC, objecting to the inclusion of this language as unfair and asymmetrical,
provided a proposed order (DE 11-1) without that language. DE 11 at 2.
On January 13, 2022, the Court adopted the order provided by SUMEC, which granted
leave to file a cash security pending a final order on the appeal herein. The order provided that
the cash security would be deposited into the Court’s registry “in consideration of a stay of all
Enforcement Actions pending a Final Order on the Appeal.” DE 11-1 at 2. Of note, ‘Final
Order’ is defined as “an order or judgment of the District Court, or such other United States
court of competent jurisdiction, as to which: (a) no appeal is pending, (b) the time to appeal has
expired and (c) no further appeal has been timely taken.” Id. at 1 n.2.
On January 12, 2023, the Court vacated the entry of default, remanded the case to the
Bankruptcy Court for further proceedings, and directed the Clerk of the Court to release the cash
security to appellant. DE 16. The following day, the Litigation Administrator filed an appeal
of the order vacating the default, DE 18, and a letter asserting that the Litigation Administrator
should have been given time to file a motion to stay of the disbursal of the security before the
Court ordered the funds returned to SUMEC. DE 19. From there, appellee argued that retention
of the cash security was necessary based on a risk that it would be impossible to collect on a
judgment should the Litigation Administrator prevail before the Second Circuit or the
Bankruptcy Court on remand. Id. Appellee highlighted appellant’s repeated assertions in its
attempt to avoid depositing a bond that: (1) SUMEC does not maintain any bank accounts in the
United States, DE 5-16; (2) SUMEC is a Chinese state-owned entity, which, according to
SUMEC, “adds another layer of complexity,” DE 5-18; (3) any judgment in favor of the
Litigation Administrator would have to be domesticated in China, DE 5-16; and (4) SUMEC is
a large company with $460,000,000 in annual sales. DE 5-16.
On January 14, 2023, SUMEC responded asserting that there was no basis for the Court to
withhold the security as there was no longer a judgment against it, no pre-judgment attachment
was sought, and pre-judgment attachment was barred by the Foreign Sovereign Immunities Act,
28 U.S.C. § 1602. DE 20. On January 17, 2023, the Court directed the Clerk of the Court to
retain the security pending resolution of the appeal before the Second Circuit. Jan. 17, 2023
Electronic Order. On January 31, 2023, appellant filed the motion at bar, seeking
reconsideration of the Court’s order directing retention of the security. DE 21-1.
DISCUSSION
Legal Standard
This motion is decided under the well-known and oft-repeated standard for motions for
reconsideration as discussed in Sands Harbor Marina Corp. v. USI Ins. Serv. Nat'l, Inc., 2022
WL 17477852 (E.D.N.Y. Dec. 6, 2022), which discussion is incorporated by reference herein.
As is specifically relevant:
“The provision for reargument is not designed to allow wasteful repetition of arguments
already briefed, considered and decided.” Schonberger v. Serchuk, 742 F.Supp. 108, 119
(S.D.N.Y. 1990). “The major grounds justifying reconsideration are ‘an intervening change
of controlling law, the availability of new evidence, or the need to correct a clear error or
prevent manifest injustice.’” Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d
1245, 1255 (2d Cir. 1992) (quoting 18 C. Wright, et al., Federal Practice & Procedure §
4478 at 790). Thus, a request for reconsideration under Local Rule 6.3 must advance
controlling law or factual matters that the movant believes the Court overlooked in its
decision on the underlying matter and that “might reasonably be expected to alter the
conclusion reached by the Court.” See Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d
Cir. 1995).
Id. at 1. SUMEC has presented neither an intervening change of controlling law nor the
availability of new evidence in support of its motion to reconsider. Thus, to be successful on its
motion, appellee must demonstrate that there is need to correct a clear error or prevent manifest
injustice.
Analysis
SUMEC has failed to proffer any arguments that were not previously raised, considered,
and rejected by the Court. Indeed, SUMEC’s response to the Litigation Administrator’s letter
seeking retention of the cash security argues that appellee did not seek pre-judgment attachment
and that, in any event, SUMEC was immune from pre-judgment attachment by virtue of the
Foreign Sovereign Immunities Act. See Reply Letter, DE 20. These are the same grounds raised
in the motion currently before the Court. Sands Harbor Marina Corp. v. USI Ins. Serv. Nat'l,
Inc., No. 09-CV-3855(GRB)(ARL), 2022 WL 17477852, at *1 (E.D.N.Y. Dec. 6, 2022) (“A
court must narrowly construe and strictly apply Rule 6.3 so as to avoid duplicative rulings on
previously considered issues and to prevent Rule 6.3 from being used either to advance different
theories not previously argued or as a substitute for appealing a final judgment.”) (citing Shamis
v. Ambassador Factors Corp., 187 F.R.D. 148, 151 (S.D.N.Y. 1999)).
Even assuming SUMEC met the exacting standard for a motion for reconsideration, the
motion nonetheless fails. While SUMEC is correct that in most circumstances the Court must
release a supersedeas bond where the underlying judgment has been vacated, this argument
overlooks the text of the Cash Security Order that it provided to the Court. As noted above, the
security would be maintained “pending entry of a Final Order on the Appeal.” DE 11-1 at 1.
And, crucially, a ‘Final Order’ was defined as an order “an order of the District Court, or such
other United States court of competent jurisdiction, as to which: (a) no appeal is pending, (b) the
time to appeal has expired and (c) no further appeal has been timely taken.” Id. at 1 n.2
(emphases added). The Litigation Administrator timely filed an appeal of this Court’s order
vacating the entry of default that is currently pending before the Second Circuit. As such, the
predicate to releasing the cash security—that no further appeal is pending—has not been met.
SUMEC’s claim that injustice will result should the Court retain the security is rendered baseless
for the same reason. SUMEC provided the language in the cash security order. They cannot
now claim that the enforcement of the order against them will work an injustice.
CONCLUSION
Based on the foregoing, appellant’s motion for reconsideration is DENIED.
SO ORDERED.
Dated: Central Islip, New York
July 26, 2023
/s/ Gary R. Brown
GARY R. BROWN
United States District Judge