Case of the Day: In re Petition of Macquarie Bank

The case of the day is In re Petition for Judicial Assistance of Macquarie Bank, Ltd. (D. Nev. 2015). Macquarie, an Australian bank, had lent $11 million to Juno Holdings, B.V., a Netherlands Antilles company, in anticipation of an IPO by Juno’s indirect subsidiary, Liberty Financial Pty Ltd. Juno did not repay the loan, and Macquaries sued in a Netherlands Antilles court and obtained a judgment. Macquarie sought to collect by seeking to attach Juno’s shares in one of its other subsidiaries, Jupiter Holdings, B.V., a Dutch company. The idea was that Juno owned shares in Minerva Financila Group Pty Ltd., which in turn was the ultimate own er of Liberty Financial. For the purpose of collection, Macquarie brought an action in the Netherlands. In aid of discovery in that case, Macquarie sought discovery in the U.S. from Sherman Ching Ma, who it alleged was director of Juno, Jupiter, Liberty, and Minerva.

The magistrate judge initially denied the application, and Macquarie asked the district judge to reconsider. The Intel analysis is not that interesting. There were, though, two interesting points.

First, Macquarie argued that the magistrate judge lacked the power to decide the application and should only have made a repport and recommendation to the judge. The judge held that the magistrate judge did have authority to decide the application, because it was a discovery dispute rather than a dispositive motion. Readers interested in that issue can take a look at my post on that point.

The second interesting point is actually an omission. In light of In re Petition of MT Baltic Soul, there is a pretty good argument that a collection action is not within the scope of § 1782 because it is not adjudicative. I don’t think this argument is right, but I was surprised that the Nevada court simply ignored it.

After applying Intel, the court affirmed the magistrate judge’s decision, finding in particular that his findings of fact were not clearly erroneous.

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