Another hearing in the adversary proceedings targeting retail FX broker AFX Capital was held on August 19, 2021. This hearing, however, was held with no appearance by the defendant, as indicated by information provided by the New York Eastern Bankruptcy Court.
FX News Group has learnt that the hearing was held and adjourned until December 9, 2021. This marks yet another delay in the proceedings brought against the broker by Gallant Capital Markets back in April 2018.
The Complaint alleges that in 2015 and 2016, Gallant Capital Markets deposited about $2.35 million into a Gallant account maintained at AFX. About two weeks before Gallant commenced its bankruptcy case, there was a balance of approximately $2.4 million in the Gallant account at AFX. Back then, Gallant requested several times that AFX returned Gallant’s funds. These requests, however, were disregarded.
The complaint further alleges that AFX withdrew the remaining balance, lacking any authorization and without any basis, in violation of the automatic stay.
In these adversary proceedings brought by Gallant’s Chapter 11 Trustee, the Trustee seeks a turnover of Gallant property and recovery of assets of the Gallant estate.
Back in September 2019, the Chapter 11 trustee filed a motion for sanctions, arguing that the AFX defendants have engaged in a manipulative strategy of delay, obfuscation, and fabrication in failing to comply with a stipulation of settlement.
Ever since, however, this motion has been pending.
Ronald J. Friedman, Esq. is the liquidating trustee of Gallant Capital Markets. Back in June, he said that he had disbursed a distribution to Class 2 Claimants and was the process of enforcing three overseas judgments in the United Kingdom, the Cayman Islands and New Zealand. Furthermore, the Trustee said he was monitoring the status of the AFX Adversary Proceeding to determine if any funds would be available for this estate.