IN RE: Application of (2023)

ORDER GRANTING TRAVESSIA SECURITIZADORA DE CRÉDITOS FINANCEIROS VIII S.A.’S EX PARTE PETITION FOR JUDICIAL ASSISTANCE IN AID OF FOREIGN PROCEEDINGS PURSUANT TO 28 U.S.C. § 1782

THIS CAUSE comes before the Court upon Applicant Travessia Securitizadora de Créditos Financeiros VIII S.A.’s (“TSCF”) Ex Parte Petition for Judicial Assistance in Aid of Foreign Proceedings Pursuant to 28 U.S.C. § 1782 (“Petition”), [ECF No. 1]. Under 28 U.S.C. § 1782, TSCF requests the issuance of an order permitting TSCF to obtain documentary and testimonial discovery from Vermeil, LLC and Turnberry Village South Tower Condominium Association, Inc. (together, the “Discovery Targets”), for use in pending legal proceedings in Brazil. For the following reasons, the Petition is GRANTED.

BACKGROUND

On November 8, 2010, Itaú Unibanco S.A. (“Itaú”), a Brazilian financial institution, allegedly entered into a type of loan agreement with the Brazilian company Homerplast Indústria e Comércio de Plásticos Ltda. (“Homerplast” or the “Debtor”), wherein Homerplast executed a bank credit note (“cédula de crédito bancário” in Portuguese, equivalent to a US promissory note) in favor of Itaú. Mot, Ex. A Declaration of Cauê Tauan de Souza Yaegashi (“Yaegashi Dec.”) ¶ 3. TSCF claims the bank credit note was personally co-signed and guaranteed by Jaime Schreier (“Mr. Schreier”), his wife Miriam Nigri Schreier (“Ms. Schreier”), and their son Claudio Schreier (“Mr. Claudio Schreier”) (together, the “Schreiers” or the “Guarantors”). Yaegashi Dec. ¶ 4. When the obligation under the bank credit note matured without payment, the entirety of the debt was allegedly accelerated pursuant to the provisions of the loan agreement and Brazilian law. Yaegashi Dec. ¶¶ 5, 20. TSCF claims, as of June 2023, that Debtor and its Guarantors owe approximately BRL 172.460.749,61 Brazilian Reais (approximately $35 million U.S. Dollars). Yaegashi Dec. ¶ 7.

After learning of the Debtor's and the Guarantors’ extensive pattern of incurring significant debt and defaulting on their repayment obligations, Itaú initiated a legal action before the 19th Civil Court of the City of São Paulo in the Federative Republic of Brazil (the “Brazilian Court”) to enforce the debt (the “Foreign Proceeding”). Yaegashi Dec. ¶¶ 6-7, 21-22. The Debtor and its Guarantors are named in the Foreign Proceeding as defendants (collectively, the “Foreign Defendants”). However, Homerplast is currently represented by a Judicial Administrator, who has been in charge of its business affairs since it was declared bankrupt in or around December 2015, a fact TSCF believes indicates little to no chance of recovering from the same. Yaegashi Dec. ¶¶ 10, 23. In or around July 2020, the debt owed by the Debtor to Itaú was assigned to and purchased by Fundo de Investimento em Direitos Creditórios Não-Padronizados Alternative Assets I and subsequently assigned and purchased by TSCF; TSCF was then substituted as plaintiff in the Foreign Proceeding. Yaegashi Dec. ¶¶ 8, 24.

Approximately 13 years after the Foreign Proceeding was initiated, TSCF alleges neither it nor its predecessors have been able to locate and identify Foreign Defendants’ assets sufficient to satisfy the debt obligations. Yaegashi Dec. ¶¶ 14, 25-26.¹ TSCF's investigative efforts have allegedly uncovered that the Schreiers appear to own significant assets in the United States, including a luxurious condo in the Turnberry Village development in Aventura, Florida worth approximately $569,600 (the “Aventura condo”), through a Florida limited liability company by the name of Vermeil, LLC (“Vermeil”), of which Mr. Schreier appears to be the sole member. Yaegashi Dec. ¶¶ 16, 29. TSCF alleges that none of these assets and funds have been disclosed by Debtors to the Brazilian Court, and it is unknown where the funds and other assets are currently being held. Yaegashi Dec. ¶ 35.

In order to fully ascertain the pool of assets belonging to the Foreign Defendants and to inform the Brazilian Court, TSCF seeks assistance from this Court to obtain documentary and testimonial discovery relating to assets and funds owned by Mr. Schreier, Ms. Schreier, and/or the Schreiers through the Discovery Targets. Yaegashi Dec. ¶¶ 18, 31-35, 42. TSCF intends to use that discovery in the Foreign Proceeding to uncover potential fraudulent transfers directed by Mr. Schreier, Ms. Schreier, and/or the Schreiers, and to inform the Brazilian Court of their assets to have them appraised for future attachment or garnishment. Yaegashi Dec. ¶¶ 13-14, 31-35. TSCF has attached the proposed subpoenas as Exhibit B to the Petition.

LEGAL STANDARDS

“[28 U.S.C. § 1782] is the product of congressional efforts, over the span of nearly 150 years, to provide federal-court assistance in gathering evidence for use in foreign tribunals.” Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 247, 124 S.Ct. 2466, 159 L.Ed.2d 355 (2004). “Congress substantially broadened the scope of assistance federal courts could provide for foreign proceedings” pursuant to section 1782 to include “documentary and other tangible evidence as well as testimony.” Id. at 247–48, 124 S.Ct. 2466. To that end, the Eleventh Circuit has repeatedly recognized the liberal policy in favor of granting petitions for judicial assistance pursuant to section 1782. See, e.g., Glock v. Glock, Inc., 797 F.3d 1002, 1007 (11th Cir. 2015) (“The current embodiment of the [section 1782] law reflects the policy choice to provide efficient means of assistance in our federal courts for litigants involved in international litigation and to prompt foreign courts to follow our generous example and provide similar assistance to our court systems.”) (quotations omitted); In re Application of Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 747 F.3d 1262, 1269 (11th Cir. 2014) (“[T]he history of Section 1782 reveals Congress’ wish to strengthen the power of district courts to respond to requests for international assistance”).

The statute reads, in pertinent part:

The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. By virtue of his appointment, the person appointed has power to administer any necessary oath and take the testimony or statement. The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.

28 U.S.C. § 1782(a). Courts have distilled section 1782’s language into a two-part inquiry: first, whether a district court is authorized to grant relief under the statute; and second, whether the court should grant relief in its broad discretion pursuant to the factors outlined by the Supreme Court in Intel. See Consorcio, 747 F.3d at 1271; Pons v. AMKE Registered Agents, LLC, 835 F. App'x 465, 467–68 (11th Cir. 2020).

ANALYSIS

A district court has authority under section 1782 to grant an application for judicial assistance if four prima facie requirements are met: (1) the person from whom discovery is sought resides or can be found in the district in which the petition is filed; (2) the request seeks evidence, whether the “testimony or statement” of a person or the production of “a document or other thing;” (3) the request is made “by a foreign or international tribunal” or by “any interested person;” and (4) the evidence is “for use in a proceeding in a foreign or international tribunal.” 28 U.S.C. § 1782(a); In re Clerici, 481 F.3d 1324, 1331–32 (11th Cir. 2007).

If the statutory requirements are met, then section 1782 “authorizes, but does not require, a federal district court to provide assistance.” Intel, 542 U.S. at 255, 124 S.Ct. 2466. A district court then must consider the four discretionary factors articulated by the Supreme Court in Intel to decide whether relief is warranted: (1) whether the person from whom discovery is sought is a participant in the foreign proceeding; (2) the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance; (3) whether the section 1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States; and (4) whether the request is otherwise unduly intrusive or burdensome. Intel, 542 U.S. at 264–65, 124 S.Ct. 2466; Clerici, 481 F.3d at 1334; Dep't of Caldas v. Diageo PLC, 925 F.3d 1218, 1221 (11th Cir. 2019).

Here, the Court finds that all four requirements have been met under section 1782. First, the Discovery Targets are found in this District. See Consorcio, 747 F.3d at 1269; Mot., Ex C. Second, the discovery sought is testimonial and documentary. See Consorcio, 747 F.3d at 1269 (section 1782 requirement met where document production and deposition testimony are sought); Mot., Ex. B. Third, the discovery is sought by an “interested person.” See Intel, 542 U.S. at 256, 124 S.Ct. 2466 (holding there is “[n]o doubt litigants are included among, and may be the most common example of, the ‘interested person[s]’ who may invoke [section] 1782.”). Fourth, the discovery is sought for use in a foreign proceeding. Yaegashi Dec. ¶¶ 18, 31-35.

Further, the Court finds that the discretionary factors enumerated in Intel weigh in favor of granting the relief requested herein. First, the Discovery Targets are not parties to the Foreign Proceeding and TSCF does not intend to join the Discovery Targets as parties to the Foreign Proceeding. Yaegashi Dec. ¶ 38. Second, there is no indication that the Brazilian Court would not be receptive to judicial assistance. Matter of Colombo Agroindústria S.A., No. 22-21670, 2022 WL 2167719, at *3 (S.D. Fla. June 16, 2022) (“Brazilian law allows discovery produced from a different action, and there is no indication that Brazilian courts would be unreceptive to evidence obtained from a section 1782 petition.”). Third, there is no indication that the present application attempts to circumvent foreign restrictions. Yaegashi Dec. ¶¶ 40-41. Fourth, having reviewed the proposed subpoenas, Mot., Ex. B, the Court finds that they are not unduly burdensome.

Finally, the Court finds it appropriate to grant this petition ex parte as that is the practice in this District. In re Braga, 272 F.R.D. 621, 625 (S.D. Fla. 2011) (“Rural's first argument, that the § 1782 Application and the order granting it ex parte, constituted an ‘unexpected and unfair surprise,’ is insufficient to support vacateur here ․most § 1782 applications (at least in this district) are filed and decided ex parte.”); In re Ex Parte Petition by AG, No. 21-23671, 2021 WL 5231630 at *1, 2021 U.S. Dist. LEXIS 217214 at *1 (S.D. Fla. Nov. 10, 2021) (order granting ex parte petition for judicial assistance pursuant to § 1782); In re Novoship (UK) Ltd., No. 20-60876, 2020 WL 3286308 at *1, 2020 U.S. Dist. LEXIS 107257 at *1 (S.D. Fla. June 17, 2020) (same).

CONCLUSION

Based on the foregoing, it is ORDERED AND ADJUDGED that TSCF's Petition, [ECF No. 1], is hereby GRANTED as follows:

1. TSCF is hereby authorized to issue and serve subpoenas on the Discovery Targets in a form substantially similar to the subpoenas attached to the Petition.

2. Any discovery taken pursuant to this Order, and any related motion practice, shall be governed by the Federal Rules of Civil Procedure.

3. TSCF is further authorized to serve additional follow-up subpoenas on the Discovery Targets or any person, corporate entity, or financial institution found residing in this District as may be necessary to obtain the testimonial and/or documentary evidence described in the Petition.

4. The Clerk shall CLOSE this case.

DONE AND ORDERED in Miami, Florida, this 18th day of December, 2023.

FOOTNOTES

1.   At most, in 2011, TSCF's predecessors managed to locate a single bank account belonging to Mr. Schreier and Ms. Schreier containing only BRL $2,254.99 (approximately $526 U.S. Dollars). Yaegashi Dec. ¶ 25. TSCF subsequently managed to seize various art paintings created by Ms. Schreier, which were appraised in March 2023 and valued at BRL $30,260.00 (approximately $6,158); the paintings are currently pending judicial auction. Yaegashi Dec. ¶ 26.

RODOLFO A. RUIZ II, UNITED STATES DISTRICT JUDGE