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In an August 2011 decision addressing an international statutory question of first impression, U.S. District Court Judge Alvin Hellerstein (Southern District of New York), has found that Pryor Cashman’s client has jurisdiction under the Foreign Sovereign Immunities Act to enforce its judgment against the Savings Deposit Insurance Fund of the Republic of Turkey (“SDIF”) within the United States.

The case, Deep Woods Holdings LLC v. Savings Deposit Insurance Fund of the Republic of Turkey, 07-CV-934 (S.D.N.Y.), involves SDIF’s failure to honor the terms of an option agreement concerning shares in The Park Avenue Bank. Pryor Cashman’s client Deep Woods Holdings, LLC held the right to “call” from SDIF certain shares in the Bank that SDIF had attached and which were being held by the New York City Sheriff. When Deep Woods exercised its call, SDIF refused to deliver the shares, arguing that it was not “able to deliver” the shares because it had not ordered the Sheriff to auction them. In October, 2009 Pryor Cashman won summary judgment when the court rejected SDIF’s argument and found that SDIF was able to deliver the shares when Deep Woods exercised its call option. After three days of trial on the amount of damages, Pryor Cashman obtained a roughly $25 million judgment in March, 2011.

Because SDIF is an agency of the Government of the Republic of Turkey, Deep Woods’ ability to enforce its judgment is governed by the FSIA, which requires a judgment debtor to wait a “reasonable time” and to obtain a court order before it can begin collecting its judgment. When Deep Woods moved for such an order, SDIF argued that no order should be granted because it was not currently “engaged in commercial activity” as, SDIF contended, was required under the FSIA. The court rejected SDIF's argument, instead adopting Pryor Cashman’s interpretation that SDIF’s past commercial activity – negotiating and entering into an option contract with Deep Woods – satisfied the “engaged in commercial activity" requirement. 

Pryor Cashman Litigation Partner James S. O’Brien, Jr. led the team, with assistance from associates Ross Bagley and Benjamin Akley. Banking and Corporate Partner Pinchus D. Raice, Chairman of the firm's Financial Institutions Group, was of counsel. 

To read the case's decision in its entirety, please click here.