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quinn emanuel trial lawyers | new york
51 Madison Avenue, 22nd Floor, New York, New York 10010-1601 | TEL (212) 849-7000 FAX (212) 849-7100
WRITER'S DIRECT DIAL NO.
(212) 849-7156
WRITER'S EMAIL ADDRESS
jonoblak@quinnemanuel.com
March 7, 2023
BY NYSCEF
Hon. Margaret Chan, J.S.C.
Supreme Court of the State of New York,
County of New York
60 Centre Street
New York, New York 10007
Alberto Joseph Safra v. SNBNY Holdings Limited, et al.
Index No. 650710/2023
Dear Justice Chan:
We write on behalf of plaintiff Alberto Joseph Safra (“Alberto”) in the above-referenced
matter in response to defendants’ letter to the Court dated March 5, 2023 (NYSCEF Doc. 39).
Defendants’ letter improperly asks the Court to defer Alberto’s application for a preliminary
injunction. There is no basis to do so. While defendants’ proffered arguments are without merit,
they are appropriately brought in opposition to the application, not as a basis to delay it being
heard.
As an initial matter, Alberto’s application is properly brought by order to show cause.
The Rules of the Commercial Division encourage precisely the motion that Alberto made here.
“[P]arties are encouraged to demonstrate on a motion to the court when a pre-trial evidentiary
hearing or immediate trial may be effective in resolving a factual issue sufficient to effect the
disposition of a material part of the case.” See Rules of the Commercial Division of the Supreme
Court, (22 NYCRR 202.70 [g]) rule 9-a. The Rules specify preliminary injunctions as an
example of the type of motions contemplated by Rule 9-a. Id. Moreover, the proper vehicle for
a preliminary injunction motion is by order to show cause, under both the Commercial Division
and the Court’s individual rules. See Rules of the Commercial Division of the Supreme Court,
(22 NYCRR 202.70 [g]) rule 19 (“[m]otions shall be brought on by order to show cause only
where there is genuine urgency (e.g., applications for provisional relief”) (emphasis added); Part
49 — Practices and Procedures, Rule V.A. Nor should that be controversial; Alberto’s
“application for provisional relief” serves the purposes of “resolving a factual issue sufficient to
effect the disposition of a material part of the case,” at an early stage and is thus more than
sufficiently “urgent” to warrant application by order to show cause.
Thus, as a procedural matter alone, the Court should issue the order to show cause.
Defendants’ arguments to the contrary go to the merits of the application, not the appropriateness
of moving by order to show cause. In any event, defendants’ request should be rejected because:
Alberto has met the requirements for seeking a preliminary injunction; the parties’ stipulation
reserves the right to seek such relief; and arguments about personal jurisdiction can be brought in
opposition to the motion.
Alberto has met the requirements for seeking a preliminary injunction. Defendants’
contention that the application is not urgent is without merit, as Alberto faces continuous
irreparable harm without the Court’s intervention. Defendants’ conduct continues to deny
Alberto his governance rights and access to information at SNBNY Holdings Limited
(“SNBNY”). As set forth in Alberto’s motion papers, the only factual issue to be resolved in
deciding Alberto’s right to a board seat is defendants’ assertion that the Federal Reserve is
preventing SNBNY from recognizing Alberto’s appointed director, while the Federal Reserve
has denied taking such a position. Memorandum of Law in Support of Plaintiffs' Application for
a Preliminary Injunction. (NYSCEF Doc. 38) at 18-19. Because the requested relief depends on
the resolution of such a narrow factual issue, it is well suited to resolution via a pre-trial motion
2
for a preliminary injunction. Id. And New York routinely recognizes that the deprivation of
governance and oversight rights, the rights Alberto seeks to protect here, constitute irreparable
injury. See e.g., Ciment v. Spantran, Inc., 2017 WL 87177, at *4 (Sup Ct, NY County Jan. 06,
2017). As such, urgent, preliminary relief is warranted.
Ignoring the irreparable injury faced by Alberto, defendants contend that his request for a
preliminary injunction is not urgent by misstating the events leading up to his filing, while
omitting other details that underscore Alberto’s urgent need for relief. While these arguments
are best left for defendants’ opposition papers, Alberto has in fact been diligent in pursuing his
rights. Alberto has not waited 21 months to seek the relief sought here, as the relief was
previously included in a request for arbitration with the London Court of International
Arbitrators submitted on May 10, 2022. Memorandum of Law in Support of Plaintiffs'
Application for a Preliminary Injunction. (NYSCEF Doc. 38) at 7. After SNBNY objected to
jurisdiction in the arbitration, the parties agreed that claims regarding SNBNY would be
withdrawn from that proceeding in September 2022. Id. at 8. Alberto filed this Action on
February 6, 2023. Id. Following that filing, on February 22, 2023, Alberto’s representative
confirmed that the Federal Reserve continued to pose no objection to the appointment of his
director. Kim Affirm. (NYSCEF Doc. 36) at 2. He then filed the preliminary injunction
application on March 3, 2023. Memorandum of Law in Support of Plaintiffs’ Application for a
Preliminary Injunction. (NYSCEF Doc. 38). Any purported delay in that chronology would be
insufficient on its own to deny injunctive relief,1 and certainly is not enough to defer hearing the
application.
1
See e.g., Dunbar v Best, 2007 WL 2736288, at *5 (Sup Ct, Sep. 10, 2007) (“But mere
delay, however long, without the necessary elements to create an equitable estoppel, does not
preclude the granting of equitable relief”).
3
Moreover, as set forth in Alberto’s application, the need for such relief has become all the
more urgent as a result of SNBNY’s suspicious accounting maneuvers, which include significant
unexplained increases and decreases in SNBNY’s income, which are not supported by the
changes in the performance of SNBNY’s main asset. Memorandum of Law in Support of
Plaintiffs’ Application for a Preliminary Injunction. (NYSCEF Doc. 38) at 2. All the while,
SNBNY’s financial statements have contained numerous inconsistencies and glaring disclosure
omissions, and have been filed only after inappropriate delays or are now long overdue, creating the
urgent need for relief. Id.
Recent events involving corporate governance failures at Banco Safra S.A. (“Banco
Safra”), a bank that is controlled by defendants Vicky Safra, Jacob Joseph Safra, and David
Joseph Safra, have also emphasized Alberto’s urgent need for relief. Id. at 8. According to
filings in Brazil, Banco Safra failed to provide information to Alberto’s appointed directors on
Banco Safra’s board about a significant expansion and concentration of its credit portfolio that is
inconsistent with the bank’s own capital plan. Id. After having been denied access to the
relevant records, Alberto’s appointed directors recently learned through press reports that Banco
Safra had a significant exposure to Americanas S.A. (“Americanas”), a large Brazilian shopping
chain that filed for reorganization in January 2023. Id. This exposure and others of similar
fashion might have been detected and avoided had Alberto’s directors been given appropriate
access to the records that they asked for, and which they only partially obtained on February 14,
2023, when a Brazilian Court enforced their information rights. Id. at 8-9. These proceedings in
Brazil illustrate the particular risk Alberto faces while denied his oversight and governance rights
at SNBNY.
The parties’ stipulation does not preclude an application for preliminary relief.
Defendants cannot escape responding to Alberto’s application by virtue of the parties’ stipulation
4
on their time to answer, which was entered into in the face of defendants’ threat of extended
fights and delays over service. The stipulation provides that the parties did not “waive or
prejudice any other rights, claims or defenses they may have....” Stipulation on Service and
Response Date. (NYSCEF Doc. 12) at 2. That, on its own, is dispositive. That Alberto agreed to
extend defendants’ time to answer does not impair his right to pursue the preliminary relief he
now seeks. That right was reserved, just as defendants reserved their rights to assert all defenses
(aside from those relating to service). Notably, after commencing the action on February 6,
2023, Alberto successfully served defendants Carlos Alberto Vieira, and Simoni Passos Morato,
two of the three SNBNY directors, as well as Vicky Safra. Affidavits of Service. (NYSCEF
Doc. 5; NYSCEF Doc. 6; NYSCEF Doc. 7). He also attempted to serve Jacob Joseph Safra at
his New York residence and SNBNY at the New York offices of Safra National Bank of New
York, where SNBNY’s directors maintain offices, only to be turned away by doorman and
building security, respectively. Despite their extensive connections to New York, noted below,
defendants made clear that they intended to drag out the dispute by challenging that some service
was effective, and contending that numerous defendants would need to be served via the Hague
Convention. While Alberto could have fought such battles, and potentially pursued piecemeal
litigation against some defendants in the meantime, in the face of such threatened extensive
delay, he agreed to extend defendants’ time to answer. But he did not agree to waive any other
right, and is free to pursue the preliminary relief sought here.
Arguments about personal jurisdiction are premature here, and in any event can be
brought in opposition to the application. Defendants incorrectly, and prematurely, argue that
the Court lacks personal jurisdiction over “most” of the defendants. But Alberto has adequately
alleged a basis for personal jurisdiction over each of the defendants. Complaint. (NYSCEF Doc.
5
2) ¶¶ 38-45. Most of the key events took place in New York, including, as relevant here, that
defendants have refused to recognize Alberto’s director based on interactions with its New York
based regulator. Id. Defendants also have extensive contacts with New York, including that:
• SNBNY’s principal purpose is investing in the common stock of Safra National Bank,
based in New York, through which it derives almost all of its revenue. Id. ¶ 39.
• As a bank holding company, SNBNY is subject to regulation by the New York-based
Federal Reserve and must file various reports with the Federal Reserve. Id.
• All three of SNBNY’s directors have a business office located in the Safra National Bank
headquarters in New York City, and no SNBNY director lives or maintains a business
address in Gibraltar. Id. ¶ 41.
• Two of the Director Defendants, Simoni Passos Morato and Carlos Alberto Vieira,
maintain residences in New York. Id.
• Two of the Family Defendants, Vicky Safra and Jacob Joseph Safra, maintain residences
in New York. Id. ¶ 43.
• Jacob Joseph Safra serves as the chair of Safra National Bank of New York, a New York
bank. Id.
Defendants’ New York contacts are thus extensive, and more than sufficient to create personal
jurisdiction. Nonetheless, if any defendants wish to argue otherwise, they may do so in
opposition to Alberto’s application for a preliminary injunction. These are facts within
defendants’ control, and hardly difficult to marshal, but in any event the defense cannot be an
adequate basis for requesting that this Court decline to sign Alberto’s proposed order to show
cause. And to the extent that discovery regarding this Court’s personal jurisdiction over
defendants is required, defendants may pursue such discovery on an expedited basis, as
requested in Alberto’s proposed order to show cause.
****
For all the reasons set forth herein, and in plaintiff’s application for a preliminary
injunction, defendants’ request to deny plaintiff’s order to show cause should be denied.
6
Respectfully yours,
/s/ Jonathan B. Oblak
Jonathan B. Oblak
QUINN EMANUEL URQUHART & SULLIVAN, LLP
Michael B. Carlinsky
Jonathan Oblak
Jeremy Baldoni
51 Madison Avenue
22nd Floor
New York, New York 10010
(212) 849-7150
michaelcarlinsky@quinnemanuel.com
jonoblak@quinnemanuel.com
jeremybaldoni@quinnemanuel.com
GANFER SHORE LEEDS &
ZAUDERER LLP
Mark C. Zauderer
Ira B. Matetsky
Grant A. Shehigian
360 Lexington Avenue
New York, New York 10017
(212) 922-9250
mzauderer@ganfershore.com
gshehigian@ganfershore.com
imatetsky@ganfershore.com
Counsel for Plaintiff
cc: All counsel (by NYSCEF)
7
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quinn emanuel trial lawyers | new york 51 Madison Avenue, 22nd Floor, New York, New York 10010-1601 | TEL (212) 849-7000 FAX (212) 849-7100 WRITER'S DIRECT DIAL NO. (212) 849-7156 WRITER'S EMAIL ADDRESS jonoblak@quinnemanuel.com March 7, 2023 BY NYSCEF Hon. Margaret Chan, J.S.C. Supreme Court of the State of New York, County of New York 60 Centre Street New York, New York 10007 Alberto Joseph Safra v. SNBNY Holdings Limited, et al. Index No. 650710/2023 Dear Justice Chan: We write on behalf of plaintiff Alberto Joseph Safra (“Alberto”) in the above-referenced matter in response to defendants’ letter to the Court dated March 5, 2023 (NYSCEF Doc. 39). Defendants’ letter improperly asks the Court to defer Alberto’s application for a preliminary injunction. There is no basis to do so. While defendants’ proffered arguments are without merit, they are appropriately brought in opposition to the application, not as a basis to delay it being heard. As an initial matter, Alberto’s application is properly brought by order to show cause. The Rules of the Commercial Division encourage precisely the motion that Alberto made here. “[P]arties are encouraged to demonstrate on a motion to the court when a pre-trial evidentiary hearing or immediate trial may be effective in resolving a factual issue sufficient to effect the disposition of a material part of the case.” See Rules of the Commercial Division of the Supreme Court, (22 NYCRR 202.70 [g]) rule 9-a. The Rules specify preliminary injunctions as an example of the type of motions contemplated by Rule 9-a. Id. Moreover, the proper vehicle for a preliminary injunction motion is by order to show cause, under both the Commercial Division and the Court’s individual rules. See Rules of the Commercial Division of the Supreme Court, (22 NYCRR 202.70 [g]) rule 19 (“[m]otions shall be brought on by order to show cause only where there is genuine urgency (e.g., applications for provisional relief”) (emphasis added); Part 49 — Practices and Procedures, Rule V.A. Nor should that be controversial; Alberto’s “application for provisional relief” serves the purposes of “resolving a factual issue sufficient to effect the disposition of a material part of the case,” at an early stage and is thus more than sufficiently “urgent” to warrant application by order to show cause. Thus, as a procedural matter alone, the Court should issue the order to show cause. Defendants’ arguments to the contrary go to the merits of the application, not the appropriateness of moving by order to show cause. In any event, defendants’ request should be rejected because: Alberto has met the requirements for seeking a preliminary injunction; the parties’ stipulation reserves the right to seek such relief; and arguments about personal jurisdiction can be brought in opposition to the motion. Alberto has met the requirements for seeking a preliminary injunction. Defendants’ contention that the application is not urgent is without merit, as Alberto faces continuous irreparable harm without the Court’s intervention. Defendants’ conduct continues to deny Alberto his governance rights and access to information at SNBNY Holdings Limited (“SNBNY”). As set forth in Alberto’s motion papers, the only factual issue to be resolved in deciding Alberto’s right to a board seat is defendants’ assertion that the Federal Reserve is preventing SNBNY from recognizing Alberto’s appointed director, while the Federal Reserve has denied taking such a position. Memorandum of Law in Support of Plaintiffs' Application for a Preliminary Injunction. (NYSCEF Doc. 38) at 18-19. Because the requested relief depends on the resolution of such a narrow factual issue, it is well suited to resolution via a pre-trial motion 2 for a preliminary injunction. Id. And New York routinely recognizes that the deprivation of governance and oversight rights, the rights Alberto seeks to protect here, constitute irreparable injury. See e.g., Ciment v. Spantran, Inc., 2017 WL 87177, at *4 (Sup Ct, NY County Jan. 06, 2017). As such, urgent, preliminary relief is warranted. Ignoring the irreparable injury faced by Alberto, defendants contend that his request for a preliminary injunction is not urgent by misstating the events leading up to his filing, while omitting other details that underscore Alberto’s urgent need for relief. While these arguments are best left for defendants’ opposition papers, Alberto has in fact been diligent in pursuing his rights. Alberto has not waited 21 months to seek the relief sought here, as the relief was previously included in a request for arbitration with the London Court of International Arbitrators submitted on May 10, 2022. Memorandum of Law in Support of Plaintiffs' Application for a Preliminary Injunction. (NYSCEF Doc. 38) at 7. After SNBNY objected to jurisdiction in the arbitration, the parties agreed that claims regarding SNBNY would be withdrawn from that proceeding in September 2022. Id. at 8. Alberto filed this Action on February 6, 2023. Id. Following that filing, on February 22, 2023, Alberto’s representative confirmed that the Federal Reserve continued to pose no objection to the appointment of his director. Kim Affirm. (NYSCEF Doc. 36) at 2. He then filed the preliminary injunction application on March 3, 2023. Memorandum of Law in Support of Plaintiffs’ Application for a Preliminary Injunction. (NYSCEF Doc. 38). Any purported delay in that chronology would be insufficient on its own to deny injunctive relief,1 and certainly is not enough to defer hearing the application. 1 See e.g., Dunbar v Best, 2007 WL 2736288, at *5 (Sup Ct, Sep. 10, 2007) (“But mere delay, however long, without the necessary elements to create an equitable estoppel, does not preclude the granting of equitable relief”). 3 Moreover, as set forth in Alberto’s application, the need for such relief has become all the more urgent as a result of SNBNY’s suspicious accounting maneuvers, which include significant unexplained increases and decreases in SNBNY’s income, which are not supported by the changes in the performance of SNBNY’s main asset. Memorandum of Law in Support of Plaintiffs’ Application for a Preliminary Injunction. (NYSCEF Doc. 38) at 2. All the while, SNBNY’s financial statements have contained numerous inconsistencies and glaring disclosure omissions, and have been filed only after inappropriate delays or are now long overdue, creating the urgent need for relief. Id. Recent events involving corporate governance failures at Banco Safra S.A. (“Banco Safra”), a bank that is controlled by defendants Vicky Safra, Jacob Joseph Safra, and David Joseph Safra, have also emphasized Alberto’s urgent need for relief. Id. at 8. According to filings in Brazil, Banco Safra failed to provide information to Alberto’s appointed directors on Banco Safra’s board about a significant expansion and concentration of its credit portfolio that is inconsistent with the bank’s own capital plan. Id. After having been denied access to the relevant records, Alberto’s appointed directors recently learned through press reports that Banco Safra had a significant exposure to Americanas S.A. (“Americanas”), a large Brazilian shopping chain that filed for reorganization in January 2023. Id. This exposure and others of similar fashion might have been detected and avoided had Alberto’s directors been given appropriate access to the records that they asked for, and which they only partially obtained on February 14, 2023, when a Brazilian Court enforced their information rights. Id. at 8-9. These proceedings in Brazil illustrate the particular risk Alberto faces while denied his oversight and governance rights at SNBNY. The parties’ stipulation does not preclude an application for preliminary relief. Defendants cannot escape responding to Alberto’s application by virtue of the parties’ stipulation 4 on their time to answer, which was entered into in the face of defendants’ threat of extended fights and delays over service. The stipulation provides that the parties did not “waive or prejudice any other rights, claims or defenses they may have....” Stipulation on Service and Response Date. (NYSCEF Doc. 12) at 2. That, on its own, is dispositive. That Alberto agreed to extend defendants’ time to answer does not impair his right to pursue the preliminary relief he now seeks. That right was reserved, just as defendants reserved their rights to assert all defenses (aside from those relating to service). Notably, after commencing the action on February 6, 2023, Alberto successfully served defendants Carlos Alberto Vieira, and Simoni Passos Morato, two of the three SNBNY directors, as well as Vicky Safra. Affidavits of Service. (NYSCEF Doc. 5; NYSCEF Doc. 6; NYSCEF Doc. 7). He also attempted to serve Jacob Joseph Safra at his New York residence and SNBNY at the New York offices of Safra National Bank of New York, where SNBNY’s directors maintain offices, only to be turned away by doorman and building security, respectively. Despite their extensive connections to New York, noted below, defendants made clear that they intended to drag out the dispute by challenging that some service was effective, and contending that numerous defendants would need to be served via the Hague Convention. While Alberto could have fought such battles, and potentially pursued piecemeal litigation against some defendants in the meantime, in the face of such threatened extensive delay, he agreed to extend defendants’ time to answer. But he did not agree to waive any other right, and is free to pursue the preliminary relief sought here. Arguments about personal jurisdiction are premature here, and in any event can be brought in opposition to the application. Defendants incorrectly, and prematurely, argue that the Court lacks personal jurisdiction over “most” of the defendants. But Alberto has adequately alleged a basis for personal jurisdiction over each of the defendants. Complaint. (NYSCEF Doc. 5 2) ¶¶ 38-45. Most of the key events took place in New York, including, as relevant here, that defendants have refused to recognize Alberto’s director based on interactions with its New York based regulator. Id. Defendants also have extensive contacts with New York, including that: • SNBNY’s principal purpose is investing in the common stock of Safra National Bank, based in New York, through which it derives almost all of its revenue. Id. ¶ 39. • As a bank holding company, SNBNY is subject to regulation by the New York-based Federal Reserve and must file various reports with the Federal Reserve. Id. • All three of SNBNY’s directors have a business office located in the Safra National Bank headquarters in New York City, and no SNBNY director lives or maintains a business address in Gibraltar. Id. ¶ 41. • Two of the Director Defendants, Simoni Passos Morato and Carlos Alberto Vieira, maintain residences in New York. Id. • Two of the Family Defendants, Vicky Safra and Jacob Joseph Safra, maintain residences in New York. Id. ¶ 43. • Jacob Joseph Safra serves as the chair of Safra National Bank of New York, a New York bank. Id. Defendants’ New York contacts are thus extensive, and more than sufficient to create personal jurisdiction. Nonetheless, if any defendants wish to argue otherwise, they may do so in opposition to Alberto’s application for a preliminary injunction. These are facts within defendants’ control, and hardly difficult to marshal, but in any event the defense cannot be an adequate basis for requesting that this Court decline to sign Alberto’s proposed order to show cause. And to the extent that discovery regarding this Court’s personal jurisdiction over defendants is required, defendants may pursue such discovery on an expedited basis, as requested in Alberto’s proposed order to show cause. **** For all the reasons set forth herein, and in plaintiff’s application for a preliminary injunction, defendants’ request to deny plaintiff’s order to show cause should be denied. 6 Respectfully yours, /s/ Jonathan B. Oblak Jonathan B. Oblak QUINN EMANUEL URQUHART & SULLIVAN, LLP Michael B. Carlinsky Jonathan Oblak Jeremy Baldoni 51 Madison Avenue 22nd Floor New York, New York 10010 (212) 849-7150 michaelcarlinsky@quinnemanuel.com jonoblak@quinnemanuel.com jeremybaldoni@quinnemanuel.com GANFER SHORE LEEDS & ZAUDERER LLP Mark C. Zauderer Ira B. Matetsky Grant A. Shehigian 360 Lexington Avenue New York, New York 10017 (212) 922-9250 mzauderer@ganfershore.com gshehigian@ganfershore.com imatetsky@ganfershore.com Counsel for Plaintiff cc: All counsel (by NYSCEF) 7