Archive for month: July, 2019

July 10,2019

The family of the former owners of a Cuban bank seized by Fidel Castro’s government nearly six decades ago sued Societe Generale for approximately $792 million (£633 million), saying the French bank owes damages for circumventing U.S. sanctions against Cuba.

In a complaint filed on Wednesday with the U.S. District Court in Miami, 14 grandchildren of Carlos and Pura Nuñez, who once owned Banco Nuñez, want to hold Societe Generale liable under U.S. law for doing business with Cuba’s central bank, which nationalized Banco Nuñez and other lenders in 1960.

A lawyer for the plaintiffs said he believed the case was the first against a bank that allegedly “trafficked” in property expropriated by the Castro regime, since the Trump administration said in April it would begin letting U.S. nationals sue companies for such conduct.

“Victims of the Cuban regime who had their property confiscated now have a vehicle to get justice,” Javier Lopez, the lawyer, said in an interview. “We have multiple financial institutions that we’re looking to target.”

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Societe Generale did not immediately respond to requests for comment after market hours.

The lawsuit was filed eight months after Societe Generale agreed to pay $1.34 billion and enter a deferred prosecution agreement to settle U.S. and New York regulatory charges that it handled billions of dollars of transactions related to Cuba and other countries under U.S. sanctions.

According to the plaintiffs, Societe Generale generated hundreds of millions of dollars of fees by lending money to and processing transactions for Banco Nacional de Cuba from 2000 to 2010.

The plaintiffs said they own a claim to 10.5% of the equity in Banco Nacional de Cuba, roughly the percentage that Banco Nuñez represented when it was seized.

Lawyers for the plaintiffs at Kozyak Tropin & Throckmorton based the $792 million damages estimate on Banco Nuñez’s $7.8 million worth at the time, plus 6% annual interest and triple damages under the Helms-Burton Act, a 1996 federal law.

The right to sue under that law had been suspended for 23 years because of opposition from the international community and concern that U.S. courts could be overrun by lawsuits.

Secretary of State Mike Pompeo announced the lifting of that suspension in April, to boost pressure on Havana to end Cuban support for Venezuela’s socialist president, Nicolas Maduro.

The case is Sucesors de Don Carlos Nuñez y Doña Pura Galvez Inc v Societe Generale SA, U.S. District Court, Southern District of Florida, No. 19-22842.

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July 15, 2019

Javier A. Lopez and Evan Stroman of Kozyak Tropin and Throckmorton in Coral Gables have brought a federal lawsuit against a French investment bank, accused of profiting from a Cuban bank that Fidel Castro’s government expropriated from the plaintiffs in the 1960s.

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July 11, 2019

Remaining factual issues prevent Pruco Life Insurance Co. from sidestepping claims against it in a lawsuit accusing a Miami lawyer of scheming to keep $2 million in life insurance proceeds after his former law partner killed himself, a Florida state judge ruled Thursday.

During a lengthy hearing in Miami, Pruco, a subsidiary of Prudential Insurance Co. of America, argued that it was entitled to summary judgment under Florida’s facility of payment statute, which fully releases an insurer from any claims under a policy if it pays a death benefit in accordance with the policy’s terms prior to receiving written notice of a competing claim.

The parties in the suit do not dispute that defendant Hal J. Webb was still the sole beneficiary of the disputed policy when his former partner Steven L. Cantor died in October 2016, and Pruco counsel Enrique Arana of Carlton Fields said the record unequivocally showed it received no written claim contesting payment to Webb until four months after the check was sent.

But after 2½ hours of arguments, Miami-Dade County Circuit Court Judge Beatrice Butchko concluded that the situation was not so clear, saying she found that Pruco had substantially complied with the law but did receive notice of a potential dispute over who was the proper beneficiary.

The judge pointed in large part to Pruco’s decision to temporarily stop a check from going out as a result of phone conversations in which broker Neal Slafsky, who had sold the policy, informed company representatives that the partnership between Cantor and Webb had ended several months before Cantor’s death and that Webb, who is now a partner at Bilzin Sumberg Baena Price & Axelrod LLP, had not complied with requests to transfer benefit rights to The Cantor Group Law PA.

“That is very clear language of a conflict,” the judge said.

Slafsky, whose calls were transcribed by Pruco, said he was going to send the insurer a fax about the dispute, but never did. Instead, he called again the next day and said the estate was not going to challenge payment of the policy benefits to Webb. Pruco then proceeded to issue the payment, according to testimony and evidence.

“It was not written notice, but it was notice the insurance company received that some other person would have interest in the proceeds,” Judge Butchko said of the Slafsky calls.

“They were on notice that there was going to be a contest. I think that also adds a foreseeability component,” the judge added.

Robert Zarco, who is representing the Cantor Group, Cantor’s estate and his widow, said after the hearing that he thought the court got it right given the many factual issues surrounding their claims for negligence, reformation and wrongful distribution of policy proceeds.

“I think this company, Prudential, really mishandled this,” Zarco said, adding, “We need to get to the bottom of the conversations that existed between Slafsky and Mr. Webb and people within the company, and that is something that we are confident that the discovery is going to reveal.”

During the hearing, Arana also argued that the plaintiffs’ claims that Pruco was possibly given written notice of a dispute are undercut by their claims in a separate lawsuit accusing former counsel of giving bad advice by telling them not to contest payment of policy benefits being made to Webb.

“That’s their fight, not your fight,” Judge Butchko responded.

Counsel for Pruco said they could not comment after the hearing.

Judge Butchko also granted summary judgment to Bilzin Sumberg on the plaintiffs’ claim seeking rescission of an asset purchase agreement, in which Bilzin Sumberg paid the Cantor Group 10% of legal fees it collected from servicing former Cantor Group clients over a two-year term.

The judge agreed with Bilzin Sumberg’s argument that Florida law precludes the plaintiffs from bringing the claim because they accepted all of the approximately $117,000 the firm paid under the contract, including after suing Bilzin Sumberg for rescission, and did not first return those funds.

“It’s like, ‘If I win, I give it back to you, if I lose, then I’ve got the money anyway.’” Bilzin Sumberg’s counsel Javier A. Lopez of Kozyak Tropin & Throckmorton LLP said after the hearing. “Heads I win, tails you lose. That’s not how the law works.”

The ruling likely does not mean Bilzin Sumberg is clear of the lawsuit, however, as the plaintiffs are seeking to bring several additional claims against the firm in an amended complaint. But Lopez said he is confident they will fend those off as well.

“We look forward, if the court grants the motion to defend, to vigorously defend the allegations of Bilzin being involved in any type of conspiracy [with Webb]. It’s just based in fiction, complete fiction,” he said.

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July 10,2019
By Michael Watanabe

Heirs of a bank that was seized by Fidel Castro’s government in 1960 — and then used as Cuba’s national bank — claimed in Florida federal court Wednesday that Société Générale SA ignored U.S. embargoes, profiting by doing business with the bank, and should pay back $792 million in damages.

Don Carlos Nuñez y Doña Pura Galves Inc. — which is made up of the inheritors of Banco Nuñez, whose founders fled Cuba in the 1960s after Castro’s takeover — claims that SocGen violated the Helms-Burton Act by unlawfully trafficking its seized property when it did business with Banco Nacional de Cuba, the government-owned successor to their ancestors’ bank.

“In or around 2000, SocGen created a system of ‘credit facilities’ to enable BNC to circumvent the United States’ economic embargo of Cuba,” the bank heirs claim. “SocGen’s system involved concealing and processing BNC’s transactions with foreign corporations, and in exchange for this service, SocGen received over $1 billion in profit.”

The heirs’ suit follows a November announcement of settlements with U.S. federal and state authorities in which SocGen agreed to pay $1.34 billion in fines to resolve investigations into its processing of transactions involving Cuba, Iran and other targets of U.S. sanctions.

Founded in 1921, Banco Nuñez was the second largest Cuban-owned bank on the island, with a $7.8 million equity, by the time the Castro regime took over, according to the complaint.

In 1960, the Castro government ousted foreign and national bank owners, nationalizing all the island’s banks, the complaint alleges. All of these banks were absorbed into BNC, the suit claims.

In 1961, Banco Nuñez’s founders fled the country to “escape the extrajudicial killings, unjustified imprisonment, and cruelty that would come to embody Fidel Castro’s reign,” the complaint alleges.

Despite the passage of the Helms-Burton Act — which took effect in 1996 and extended an embargo to stop foreign companies from trading in the confiscated property of U.S. citizens — SocGen did deals with BNC, profiting at least $1.34 billion.

The bank heirs claim that they own a 10.5% stake in the Cuban national bank because that’s how much of BNC was made up of Banco Nuñez’s properties at the time of the consolidation.

SocGen should fork over about $792 million, the heirs’ attorney, Javier Asis Lopez of Kozyak Tropin & Throckmorton PA, told Law360 in an email. This calculation, though not laid out in the complaint, is made up of the $7.8 million equity at the time of the seizure, plus a 6% annual interest, and then tripled by a provision in the Helms-Burton Act, Lopez confirmed.

Counsel for SocGen did not immediately respond to request for comment Wednesday.

The heirs are represented by Javier Asis Lopez, Stephanie M. Gomez and Evan

1. Stroman of Kozyak Tropin & Throckmorton PA.

Counsel for SocGen was not immediately known Wednesday.

The case is Sucesores de Don Carlos Nunez y Dona Pura Galves, Inc. d/b/a Banco Nuñez v. Societe Generale, S.A., d/b/a Societe Generale Americas, case number 1:19-cv-22842, in the U.S. District Court for the Southern District of Florida.

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