Republic Of The Philippines v. Marcos Et Al

888 F.2d 954 (2nd Cir. 1989)

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Nature of the Case

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Facts

A suit, Canadian Land Company of America, N.V. v. Bernstein was ordered dismissed by the judge in the case for the refusal of Adnan Khashoggi and Sami Fadel for disobedience of repeated orders to appear in New York for deposition as managing agents of the corporate plaintiffs. The original suit started when the Philippines sought to recover property allegedly taken by Marcos, its ex-president. In that action, the Philippines obtained a preliminary injunction prohibiting Marcos and the other party involved, the Bernsteins, and four corporations from holding legal title to the property. In the present case, Canadian brought suit on behalf of three of four owner corporations against the Bernsteins for breach of fiduciary duty. A Karl Peterson brought suit on behalf of Canadian on grounds of documents that alleged that Peterson was managing director or attorney in fact. Bernstein disputed this contention and claimed that this was a scheme to cover up that Khashoggi was the real manager and that they were backdating documents in order to present himself, Khashoggi, as the true beneficial owner well before the injunction against Marcos was issued. During deposition, Peterson admitted that most of the actions related to the properties were directed by Khashoggi and that he had little knowledge of how the properties were acquired. The judge found Khashoggi to be the managing agent and ordered both Khashoggi and Fadel to appear for deposition in New York. After several orders and no appearance, the action was dismissed pursuant to Rule 37. Canadian appealed.