CHICAGO (CN) – With a $53 million award on the line, a federal judge blew an injunction from Indonesia’s high court out of the water, saying that JPMorgan may seek information regarding the assets of three foreign paper companies.
In September 2010, JPMorgan Chase won $53 million in damages against one Singaporean and two Indonesian paper companies that defaulted on loans to buy paper-making machines.
Shortly after the Northern District of Illinois entered the judgment, JPMorgan issued citations to discover all of the defendant companies’ assets and review all financial records in their possession.
Claiming that an injunction entered by an Indonesian court prohibited them from complying with the citations, the defendant paper companies, PT Indah Kiat Pulp and Paper, PT Pabrik Kertas Tjiwi Kimia and Asia Pulp and Paper Co., moved for a stay.
Issued in connection to a separate lawsuit against two of the defendants by another Indonesian company, the injunction bars the defendants from providing financial information to any other party “so as to avoid any transfer of the assets to a third party.”
An appeal of the injunction, entered by the District Court of Siak Sri Indrapura in June 2008, is being considered before the High Court of Pekanbaru, but no decision has been rendered.
Back in Chicago, U.S. Magistrate Judge Geraldine Brown said the court “need not and should not stay its own proceedings.”
Brown found that the defendants failed to provide “any specific provision or evidence that they would be subject to monetary fines or other sanctions for complying with the citations,” despite their expert’s assertions to the contrary.
“Additionally, despite the fact that their appeal in the Indonesian count has been pending for more than a year, the defendants did not submit any updated information on the status of the appeal,” Brown continued.
The defendants’ expert said “it is not unusual in the Indonesian court system for appeals to last longer than six months, and not unusual for such injunctions to remain in place for more than two years.”
But the plaintiff in the Indonesian case “has had ample opportunity to receive information about defendants’ assets,” the judge concluded, noting that JPMorgan’s judgment is “ten times the verdict of $5.3 million in the Indonesian case.”
“Principles of comity do not dictate that this court should stay enforcement of its judgment,” Brown wrote.
The defendants must comply with JPMorgan’s citations by Nov. 30.