Court proceedings have been stayed against Jan Berkowitz, the CEO of NewLead JMEG, after he filed for bankruptcy on October 12.
Law firm McGuireWoods has applied to the Supreme Court of the County of New York to withdraw as counsel for Berkowitz, who is among defendants in an ongoing breach of contract case being heard in the court.
NewLead JMEG is a US-based coal mining joint venture with Greek carrier NewLead Holdings. The two companies and their respective CEOs Berkowitz and Michael Zolotas are being sued by commodity trading company TransAsia for $6.2m in compensation over a failed agreement to buy 110,000 tonnes of coal from Kentucky’s Five Mile Mine, which was never delivered to the buyer. Splash has covered the case extensively.
In an affirmation filed today, McGuireWoods said it has not been paid since it began working for its client on June 23 this year, aside from the payment of an initial retainer, according to court documents seen by Splash.
Berkowitz’s voluntary petition for bankruptcy shows he owed McGuireWoods some $270,000 in unpaid legal fees as of October 12, but the law firm said today the actual debt is “in excess” of this figure.
The defendant may now apply to show cause as to why the court should not permit McGuireWoods to withdraw as his counsel.
Berkowitz filed for bankruptcy just two days before he was due to be deposed in court in Philadelphia on October 14 and 15, but the deposition never went ahead.
Judicial proceedings against Berkowitz were stayed on October 14, court documents confirm. According to US federal law, an automatic stay in proceedings applies once a bankruptcy application is made.
Proceedings cannot be resumed unless Berkowitz’s petition for bankruptcy is rejected or permission is granted by the Federal Bankruptcy Court, according to US law.