Cherney ordered to pay out $270 mln by New York court
MOSCOW, April 14 (RAPSI) - A US court granted summary judgment Monday against Israeli tycoon Mikhail Cherney in a case arising from a contract dispute with fellow businessman Alexander Gliklad.
According to the judgment, Cherney signed a $270 million promissory note in 2003 that was made out to Gliklad.
While Gliklad claims that the note constituted consideration for Cherney’s purchase of a 26 percent interest in Russia-based coal company KuzbassRazrezUgol, Cherney maintains that the note is invalid.
Cherney has advanced two affirmative defenses to support his challenge of the note’s validity.
“He claims that the note was intended to reflect that Mr. Gliklad owed him $270 million, and that the note mistakenly reflected him as the borrower. He claims that the note was for a loan that he made to Mr. Gliklad in either 1997 or 1998 to finance the construction and development of a new railway system in Russia in conjunction with the Russian Ministry of Transportation,” the judgment said.
Cherney further argued that the loan was made by a company that he controlled to two companies in which Gliklad held an interest, according to the judgment.
Gliklad convinced the court through the production of evidence that though he had borrowed money from Cherney in the past, the loan had been fully repaid prior to the issuance of the promissory note.
Meanwhile, Cherney failed to produce key documents relating to either of the affirmative defenses he raised.
The court ordered Cherney’s deposition, seeking an explanation of the lack of documentation available to support his arguments.
“This court has given Mr. Cherney over four years to produce required documents and has been burdened with repeatedly dealing with his willful, obstructionist behavior. Mr. Cherney has contradicted himself multiple times, and has provided insufficient evidence to establish any of his affirmative defenses,” the judgment said.
The court concluded that Gliklad had sufficiently established his prima facie case, while Cherney’s affirmative defenses were without merit.
Accordingly, Cherney was ordered to pay up $270 million, along with 9% annual interest for approximately the past decade.