Situation
Five special purpose vehicles held bonds tied to oil drilling rigs that operated for Pemex off the coast of Mexico. As the underlying business unraveled, the bondholders confronted a familiar cross-border problem. They suspected money had been diverted out of the structures that owned the rigs, but the proof and the funds sat in jurisdictions far from any single court's reach.
At least $27 million appeared to have been moved out of the vehicles through offshore accounts. Establishing where it went, and who had touched it, required discovery that no foreign proceeding could compel on its own.
Approach
Daniel Fridman, working with Anel Viamontes, used 28 U.S.C. Section 1782 to open a discovery channel in the United States in aid of the foreign disputes. The petition sought records that would let the team trace the missing funds through the layers of offshore entities and bank accounts that had absorbed them.
The matter took an unusual turn. The team also sought discovery directly from opposing counsel, the law firm Quinn Emanuel Urquhart & Sullivan, based on allegations that roughly $8 million traceable to the clients' accounts had been received. Pursuing discovery against an adversary's own firm is a rare and aggressive use of the statute, and it drew coverage in Law360 and the legal trade press.
The work spanned Mexico, Singapore, and Norway, and required coordinating the U.S. discovery effort with the realities of each foreign forum.
Result
The Section 1782 effort gave the bondholders a way to follow the money into the United States and to test, through compelled discovery, where their funds had gone. The matter remains active.