Last Monday (6), the United States Court approved the tracking of Banco Master’s assets outside Brazil. Judge Scott M. Grossman of the Bankruptcy Court for the Southern District of Florida partially denied a request made by the defense of the institute’s former owner, Daniel Vorcaro, and maintained the authorization for the liquidator to continue gathering information about assets possibly linked to the assets in liquidation.
More than 28 subpoenas were issued to art galleries, luxury stores and other companies that had commercial relations with Vorcaro.
According to the decision, Brazilian legislation allows assets of administrators, controllers and people linked to the institution to remain unavailable during the determination of responsibilities, which is compatible with the regime available in Chapter 15 of North American bankruptcy law, which seeks to protect creditors and avoid hiding or transferring assets to other countries.
Grossman highlighted that the “Rule 2004” of the American Court authorizes broad investigations in insolvency processes, including exploratory ones, to identify assets and possible irregularities. The judge highlighted that this type of investigation can obtain information about financial transactions, assets and commercial relationships linked to debtors.
When analyzing the defense’s arguments, the judge concluded that Vorcaro was unable to sufficiently demonstrate the existence of a concrete violation of privacy.
“Mr. Vorcaro alleges that the analysis would violate protected privacy rights. When pressed at the hearing, however, about what specific privacy rights he was asserting, his attorney identified only general privacy rights under the Florida Constitution – without explaining how these rights would properly be invoked by Mr. Vorcaro and made reference to Brazil’s bank secrecy laws, again without establishing their applicability in this context,” the judge stated.
Limits imposed by the court
Although the investigation continued, the court established specific limits. The court restricted four subpoenas related to a specific dispute over a Florida property registered to Sozo Real Estate. As there is already a separate legal action regarding this property, the judge determined that the production of evidence follows the procedural rules of this specific process, and not Rule 2004.
A subpoena against the Bank of New York Mellon was also annulled because it exceeded the geographic limits provided for by American legislation, which restricts the delivery of documents to a maximum radius of 100 miles (about 160 kilometers).
For the rest, the court maintained the other 24 subpoenas issued by the liquidator were valid, allowing the patrimonial investigations to continue in the United States.
