VTB Bank lawyers cannot be paid due to Russian sanctions

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New lawyers at Russian state-owned bank VTB said they had trouble finding a bank willing to accept payments from their client.

VTB and attorney Marc Agnifilo told a federal judge in Manhattan on Wednesday that they were still trying to find a bank that would process VTB’s payment to Agnifilo’s office for legal fees. VTB is among a number of public entities sanctioned by US and other authorities in response to the Russian invasion of Ukraine.

Mega-company Latham & Watkins said in April it would stop representing VTB in the case. The bank is pursuing a lawsuit brought by the parents of Quinn Schansman, an American who died in the 2014 downing of Malaysia Airlines Flight 17 over Ukraine.

VTB said this month it had agreed to hire a team of lawyers from Brafman & Associates, including Agnifilo, who has defended Harvey Weinstein and former Goldman Sachs banker Roger Ng in high-profile cases.

The bank on Wednesday asked the court to put the case on hold while new lawyers work out compensation issues in a country largely closed to Western banks.

VTB, Sberbank and others are accused in the lawsuit of funding the Donetsk People’s Republic, which the Schansmans say is a terrorist group responsible for the attack that killed 298 people.

Latham, who is still representing VTB Bank until it hires new lawyers, also asked the court to stay the case until July 1, noting that the new lawyers “hope to overcome this hurdle soon”.

The case is Schansman et al. vs. Sberbank of Russia PJSC et al., SDNY, 19 02985.

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