Saint-Gobain Seeks to Identify Xinyi’s Assets, Execute $24 Million Judgment; Xinyi Objects
July 13, 2010

Saint-Gobain Autover USA Inc. and the related Saint-Gobain companies have filed a motion seeking an expedited discovery, in hopes of identifying Xinyi’s assets so that it might obtain the approximately $24 million it is owed as a result of the April judgment made against it. In the recently filed motion, Saint-Gobain Autover speaks of several alleged delays in the defendant’s attempts to pay the debt owed, since the U.S. District Court for the Northern District of Ohio ruled against it last November and determined the final judgment this April in the ongoing patent infringement suit. (CLICK HERE for related story.)

Xinyi had requested (and was granted) an extension in April to secure financing for the debt owed to Saint-Gobain. That extension went until May 31. (CLICK HERE for related story.) Then, as the May 31 deadline approached, the company filed a motion for the court to vacate or adjust the damages against it, or to provide a new trial. (CLICK HERE for related story.) Around May 31, Saint-Gobain says Xinyi also “sought an extension so it could secure a Letter of Credit (LOC)”—an extension that went until June 15.

“On the day the agreed extension lapsed, June 15, Xinyi informed Saint-Gobain that the Bank of China was apparently still reviewing the LOC,” writes the company. “Saint-Gobain was told that counsel would speak with Xinyi that evening due to the time difference. When Saint-Gobain asked again the following morning, they were told no conversation took place, this time due to a Chinese holiday.”

As of June 22, Saint-Gobain officials say they were told that Xinyi and the Bank of China still were negotiating terms on the LOC.

“Now that extended deadline has come and passed leaving Saint-Gobain with no security for its judgment,” writes the company. “Because we have now reached a point where Xinyi’s repeated assurances ring hollow, Saint-Gobain is compelled to move this Court for an order allowing expedited discovery in aid of execution on the Court’s judgment.”

In an effort to execute the judgment, Saint-Gobain says it has “served focused discovery requests to identify Xinyi’s assets,” but says it is subject to “the ephemeral nature of [its] U.S. assets.” Among these, it points to the shipments of windshields and other glass parts throughout the United States by Xinyi; and the money owed to Xinyi by its customers all over the United States.

“Because of Xinyi’s reluctance to provide financial data on customer sales during this litigation, Saint-Gobain does not have information on the amounts or location of Xinyi’s accounts receivable,” writes the company. Based on this, the company is seeking information on property Xinyi owns in the United States, accounts receivable owed by U.S. companies to Xinyi and any of its bank accounts in the United States.

Xinyi has objected to the motion, saying that it has “expended considerable time and effort to obtain the requisite security to stay execution of the judgment,” and details the steps it has taken to secure a bond and/or a letter of credit.

Likewise, Xinyi says that Saint-Gobain has “patently misrepresented the scope of its proposed expedited discovery,” and calls its discovery requests “expansive and burdensome.”

“Without good cause and without discovery appropriately narrow and tailored, Saint-Gobain has no basis upon which to deviate from the normal discovery procedures,” writes Xinyi.

However, Saint-Gobain has replied to Xinyi’s objection, saying, “Xinyi simply cannot offer any legitimate reason to explain why judgment was entered over 3.5 months ago, yet there is still no letter of credit or any indication of when, or if, one will be issued.”

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