NEW YORK-Turkey’s Uzan family, which has been battling wireless suppliers in legal challenges regarding vendor financing arrangements to Turkish mobile operator Telsim, said a panel of the U.S. Court of Appeals for the 2nd Circuit reversed its earlier decisions in favor of Motorola Inc. and Nokia Corp.
The Uzans said the panel reinstated the appeals of the Uzans, which seek to overturn a judgment previously entered by Federal District Court Judge Jed Rakoff.
“This ruling evens the playing field,” said R. Stan Mortenson of Baker Botts LLP, an attorney for the Uzans. “Now we are in a position to prevail on the merits of the case, which should ultimately lead to the dismissal of judgments against the Uzan family, which are in clear violation of the contracts signed by the parties.”
The case arises from $2.7 billion in vendor financing from Motorola and Nokia to Telsim, Turkey’s second-largest wireless carrier, which is owned by the Uzan family. In January 2002, Motorola and Nokia filed suit in New York seeking to recover those funds from the Uzan family. Judge Rakoff awarded Motorola and Nokia about $5 billion in compensatory and punitive damages under Illinois state law.
The Uzans then appealed the award, which was dismissed by two judges of the 2nd Circuit, but now those actions have been reversed. The Uzans said the current action effectively reinstates the stay of Judge Rakoff’s damages award until a “merits” panel of the 2nd Circuit can consider the matter.
In a statement from Motorola, the company noted its allegations of fraud against the Uzans. “The Uzans’ actions amount to massive business fraud and money laundering across several continents involving multiple
companies,” a Motorola spokesman said. “We will continue with our efforts to recover the money that is rightfully due to Motorola, to the extent permitted by law.”
Motorola said it is reviewing the court order. “No reason or explanation was given for the appellate court decision. The $4.2 billion judgment awarded to Motorola is not affected by this ruling in any way,” the spokesman said.
