Justice Dissolves Order Freezing Palestinian Funds

Kalbian Hagerty LLP represented the Palestine Monetary Authority

(Nov. 8, 2005) -- A Manhattan Supreme Court justice has dissolved an order freezing $30 million at the Bank of New York in a setback to an effort to collect a $116 million judgment against the Palestinian National Authority for the 1996 terrorist slaying of a U.S. citizen.

Acting Justice Shirley Werner Kornreich dissolved a restraining order served on the Bank of New York by a Rhode Island lawyer representing the estate and family members of Yaron Ungar, who was killed when members of Hamas riddled his car with bullets while he was in Israel.

Justice Kornreich in Palestine Monetary Authority v. Strachman, 107777/05, lifted the order finding that, at this stage of the proceeding, the Rhode Island lawyer, David Strachman, had not made a sufficient showing that the funds frozen at the Bank of New York belonged to the Palestinian National Authority or the Palestine Liberation Organization.

Final Ruling is Pending

Justice Kornreich also issued a preliminary injunction barring Mr. Strachman from taking further action to attach funds flowing through the account until a final ruling in the case is issued.

She did note, however, that the four-day hearing she had conducted in August had proceeded on an emergency basis with Mr. Strachman only being permitted discovery of Bank of New York records.

Because evidence developed after a full hearing might compel a different legal conclusion, Justice Kornreich ordered the Palestine Monetary Authority, the entity that claimed responsibility for the Bank of New York funds, to post a $30 million bond until the case is resolved.

Without discovery, Mr. Strachman said, "We had both hands tied behind our back. When we have an opportunity to fully and fairly litigate the case, we are optimistic we will prevail."