The U.S. Court of Appeals for the Second Circuit on Thursday granted stays pending appeal on forfeiture actions against properties found earlier this year to have been illegal fronts for the Iranian government.

The panel of Circuit Judges Rosemary Pooler, Richard Wesley and Peter Hall halted the government and creditors' ability to take action on a dozen properties owned by the Alavi Foundation and 650 Fifth Avenue Co. The stay is a win for the appellate team, which has asked the appellate court to reverse the jury's decision in the district court case before U.S. District Judge Katherine Forrest of the Southern District of New York.

“We are very pleased that the Court of Appeals granted our motion for a stay in these forfeiture and turnover actions,” Patterson Belknap Webb & Tyler partner Daniel Ruzumna said in a statement. The stays allow claimants to “pursue the appeal without concern that the properties at issue will be lost before the appeal is even decided,” Ruzumna added.

In their brief filed with the appellate court Oct. 17 in In re 650 Fifth Avenue and Related Properties, 17-3258, the legal teams from Patterson Belknap and Debevoise & Plimpton argued that the stays were justified largely because of the high chance of success on appeal. The brief focused largely on Forrest's handling of the case over the years.

“It is impossible to overstate the district court's skepticism of claimants' defense in this case and how it operated to deprive claimants of a fair trial,” the brief states.

According to the claimants, a number of the problems they claim occurred were a “repetition of errors” the district court made prior to a previous appeal to the Second Circuit after Forrest granted summary judgment for the government five days prior to the start of trial in 2013. The appellate court vacated the judgment in 2016, remanding the case and identifying a number of issues of concern with the district court's proceedings.

The claimants state, for example, that the appellate court found the then-defendants' statute of limitation defense was “hardly developed at all” after the district court had “repeatedly denied …attempts to obtain discovery.” Despite this, Forrest continued to refuse their requests, later dismissing the defense on summary judgment.

Likewise, an attempt to suppress evidence at trial that the defendants said was obtained illegally by the government was denied by Forrest, despite the appellate court finding on the initial appeal that the FBI's search warrant “plainly lacked particularity as to the crimes at issue,” the claimants state in their brief.

Forrest's instruction to the jury that they could draw adverse inferences from two members of the board of the company invoking of their Fifth Amendment rights, and to not allow the introduction of evidence explaining just why they had, also represented alleged errors the claimants presented in their brief.

Overall, the brief argues, Forrest's accumulative actions deprived the defendants in the case of a fair trial.

“The trial court's antipathy toward the case was palpable, and the respects in which it manifested itself were innumerable … [T]his case was not tried on a level playing field,” the claimants stated, promising to provide more details in their merits brief.

A spokesman for the U.S. Attorney's Office for the Southern District of New York declined to comment.