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10460. PEGASUS AVIATION I, INC. plf-res, v. VARIG LOGISTICA S.A., def, MATLINPATTERSON GLOBAL ADVISERS, LLC def-ap — Simpson Thacher & Bartlett LLP, New York (Roy L. Reardon of counsel), for ap — Coblentz Patch Duffy & Bass LLP, San Francisco, CA (Richard R. Patch of the bar of the State of California, admitted pro hac vice, of counsel), for res — Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered December 11, 2012, which, insofar as appealed from, granted plaintiffs’ motion for a trial adverse inference instruction against defendants-appellants as a sanction for spoliation of electronic evidence, reversed, on the law and the facts, without costs, and the motion denied.

Plaintiffs are entities that leased aircraft to non-appealing defendant Varig Logistica S.A. (VarigLog), a Brazilian cargo airline. In this action, plaintiffs are suing (1) VarigLog, for breach of the aircraft lease agreements and for conversion of the aircraft, and (2) defendants-appellants (collectively, the MP defendants), as owners of VarigLog (a direct subsidiary of one of the MP defendants), on an alter ego theory and also on the theory that the MP defendants’ conduct constituted direct conversion of the aircraft. Plaintiffs originally sued VarigLog on these claims in a Florida action commenced in February 2008. In October 2008, plaintiffs voluntarily discontinued the Florida action (to which the MP defendants were not parties) and commenced this action against VarigLog and the MP defendants.

 
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