Latham Gets OK to Drop Russian Bank VTB in Anti-Terror Case

Latham & Watkins can stop defending sanctioned Russian bank VTB Bank in an anti-terror case in New York, a federal judge ruled Monday.

Latham last month asked to withdraw from the case, brought by the parents of a U.S. man who died in the 2014 downing of Malaysia Airlines Flight 17 over Ukraine. The firm will be officially released on June 3, U.S. Magistrate Judge Gabriel Gorenstein said.

The litigation highlights the thorny issues facing Big Law firms seeking to cut ties with Russian clients after the country’s military invasion of Ukraine. VTB Bank is one of several state-owned institutions sanctioned by the U.S., U.K., and European union over the attacks.

White & Case and Debevoise & Plimpton last week again pursued the dismissal of the lawsuit on behalf of sanctioned Russian bank Sberbank. They also said they will soon formally request to withdraw from the case.

The parents of Quinn Schansman, a U.S. man who died in the downing of Malaysia Airlines Flight 17, are suing the banks and others in a federal court in Manhattan. They allege that the banks provided financing to the Donetsk People’s Republic, which they say is a terrorist group responsible for the attack that killed 298 people.

VTB Bank must have new lawyers by June 2 or face a default judgment, Gorenstein said. If VTB doesn’t have lawyers on record by then, Latham will be required to file with the court contact information and title for the clients they’ve communicated the ruling to.

The case is: Schansman v. Sberbank of Russia, S.D.N.Y., No. 1:19-cv-02985.