Avions De Transport Regionale G.I.E. v. Synergy Aerospace Corp., 1:19-cv-06769

ATR (plaintiff) sold/contracted to sell aircraft to Avian; Avian and parent Synergy executed promissory notes (March and September Notes) obligating payment by Sept. 30, 2017 totaling $13,677,659.
Defendants failed to pay by deadline; ATR sued in SDNY on July 22, 2019 to recover the note amounts plus interest; service occurred July 23.
Defendants retained counsel (Squires) but failed to file a timely answer despite multiple courtesy extensions and communications about arbitration and counsel’s health; Clerk entered default on Sept. 11, 2019.
Plaintiff moved for default judgment; Defendants moved Oct. 7 to vacate the entry of default, arguing counsel’s illness, pending arbitration, and financial distress.
Court applied the Rule 55(c) three-factor test (willfulness, meritorious defense, prejudice), found default willful, no meritorious defense (no arbitration agreement shown and notes submitted to NY jurisdiction), and denied vacatur; court entered default judgment for principal, interest, costs ($16,076,313.01 total).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Clerk's entry of default should be vacated under Fed. R. Civ. P. 55(c)	ATR: Defendants knowingly failed to respond; factors favor denying vacatur; default judgment appropriate	Avian/Synergy: counsel illness, ongoing ICC arbitration, excusable neglect, request to stay	Denied — applied 3-factor test and found no good cause to vacate default
Willfulness of the default	ATR: Defendants were aware and repeatedly promised to respond	Defendants: counsel incapacitated by sciatica and overbooked	Court: default was deliberate/willful (promises to respond + long notice)
Existence of a meritorious defense (arbitration)	ATR: Notes consented to NY jurisdiction; no arbitration agreement shown	Defendants: proceedings overlap with ICC arbitration; ask for stay	Court: Defendants failed to produce any arbitration agreement; jurisdiction clauses in notes favor NY court; no meritorious defense shown
Prejudice to plaintiff and entry of default judgment	ATR: Delay risks thwarting recovery given defendants’ insolvency; requests default judgment with interest/costs	Defendants: delay would allow arbitration/jurisdictional determination	Court: prejudice present (risk to recovery); default judgment entered for principal, interest, costs

Bricklayers and Allied Craftworkers Local 2, Albany NY. Pension Fund v. Moulton Masonry & Const., LLC, 779 F.3d 182 (2d Cir. 2015) (articulates three-factor test for vacating default: willfulness, meritorious defense, prejudice)
SEC v. McNulty, 137 F.3d 732 (2d Cir. 1998) (defines willfulness in default context as more than negligence)
Guggenheim Capital, LLC v. Birnbaum, 722 F.3d 444 (2d Cir. 2013) (failure to answer supports inference of willful default)
Gucci Am., Inc. v. Gold Ctr. Jewelry, 158 F.3d 631 (2d Cir. 1998) (defaults from deliberate conduct are not excusable)
State St. Bank & Trust Co. v. Inversiones Errazuriz Ltda., 374 F.3d 158 (2d Cir. 2004) (party seeking vacatur must show rudimentary elements of a meritorious defense)
Pecarsky v. Galaxiworldcom Ltd., 249 F.3d 167 (2d Cir. 2001) (meritorious defense test: evidence that, if proven, would constitute a complete defense)
Swarna v. Al-Awadi, 622 F.3d 123 (2d Cir. 2010) (prejudice inquiry considers whether delay thwarts recovery, increases discovery difficulty, or enables fraud/collusion)
City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114 (2d Cir. 2011) (default admits all well-pleaded factual allegations)
Canfield v. Van Atta Buick/GMC Truck, Inc., 127 F.3d 248 (2d Cir. 1997) (discusses excusable neglect standard under Rule 60(b))