United States v. Paolo Provenzi, 1:21-cv-00398

The United States filed an interpleader action after seizing a 1996 Ferrari F50, with competing claims of ownership from Paolo Provenzi and the Ikonick defendants (Mohammed Alsaloussi and Ikonick Collection Ltd.).
The Ikonick defendants’ attorneys were allowed to withdraw, and Ikonick (a corporate entity) was ordered to appear by new counsel or risk default.
Ikonick failed to obtain new counsel by court deadlines and was declared in default; Provenzi subsequently moved for default judgment to dismiss Ikonick’s ownership claims and gain exclusive rights to the Ferrari.
Ikonick later secured new counsel and moved to vacate the default, arguing it was not willful and did not prejudice Provenzi.
The district court reviewed the magistrate judge’s recommendation on the motion for default judgment and Ikonick’s objection to the default order.
The court ultimately vacated the default against Ikonick and denied Provenzi’s motion for default judgment, allowing the case to proceed on the merits.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Should Ikonick’s ownership claim be dismissed by default?	Ikonick failed to appear by counsel as ordered, so its claims should be dismissed and Provenzi declared the exclusive owner.	Delay was not willful; Ikonick was negotiating with former counsel and has now appeared by new counsel, so default should be vacated.	Default judgment denied; default vacated; case to proceed on the merits.
Was Ikonick’s default willful?	Ikonick ignored court orders and deadlines.	Delay was due to genuine difficulties in securing counsel.	Not willful; Ikonick provided a reasonable excuse.
Would vacating the default prejudice Provenzi?	Delay harms Provenzi’s use/enjoyment of the unique Ferrari.	No loss of evidence or significant prejudice; delay alone is insufficient.	No prejudice; vacating default is appropriate.
Has Ikonick shown a potentially meritorious defense?	No defense established; Provenzi should receive exclusive ownership.	There are genuine factual issues regarding ownership to be litigated.	Meritorious defenses exist; the matter should be litigated.

Enron Oil Corp. v. Diakuhara, 10 F.3d 90 (2d Cir. 1993) (strong preference for resolving disputes on the merits and analyzing defaults under a lenient standard)
Lattanzio v. COMTA, 481 F.3d 137 (2d Cir. 2007) (corporate entities must appear through counsel)
S.E.C. v. McNulty, 137 F.3d 732 (2d Cir. 1998) (standard for determining willfulness in default context)
Green v. New York, 420 F.3d 99 (2d Cir. 2005) (outlining the two-step default judgment process)