IN RE: APPLICATION OF CRC LIQUID STRATEGIES FUND, LP
25 Misc. 264 (PAE)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
January 6, 2026
PAUL A. ENGELMAYER, District Judge
PAUL A. ENGELMAYER, District Judge:
Before the Court is a motion by CRC Liquid Strategies Fund, LP (“CRC-LSF“) to compel Citigroup, Inc. (“Citigroup“) to comply with a subpoena issued pursuant to
For the following reasons, the Court finds Citigroup lacks the ability to obtain the subpoenaed documents, and denies CRC-LSF‘s motion to compel.
I. Background
A. Factual Background2
CRC-LSF is a Delaware limited partnership with its principal office in New York. Dkt. 2 (the “Application“) at 2. Citigroup is an American multinational investment bank and financial services company. Id. at 3.
On April 25, 2025, CRC-LSF and similarly situated creditors filed an involuntary insolvency petition against Préstamos Felices before the Second District Court for Insolvency Matters in Mexico City, Mexico. Id. at 10. The petition initiated a bankruptcy proceeding, with the aim of preserving the Préstamos Felices estate, preventing further dissipation of assets, and protecting creditors’ collective interests. Id. As of June 2025, that proceeding was in its initial phase, which entails court appointment of an independent examiner to conduct a detailed financial analysis of Préstamos Felices. Id. In addition to the bankruptcy proceeding, CRC-LSF states that it plans to commence commercial and criminal litigation (the “contemplated litigation“) against Préstamos Felices in the Mexican courts. Id. at 12.
B. Procedural History of This Action
On June 13, 2025, CRC-LSF filed an ex parte application pursuant to
On June 18, 2025, on the basis of the factual representations in the Application, the Court granted the Application. Dkt. 8. On July 4, 2025, CRC-LSF served the Subpoena on Citigroup. Dkt. 15; see also Dkt. 6-1 (“Subpoena“). The Subpoena seeks, inter alia, all opening documents associated with Préstamos Felices accounts; records from those accounts of all incoming and outgoing wire transfers for the period from November 1, 2024 to the present; and all contracts, service agreements, or mandates for domiciliation involving Préstamos Felices. Subpoena at 7–10.
On December 9, 2025, CRC-LSF filed a letter stating that Citigroup claims that it lacks the “ability to obtain the subpoenaed records from Banamex.” Dkt. 19 (“CRC-LSF Ltr.“) at 2. It requested a pre-motion discovery conference in advance of its filing a motion to compel Citigroup to produce the documents responsive to the Subpoena. Id. On December 12, 2025, Citigroup opposed the request on the ground that it “does not have possession, custody, or control of the subpoenaed documents,” such that “CRC-LSF‘s previewed motion to compel would be fruitless.” Dkt. 22 (“Citigroup Ltr.“) at 1.
On December 15, 2025, the Court denied the request for a pre-motion conference, but invited further briefing “on the discrete issue of Citigroup‘s ability to obtain the subpoenaed
II. Legal Standard
II. Discussion
CRC-LSF argues that Citigroup “has the ‘practical ability to request from, or influence [Banamex] to comply with the subpoena.‘” CRC-LSF Br. at 1 (quoting Motorola Credit Corp. v. Uzan, No. 2 Civ. 666, 2013 WL 6098388, at *4 (S.D.N.Y. Nov. 20, 2013)). Citigroup counters that CRC-LSF has not carried its burden of showing Citigroup‘s custody, possession, or control of the documents. Citigroup Br. at 1–2.
In assessing whether a parent has control over a subsidiary for discovery purposes, courts in this Circuit consider: “(1) the degree of ownership and control exercised by the parent over the subsidiary, (2) a showing that the two entities operate as one, (3) demonstrated access to documents in the ordinary course of business, and (4) an agency relationship.” Sicav v. Wang, No. 12 Civ. 6682 (PAE), 2014 WL 2624753, at *4 (S.D.N.Y. June 12, 2014) (quoting DeSmeth v. Samsung Am., Inc., No. 92 Civ. 3710, 1998 WL 74297, at *9 (S.D.N.Y. Feb. 20, 1998)).
A. Citigroup‘s Degree of Ownership and Control Over Banamex
The first factor is the degree of ownership and control that Citigroup exercises over Banamex. It is, overall, neutral.
At least two of these indicators of ownership and control are present here.
First, Citigroup has “established basic principles for the coordination of the activities of its foreign subsidiar[y].” In re Ski Train Fire of Nov. 11, 2000 Kaprun Austria, 2006 WL 1328259, at *7 (S.D.N.Y. May 16, 2006) (“In Re Ski Train Fire“). For example, Banamex employs a “comprehensive risk management process,” which is “aligned with Citigroup‘s enterprise-wide model“—a fact Citigroup does not dispute. CRC-LSF Br. at 4 (citing Dkt. 24-2 at 37–38). Banamex also provides compensation for key personnel in the form of deferred Citigroup stock awards. Id. These facts suggest coordination between Citigroup and Banamex. See, e.g., In re Ski Train Fire, 2006 WL 1328259, at *7 (parent enacted “a clear vision of . . . a global business, requiring cooperation and coordination among its many parts“).
Second, Citigroup and Banamex hold themselves out as closely related. In December 2025, for example, Citigroup oversaw and executed a 25% minority sale of Banamex equity—a sale in which Citigroup‘s chief executive played a prominent role. CRC-LSF Br. at 2. In
The third indicator—the parent‘s responsibility for the subsidiary‘s operations—presents a less clear picture. In December 2024, Citigroup completed an “operational separation” from Banamex, in advance of a Banamex initial public offering that has not yet occurred. Citigroup Ltr. at 2. This resulted in the separation of Banamex‘s small business, middle-market banking, and consumer operations from Citigroup‘s other Mexican operations. CRC-LSF Br. at 1–2. Nonetheless, Citigroup‘s Resolution Plan—from August 2025—stated that Citigroup and banking branches such as Banamex have “key interconnections relate[d] to operational and technology functions (including infrastructure), global functions, applications and associated support services, real estate, corporate functions and business support services.” Dkt. 25-3 (“Resolution Plan“) at 55. Accordingly, it appears that Citigroup remains involved in Banamex‘s operations, but not necessarily to the extent that courts deem sufficient to establish control. Compare In re Mun, No. 22 Misc. 163, 2022 WL 17718815, at *3 (S.D.N.Y. Dec. 15, 2022) (“A parent company‘s limited involvement with its subsidiary‘s operations . . . is insufficient to establish the necessary control.“), and In re FourWorld Event Opportunities Fund, L.P., No. 22 Misc. 330, 2023 WL 3375140, at *3 (S.D.N.Y. May 11, 2023) (“In re FourWorld“)
The fourth indicator of ownership and control—shared leadership—has not been established. CRC-LSF does not contend that any individual “hold[s] management positions in both companies.” In re Ski Train Fire, 2006 WL 1328259, at *7.
Based on the foregoing considerations, this first factor lends partial support, but not more, to CRC-LSF‘s claim that Citigroup has the ability to access documents in Banamex‘s custody.
B. Whether Citigroup and Banamex Operate as a Single Entity
The second factor examines whether Citigroup and Banamex operate as one entity—i.e., whether their day-to-day operations are substantially in common with each other. This factor favors Citigroup.
A parent and subsidiary may be found to operate as one entity where, for example, they share “employees,” “facilities,” or “office space.” In re Vivendi Universal, S.A. Sec. Litig., No. 2 Civ. 5571, 2009 WL 8588405, at *4 (S.D.N.Y. July 10, 2009). CRC-LSF does not contend that any of these indicators are present here. Nor does it provide any facts to undermine Citigroup‘s representation that “Banamex employees do not report to Citigroup employees, and Citigroup
C. Whether Citigroup Has Access to Banamex‘s Documents in the Ordinary Course of Business
The third factor is whether Citigroup has access, in the ordinary course of business, to Banamex‘s documents. This factor also favors Citigroup.
In assessing a parent company‘s access and ability to obtain documents, courts consider whether documents of the type sought “flow freely between” the parent and subsidiary, Hunter Douglas, Inc. v. Comfortex Corp., No. 8 Misc. 85, 1999 WL 14007, at *3 (S.D.N.Y. Jan. 11, 1999), and whether the parent has access to such documents “in the ordinary course of business,” Credit Bancorp, Ltd., 194 F.R.D. at 472.
The Subpoena seeks, inter alia, account opening documents, communications related to domiciliation services, monthly account statements, and transaction-level information. See Subpoena at 7–10. CRC-LSF argues that Citigroup has access to such documents based on Banamex‘s privacy policy and Citigroup‘s global search function. These facts, however, do not support that the documents at issue “flow freely” between Citigroup and Banamex.
[I]dentification data, authentication data, financial and/or asset data, tax data, demographic data, immigration data, academic data and professional data, data on your consumption preferences in relation to our products and services. We may also request and process biometric data (such as fingerprints, voice recognition, facial identification features, and/or data relating to keyboard typing patterns and behavior when using our electronic banking services) and location data.
Id. at 13. The privacy policy states that it collects such data to, inter alia, “analyze your profile in order to determine whether you are eligible to purchase certain products and services,” “accredit, validate, and verify your identity,” and “[r]espond to and follow up on investigations and reviews of complaints.” Id. at 14–15. And it states that Banamex may transfer such data to “[a]ffiliates, subsidiaries, and entities” of Banamex for purposes such as “carry[ing] out actions aimed at preventing illegal activities” and “determin[ing] whether you are eligible to purchase” products offered by an affiliate. Id. at 18.
These provisions suggest that certain information flows between Citigroup and Banamex—specifically, personal data falling into the categories listed above. But they do not support that there is a free exchange of the documents sought by the Subpoena. Contrary to CRC-LSF‘s representation that the privacy policy “defines ‘personal financial information’ as including financial records such as account statements and transaction histories,” CRC-LSF Br. at 3, the policy does not define personal financial information at all, let alone in that fashion. The privacy policy instead appears to be a routine notice—akin to that encountered in creating an account on a smart phone application or social media platform—that personal data will be collected and shared, largely to enable Banamex and its affiliates to engage in targeted marketing efforts, maintain communication with customers, and customize customers’ banking experiences.
Accordingly, CRC-LSF has not carried its burden of showing Citigroup‘s access.6 This factor supports Citigroup. See, e.g., Sicav, 2014 WL 2624753, at *8–9 (access not demonstrated where plaintiffs failed to show “regular access” or identify instances when parent sought documents from its subsidiaries); In re Ski Train Fire, 2006 WL 1328259, at *6 (same, where parent distributed circular to subsidiaries and subsidiaries submitted reports to parent, but there was “no evidence that in their day-to-day business transactions the companies exchange documents” or that “they have exchanged documents relating to the issues in this lawsuit“); cf. Coventry Cap. US LLC v. EEA Life Settlements Inc., 334 F.R.D. 68, 73 (S.D.N.Y. 2020) (access established where evidence “indicates a flow of information and documents” from subsidiary to parent “in the ordinary course of business“); In re Brookfield Infrastructure Partners L.P., 2025 WL 3215607, at *15 (same, where agreement with subsidiary gave parent “full access” to all “books, records, accounts, tax returns, contracts, commitments, and records” of subsidiary).
The fourth factor considers whether an agency relationship exists between the parent and subsidiary. Because CRC-LSF does not argue that Citigroup acts as an agent of Banamex, and the evidence does not suggest as much, this factor also supports Citigroup. See, e.g., Sicav, 2014 WL 2624753, at *9 (agency relationship not established where “[p]laintiffs only half-heartedly argue[d] that” parent and subsidiary had such a relationship); In re Ski Train Fire, 2006 WL 1328259, at *7 (same, where “there is no evidence that” parent acts as subsidiary‘s agent “in the legal sense“).
E. Overall Assessment
Because three of the four factors favor Citigroup, CRC-LSF has not met its burden of showing that Citigroup has the “legal right, authority, or ability” to obtain documents from Banamex on demand. DeSmeth, 1998 WL 74297, at *9. In sum, although Citigroup is a majority owner of Banamex, has some operational involvement with Banamex, and coordinates with Banamex on various matters, the two entities do not share offices or employees, engage in the free-flowing exchange of documents of the sort sought here, or have an agency relationship. Accordingly, Citigroup cannot be said to “control” the documents in Banamex‘s custody. See, e.g., In re FourWorld, 2023 WL 3375140, at *3 (no control where parent oversaw subsidiary‘s business operations and used subsidiary to conduct brokerage activities, but petitioner failed to demonstrate substantial management overlap or shared day-to-day operations); In re Liverpool Ltd., 2021 WL 5605044, at *3 (same, where subsidiary was wholly owned by parent and managing executive served as officer of both parent and subsidiary, but facts showed “[l]imited interconnectedness“); In re Mun, 2022 WL 17718815, at *3 (same, where parent company led
CONCLUSION
For the reasons stated above, the Court denies the motion to compel. The Clerk of Court is respectfully directed to terminate the motion pending at docket 19.
SO ORDERED.
PAUL A. ENGELMAYER
United States District Judge
Date: January 6, 2026
New York, New York