Thomas Wallerstein of Venable

In court papers filed Thursday, Brunswick Rail Management accused its former CEO and the prominent law firm Venable of altering and deleting evidence in a trade secrets dispute.

Brunswick filed a contempt of court motion and a motion for spoliation sanctions in the U.S. District Court for the District of Connecticut against former CEO and New Canaan resident Paul Ostling.

The underlying case claims Ostling relayed confidential information and trade secrets to creditors who could use the information to hurt Brunswick's bargaining position in a $600 million debt restructuring.

Brunswick claims Ostling and Venable ignored a February preliminary injunction from U.S. District Judge Alfred Covello of the District of Connecticut barring destruction of evidence in the case.

“Venable disregarded the PI order and hired an e-discovery vendor to access the Brunswick-owed devices and, in doing so, altered and/or deleted critical forensic evidence of Mr. Ostling's spoliation in the process,” according to the motion.

The contempt of court motion claims that by March, Venable had learned Ostling—a former attorney with Chadbourne & Parke—had taken drastic measures to destroy information. The motion cites testimony from Richard Sultanov, Ostling's former assistant.

The measures Ostling allegedly took include “frantically deleting emails from his personal email account and device, drowning Mr. Sultanov's Brunswick-issued phone in soap and water to delete all data from the phone, instructing Mr. Sultanov to throw the device into the Moscow River in Russia, and hiring an IT firm to professionally delete all data on Mr. Sultanov's Brunswick-owned laptop,” according to the motion.

Brunswick is a Moscow-based company that leases a fleet of 25,000 railcars to corporate clients in Russia.

In a declaration signed Nov. 1, Sultanov, who lives in Moscow, claimed Venable knew about the destruction of evidence.

“Venable was aware of this deletion of information from my company-issued devices from the outset,” wrote Sultanov, who filed a whistleblower complaint with the U.S. Securities and Exchange Commission in December 2016. “Venable knew of this deletion, at a minimum, by March 2017, when they were informed of these facts by me during a phone call with Mr. [Thomas] Wallerstein, a partner at Venable.”

Sultanov also wrote that the law firm had “full knowledge of the deletion of data and the circumstances under which the deletion took place and was the reason they repeatedly requested that I agree to retain a separate U.S. counsel.”

Wallerstein, who works out of Venable's San Francisco office, did not respond to a request for comment Friday. The firm has a marketing department in Los Angeles run by Leo Marquardt. Marquardt also did not respond to a request for comment.

In court filings earlier this year, Wallerstein argued that Ostling and Sultanov made only “limited disclosures” to board members, shareholders and creditors that were consistent with their legal and ethical duties. At the time, Wallerstein also said the two men were “unpopular with those who were trying to improve the financial positions of certain shareholders at the expense of the creditors.”

In an emailed statement Brunswick's attorney, Michael Tu, a partner with Orrick, Herrington & Sutcliffe, wrote, “This was not a motion that Brunswick brought lightly. Venable was given multiple opportunities to return the company-owned devices without reprisals, but they continued to refuse. Once the extent and severity of the spoliation became known, it was important to inform the court.”

Brunswick originally sued in the Northern District of California under the Defend Trade Secrets Act on the theory that Ostling and Sultanov used personal Gmail accounts to misappropriate confidential information, with Google supplying the connection to California. The case was transferred to Connecticut in January.

Assisting Tu in the case are his colleague Jacob Heath and Alfred Pavlis, of Finn Dixon & Herling in Stamford.