Class-action lawsuit against Peter Nygard on hold after U.S. government requests stay of proceedings

A class-action lawsuit against Peter Nygard involving 57 women who allege the former fashion executive sexually assaulted themhas been put on hold.

The judge presiding over the case in the Southern District of New York entered a stay of proceedings on Friday,court records show.

The judge's order is sealed, but a screenshot of the court docket posted to Twitter on Friday by Pete Brush, a reporter on New York courts for the news service Law360, shows the U.S. government was granted leave to intervene. It also shows "the government is directed toinform the court within 48hours of the completion of its proceedings, and advise the court whether it may lift the stay."

A stay of proceedings means the case has been put on hold, but it doesn't mean it's been dropped. The court can later lift the stay and continue the proceedings.

In February, the FBI raided Nygard's New York offices as part of a criminal sex-trafficking investigation shortly after the class-action was filed. No charges have been laid.

Police in Canadaand the Bahamas are also investigating Nygard.

"I'm not surprised by this," said Winnipeg lawyer Robert Tapper, whoisn't involved in this case.Generally speaking, he said, police don't want a civil trial to interfere with an active criminal investigation.

"If you're the police and the lawyers representing the police investigators, you don't want the civil trial lawyer scheduling an examination for discovery or a deposition of a witness," Tapper said."You want to do your own investigation."

In Canada and the U.S., lawyers can call witnesses to testify in a civil trial, he said, but unlikeinCanada, Americans can depose witnesses prior to a trial, regardless of a police probe.

"You don't have to prove a case beyond a reasonable doubt in a civil case," but in a criminal trial, "the state does not have that luxury," Tappersaid.

"So they don't want anyone else trampling on their investigation."

Nygard denies the sexual assault claims, and none of the allegations have been proven in court.

Shannon Snedaker,a Florida-based lawyer with experience representing victims of human trafficking, said thegovernment can ask for a stay of proceedings to protect the integrity of active investigations.

"There is a provision within that code that enables the federal government to come and intervene in a proceeding if there is a federal criminal investigation going on," said Snedaker.

"It may mean that something might be coming next, whether it's an arrest or an indictment or something is coming down the pipeline, or that they are still investigating."

In February, 10 women filed a class-action lawsuit against Nygard and his companies, alleging he had raped and sexually assaulted the plaintiffs.Other women have since signed onto the lawsuit from the U.S., Canada and the Bahamas, bringing the total number involved in the lawsuitto 57.

Their allegations date back as faras 1977, and some of the women allege they were assaulted when they were as young as 14 or 15.

In July, Nygard filed a motion to dismiss the claims of most of the 57 plaintiffs in the case, arguing that 50 of the women have no connection to New York, and the American court doesn't have jurisdiction over him or his companies named in the civil lawsuit.

Calls to Nygard's spokespeople were not immediately returned.

Nygard companies in receivership

Nygard has been involved in a string of legal proceedings in recent months.

Last week, two of his sons launched a separatelawsuit, alleging Nygard set them up to be raped by his girlfriend described as a "known sex worker"when they were teenagers.

On the corporate side, nineNygard companies which haveoffices in Winnipeg, New York and Torontohave been in court-ordered receivership since March 18, to pay back more than $25 million US to secured lenders.

Manitoba's Court of Queen's Bench has since approved the sale of two Nygard properties, including the company headquarters in Torontoand the property on Notre Dame Avenue in Winnipeg. Nygard's retail outlets in the U.S. and Canada are currently in the process of liquidation sales.

In an April report to the court, the receiver said it had discovered thousands of documents and data were deleted after Nygard Inc. was served with a grand jury subpoena from the United States District Court for the Southern District of New York on Feb. 25.

RichterAdvisory Group said its review of the Nygard companies revealed 10,488 files had been deleted by three users; two of them were believed to be IT staff performing maintenance activities, but the third user was identified as a former Nygard director.

Richter said it was investigating. No further updates have been provided on the issue.

A copy of the subpoena attached to the receiver's report says Nygard Inc. was ordered to produce documents dating back to Jan. 1, 2008, for a criminal investigation.

Among other things, the court ordered the company to hand over "all documents, records, and communications concerning or reflecting allegations of sexual misconduct, harassment or assault by Peter Nygard" and "every date in the last five years in which the company purged any data."