China Fishery Group's (CFG) founding Ng family is requesting a New York judge either dismiss an ongoing Chapter 11 bankruptcy case or require the trustee in the case to provide more information before removing all directors, general managers and legal representatives at China Fishery Group Peru Singapore's direct subsidiaries, who are also Ng family members.

Trustee William Brandt claims the litigation-riddled seafood family, whose Pacific Andes group of companies originally held CFG, along with a range of other assets, is standing in the way of his move to net a $459 million (€421 million) inter-company claim owned by non-debtor CFG Investment to China Fishery International (CFIL), a move he says will save the group's Peruvian operating companies, which he has been trying without success to sell for close to three years, incurring around $10.3 million (€9.4 million) per year in tax costs.

In 2018 the court ruled Brandt could proceed with a process known as "netting," where he bundled several intercompany debt claims owed between CFG Peru subsidiaries into the above claim.

The arrangement is used in cases where a clearing house is needed in order to settle complex debt obligations among subsidiaries.

On Tuesday, lawyers for the family requested "an analysis impact of such netting on creditors or other stakeholders" if Brandt is approved to move forward and does not successfully sell the Peruvian entities.

The family said Brandt is using the netting request as a "retaliatory" measure with the aim to take control of companies beyond what he was originally appointed to manage.

"The removal of the directors effectively gives the trustee powers that extend beyond those provided for in the Trustee Order, which appointed him chapter 11 trustee of CFG Peru Singapore only, and not other debtor entities...for which he now seeks to take control," CFG attorneys argued.

The attorneys also asked that the Ng family be indemnified from any liability in Brandt's netting plan, which would allow the family to escape further scrutiny from creditors if China Fishery's Peruvian operations are not sold by Brandt.

"It is reasonable for the debtors and the Ng subsidiary directors to seek basic information to ensure that they are complying with their fiduciary duties," the lawyers said. "It is also not unreasonable for the Ng subsidiary directors to seek indemnification in case any aggrieved creditors decide to take legal action because the preliminary netting transaction operates unfairly as between creditors."