OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF EXETER HOLDINGS, LTD., Plaintiffs, v. Linda HALTMAN, Individually, as a Trustee for the Arnold and Sondra Frank Irrevocable Trust, C.H. Trust, Ryann Haltman Trust, and Samantha Haltman Trust, and as Guardian of Minor C. H.; Michael Haltman, Individually, as a Trustee for the C.H. Trust, Ryann Haltman Trust, and Samantha Haltman Trust, and as Guardian of Minor C. H.; Bruce Frank, Individually, as a Trustee for the Arnold and Sondra Frank Irrevocable Trust, B.F. Trust, E.F. Trust, J.F. Trust, and K.F. Trust, and as Guardian of Minors B. F., E. F., J. F ., and K. F.; Kathleen Frank, Individually, as a Trustee for the B.F. Trust, E.F. Trust, J.F. Trust, and K.F. Trust, and as Guardian of Minors B.F., E. F., J. F., and K. F.; Larry Frank Individually, and as a Trustee for the Arnold and Sondra Frank Irrevocable Trust; Arnold Frank; Sondra Frank, Individually, and as a Trustee for the Barbara Cohen–Linda Haltman Trust, Murray Cohen–Linda Haltman Trust, Barbara Cohen–Bruce Frank Trust, Murray Cohen–Bruce Frank Trust, Barbara Cohen–Larry Frank Trust, Murray Cohen–Larry Frank Trust, Ryann Haltman; Samantha Haltman; C. H.; B. F.; E. F.; J. F.; K. F.; Ruth Frank; Arnold and Sondra Frank Irrevocable Trust; Barbara Cohen–Linda Haltman Trust; Murray Cohen–Linda Haltman Trust; Barbara Cohen–Bruce Frank Trust; Murray Cohen–Bruce Frank Trust; Barbara Cohen–Larry Frank Trust; Murray Cohen–Larry Frank Trust; B.F. Trust; C.H. Trust; E.F. Trust; J.F. Trust; K.F. Trust; Hank Frank Trust; Ruth Frank Trust; Todd Frank and Lester Frank as Trustees for Ruth Frank Trust and Hank Frank Trust; Ryann Haltman Trust; Samantha Haltman Trust; 124 New York Avenue Corp.; 140 Maggie Drive Corp.; 22 Bridge Lane Corp.; 22 West Hills Court Corp.; 29 Mill Farm Lane Corp .; 207 Parrish Pond Court West Corp.; 3 Lewis Lane Corp.; Begonia Court Corp.; Bittersweet Partners Inc.; Eden Rock Corp.; Maplewood Associates, Inc.; Short Path House Corp.; Sound Side Ventures, LTD.; Via Trenta Corp.; John Doe(s) 1–100; and ABC Corporation(s) 1–100, Defendants No. CV 13–5475(JS)(AKT) Signed August 25, 2015 Tomlinson, A. Kathleen, United States Magistrate Judge REPORT AND RECOMMENDATION I. PRELIMINARY STATEMENT Plaintiff, the Official Committee of Unsecured Creditors of Exeter Holding Ltd.,[1] (“Plaintiff” or “The Committee”), brings this action against Arnold Frank, Sondra Frank, Linda Haltman, Michael Haltman, Bruce Frank and Larry Frank and the various Trusts named in the Complaint (“Defendants”) for fraud, fraudulent transfers under the Bankruptcy Code, fraudulent conveyances under the New York Debtor and Creditor Law (“DCL”), avoidable preferential transfers, breach of fiduciary duties, aiding and abetting a breach of fiduciary duties, waste and corporate mismanagement, turnover and accounting, and unjust enrichment. The Plaintiff also seeks a declaratory judgment that Exeter was the alter ego of various corporations owned by the insiders,[2] insiders who were also the alter ego of Exeter. See generally Compl. [DE 3]. During the pendency of these proceedings, the parties have filed a multiude of discovery-related motions. This Report and Recommendation addresses Plaintiff's motion for sanctions against Defendants for spoliation of evidence, DE 92. Defendants oppose Plaintiff's motion for sanctions. DE 117–122; 128; 137–139. For the reasons that follow, this Court respectfully recommends to Judge Seybert that Plaintiff's Motion for Sanctions be GRANTED, in part, DENIED, in part, and DEFERRED, in part, to the extent set forth in this Report and Recommendation. II. BACKGROUND FACTS *1 Plaintiff commenced the bankruptcy proceeding in the United States Bankruptcy Court for the Eastern District of New York and the case was assigned to Judge Alan S. Trust. See DE 1. After Judge Seybert granted Plaintiff's motion to withdraw the reference of the adversary proceeding to the bankruptcy court, Plaintiff commenced this civil proceeding in federal district court. See DE 2. Plaintiff brings this action against defendants Linda Haltman, individually, as a Trustee for the Arnold and Sondra Frank Irrevocable Trust, C.H. Trust, Ryann Haltman Trust, and Samantha Haltman Trust, and as guardian of minor C. H.; Michael Haltman, individually, as a Trustee for the C.H. Trust, Ryann Haltman Trust, and Samantha Haltman Trust, and as guardian of minor C. H.; Bruce Frank, individually, as a Trustee for the Arnold and Sondra Frank Irrevocable Trust, B.F. Trust, E.F. Trust, J.F. Trust, and K.F. Trust, and as guardian of minors B. F., E. F., J. F., and K. F.; Kathleen Frank, individually, as a Trustee for the B.F. Trust, E.F. Trust, J.F. Trust, and K.F. Trust, and as guardian of minors B.F., E. F., J. F., and K. F.; Larry Frank individually, and as a Trustee for the Arnold and Sondra Frank Irrevocable Trust; Arnold Frank; Sondra Frank, individually, and as a Trustee for the Barbara Cohen–Linda Haltman Trust, Murray Cohen–Linda Haltman Trust, Barbara Cohen–Bruce Frank Trust, Murray Cohen–Bruce Frank Trust, Barbara Cohen–Larry Frank Trust, Murray Cohen–Larry Frank Trust; Ryann Haltman; Samantha Haltman; C. H.; B. F.; E. F.; J. F.; K. F.; Ruth Frank; Arnold and Sondra Frank Irrevocable Trust; Barbara Cohen–Linda Haltman Trust; Murray Cohen–Linda Haltman Trust; Barbara Cohen–Bruce Frank Trust; Murray Cohen–Bruce Frank Trust; Barbara Cohen–Larry Frank Trust; Murray Cohen–Larry Frank Trust; B.F. Trust; C.H. Trust; E.F. Trust; J.F. Trust; K.F. Trust; Hank Frank Trust; Ruth Frank Trust; Todd Frank and Lester Frank as Trustees for Ruth Frank Trust and Hank Frank Trust; Ryann Haltman Trust; Samantha Haltman Trust; 124 New York Avenue Corp.; 140 Maggie Drive Corp.; 22 Bridge Lane Corp.; 22 West Hills Court Corp.; 29 Mill Farm Lane Corp .; 207 Parrish Pond Court West Corp.; 3 Lewis Lane Corp.; Begonia Court Corp.; Bittersweet Partners Inc.; Eden Rock Corp.; Maplewood Associates, Inc.; Short Path House Corp.; Sound Side Ventures, Ltd.; Via Trenta Corp.; John Doe(s) 1–100; and ABC Corporation(s) 1–100 (collectively, “Defendants”). See Complaint (“Compl.”) [DE 3–9]. The claims are brought pursuant to Sections 105(a), 541, 542, 544, 547, 548, and 550(a) of Title 11 of the United States Code (the “Bankruptcy Code”) and Sections 273, 274, 275, 276, and 276–a of the New York Statet DCL, seeking declaratory relief and money damages resulting from and/or relating to various fraudulent transactions by and between Exeter Holding, Ltd. (the “Debtor” or “Exeter”) and Defendants that left the Debtor Exeter with more than $29 million in claims. Id. ¶ 1. This action relates to the bankruptcy matter entitled In re Exeter Holding, Ltd., Case No. 11–77954–AST (the “Bankruptcy Case”), previously filed in the United State Bankruptcy Court for the Eastern District of New York (the “Bankruptcy Court”). Id. ¶ 2. *2 Plaintiff alleges that Arnold Frank and the other insiders, as that term is defined in the Bankruptcy Code, who started a construction finance business, defrauded their lenders to prevent the lenders from claiming a default on their notes. Id. ¶ 3. In the wake of the economic downturn, Arnold Frank and family appropriated the Debtor's funds, which they transferred to themselves, to trusts, and to related entities that shared management, ownership, and personnel with Exeter. Id. According to the Complaint, the Franks accomplished this task by paying certain of the Defendants' personal expenses and then transfering funds and/or properties to the Defendants, the trusts held for their benefit, or various related entities owned by them. Id. Exeter never received adequate consideration for such transfers. Id. The Complaint further alleges that Exeter paid for the family's medical expenses, cell phones, tuition for elementary school and college, and luxury vehicles. Id. ¶ 4. Between 2006 and 2011, the Franks and Haltmans allegedly transferred approximately $29 million to themselves, their trusts, and the various related entities that they owned. Id. ¶ 4. As a result of Defendants' actions, Exeter was left insolvent and thereby unable to satistfy its outstanding obligations to creditors-obligations apparently totaling millions of dollars which caused these creditors, as well as the estate, substantial financial harm. Id. ¶ 6. This litigation seeks to recover from Defendants jointly and severally at least $29 million, plus interest and costs, which were “willfully and inappropriately siphoned out of the Debtor.” Id. ¶ 7. According to the Complaint, many of these transfers were obtained via Defendants' “fraudulent and deceitful acts at the expense and to the detriment of the Debtor's estate.” Id. There are a total of thirteen causes of action set forth in the Complaint. See generally id. In Count I, Plaintiff asserts a claim for fraud against all Defendants. Id. ¶¶ 323–329. In Count II, Plaintiff brings a claim for actual fraudulent transfer under Section 548(a)(1)(A) of the Bankruptcy Code against all Defendants. Id. ¶¶ 330–335. In Count III, Plaintiff has asserted a claim for actual fraudulent conveyance under Sections 276 and 276–a of the New York DCL against all Defendants. Id. ¶¶ 336–341. In Count IV, Plaintiff has asserted a claim of constructive fraudulent transfer against all Defendants under Section 548(a)(1)(B) of the Bankruptcy Code. Id. ¶¶ 342–347. In Count V, Plaintiff alleges constructive fraudulent conveyance under Sections 273, 274, and 275 of the DCL. Id. ¶¶ 348–357. Count VI is a claim to set aside avoidable preferences pursuant to Section 547 of the Bankruptcy Code. Id. ¶¶ 358365. In Count VII, Plaintiff has asserted a claim for breach of the fiduciary duty of care against Linda Haltman and Arnold Frank. Id. ¶¶ 366–372. Count VIII alleges a claim for breach of the fiduciary duty of loyalty against Linda Haltman and Arnold Frank. Id. ¶¶ 373–379. Plaintiff also asserts a claim for aiding and abetting a breach of fiduciary duty against all Defendants in Count IX. Id. ¶¶ 380–383. Count X sets forth a claim for violation of Section 270 of the New York Business Corporation Law against Linda Haltman and Arnold Frank. Id. ¶¶ 384–387. In Count XI, Plaintiff seeks a declaratory judgment that Exeter and the Alter Ego Insiders[3] are or were the alter egos of the Property Corporations and Exeter, respectively, and are therefore liable for all their debts. Id. ¶¶ 388–392. Count XII alleges a cause of action for turnover and accounting under Section 542 of the Bankruptcy Code. Id. ¶¶ 393–397. Finally, Count XIII asserts a claim for unjust enrichment as against the Fraudulent Transfer Recipient Defendants.[4] Id. ¶¶ 398–401. III. RELEVANT PROCEDURAL HISTORY[5] *3 By unopposed motion dated May 28, 2013, Plaintiff requested that the Court withdraw the reference of the adversary proceeding from the Bankruptcy Court. See DE 1. Judge Seybert granted the motion on September 18, 2013 for the reasons articulated by United States Bankruptcy Judge Alan Trust. See DE 2. The parties were directed to file a joint letter, attaching as exhibits the Complaint in the adversary proceeding, the documents attached to the Complaint, and any other docket entries from the adversary proceeding that the parties deemed relevant. Id. at 3–4. In compliance with that Order, the Plaintiff filed a letter on behalf of all the parties on October 2, 2013, annexing the Complaint and all other documents as mandated by the Court. See DE 3. On February 2, 2015, Plaintiff filed a motion seeking sanctions based on its claim that Defendants spoliated evidence. See DE 92–95. Defendants Bruce Frank and Kathleen Frank filed their opposition to Plaintiff's motion for sanctions on April 8, 2015.[6] DE 122. On April 9, 2015, Defendant Larry Frank, through counsel, filed his individual response to Plaintiff's sanctions motion. Arnold Frank and Sondra Frank filed their resposnes in opposition to Plaintiff's motion for sanctions on April 27, 2015.[7] DE 137–139. Also on that date, Linda and Michael Haltman (“Haltman Defendants”), through counsel, filed a partial response in opposition to Plaintiff's motion for sanctions as part of their cross-motion to compel. See DE 128. On May 8, 2015, Plaintiff filed a reply in support of its motion for sanctions. See DE 141–143. The Haltman Defendants subsequently filed their Memorandum of Law in Opposition to Plaintiff's Motion for Sanctions on May 12, 2015.[8] By Order dated April 7, 2015, Judge Seybert referred this motion to this Court for a Report and Recommendation as to the proper disposition. The Court now turns its attention to the substantive aspect of this motion. IV. PLAINTIFF'S MOTION FOR SANCTIONS BASED UPON SPOLIATION OF EVIDENCE A. The Parties' Contentions Plaintiff moves for sanctions against Defendants, arguing that Defendants “engaged in spoliation by failing to preserve evidence” and that Defendant Linda Haltman engaged in spoliation by destroying evidence[.]” Pl.'s Mem. of Law in Support of Mot. for Sanctions for Spoliation of Evidence (“Pl.'s Mem.”) at 1. Specifically, Plaintiff alleges that Defendants, as officers and directors of Exeter, id. at 13, failed to ensure that: (1) emails were properly archived by Go Daddy, Exeter's third-party email provider; (2) back-ups of Exeter's computer hard drive were properly stored and retained by Iron Mountain, Exeter's third-party back-up provider; and (3) Exeter's computer hard drive was properly preserved instead of enabling Defendant Linda Haltman's deletion of “more than 46,000 files from the Hard Drive in 2011 and 2012.” Id. at 19. Plaintiff asserts that Defendants “were grossly negligent in carrying out their preservation duties”, id. at 19, and that Defendant Haltman's destruction of computer data was willful.” Id. at 17. *4 Plaintiff appears to be seeking sanctions against the Defendants in their individual capacities for the alleged spoliation of evidence. See Pl.'s Mem. at 1. However, Plaintiff characterizes any alleged failures or affirmative wrongdoing giving rise to the instant motion as resulting from the conduct of Exeter acting through it officers and directors. Id. at 13, 19. Any imposition of liability on Defendants in their individual capacities would require the Court to disregard Exeter's corporate form and “pierce the corporate veil,” thus enabling individual liability on the part of Defendants for the alleged wrongful acts engaged in by the corporation itself. See, e.g, Am. Fuel Corp. v. Utah Energy Dev. Co., 122 F.3d 130, 134 (2d Cir.1997). Since Exeter is a New York corporation, see Compl. at ¶ 77, DE 128, Ex. Q, and the majority of the acts giving rise to the Complaint occurred within New York, New York law would govern any veil-piercing analysis. See Kalb, Voorhis & Co. v. Am. Fin. Corp., 8 F.3d 130, 132–33 (2d Cir.1993); In re Adler, Coleman Clearing Corp., 205 Fed. App'x 856, 858 (2d Cir.2006) (approving the application of New York law to pierce the corporate veil where corporation operated in New York and majority of the fraudulent activity occurred within New York). In order to disregard the corporate form, New York law requires a two-part showing: “(i) that the owner exercised complete domination over the corporation with respect to the transaction at issue; and (ii) that such domination was used to commit a fraud or wrong that injured the party seeking to pierce the veil.” Am. Fuel Corp., 122 F.3d at 134; see Wm. Passalacqua Builders, Inc. v. Resnick Developers S., Inc., 933 F.2d 131, 138 (2d Cir.1991) (“The critical question is whether the corporation is a ‘shell’ being used by the individual shareowners to advance their own ‘purely personal rather than corporate ends.’ ”) (internal citations omitted). Even if the veil is not pierced, individual liability may still be premised on a corporate officer's commission of a tort. FLB, LLC, v. Cellco Partnership, 536 Fed. Appx. 132, 133 (2d Cir.2013); see Rentrak Corp. v. Handsman, No. 12–CV–1576, 2014 WL 1342960, at *6 (E.D.N.Y. Mar. 31, 2014) (“[a] corporate officer may be liable for torts committed by or for the benefit of the corporation if the officer participated in their commission.”). However, despite this alternate theory, a number of district courts within this Circuit have ruled out a cause of action for first-party or third-party spoliation, whether intentional or negligent or both, as a matter of New York law. See, e.g., Sterbenz v. Attina, 205 F.Supp.2d 65, 71–73 (E.D.N.Y.2002); Tiano v. Jacobs, 98 Civ 6229, 2001 WL 225037, at *4 (S.D.N.Y. Mar. 6, 2001); Black Radio Network, Inc. v. NYNEX Corp., 44 F.Supp.2d 565, 586; Tietjen v. Hamilton–Beach/Proctor–Silex, 97–CV–188, 97–CV–949, 1998 WL 865586, at *3 (N.D.N.Y. Nov. 25, 1998); Whittlesey v. Espy, 96 Civ. 0671,1996 WL 689402, at *1 (S.D.N.Y. Nov. 26, 1996); Mondello v. Dun & Bradstreet Corp., 94 CIV 4383,1996 WL 239890, at *3 n. 1 (S.D.N.Y. May 9, 1996). *5 The Court also notes that the issue of veil-piercing / alter-ego is the subject of one of Plaintiff's causes of action and is thus an ultimate issue in the case on the merits. See Compl. at ¶¶ 388–92. In any event, neither Plaintiff nor Defendants have properly briefed the Court on the issue of whether the imposition of individual liability for any alleged spoliation of evidence is appropriate at this stage of the proceedings, and, if so, what theory should be relied upon for such a finding. As such, this issue is not properly before the Court for determination and any sanctions that may result from the instant motion shall be levied solely upon Exeter and its corporate officers and directors in their official capacity. In their opposition to the motion, the Haltman Defendants argue that: (1) Defendant Linda Haltman “preserved all documents and information of conceivable relevance to this action,” see Haltman Defs.' Mem. in Opp. to Pl.'s Mot. for Sanctions for Spoliation of Evidence (“Haltman Defs.' Mem.”) [DE 147] at 22; (2) Defendant Michael Haltman was not an officer or director of Exeter and therefore he cannot be held personally liable for any action or inaction that resulted in a loss of evidence, see id. at 10; and (3) Plaintiff has failed to point to any relevant evidence that was lost or destroyed thereby making imposition of sanctions inappropriate. Id. at 8, 11. Lawrence Frank also opposes Plaintiff's motion and argues in his Memorandum of Law that he: (1) was not a party to any of the conduct enumerated in Plaintiff's motion; (2) was neither on Exeter's board nor a corporate officer; (3) did not maintain Exeter's books or records; and (4) had no authority to “order Exeter to engage in any conduct, such as imposing a litigation hold on records.” Def. L. Frank's Mem. in Opp. to Pl.'s Mot. for Sanctions for Spoliation of Evidence (“L. Frank Mem.”) [DE 119] at 2. Bruce Frank, representing himself pro se, submitted a Declaration opposing Plaintiff's motion. See April 5, 2015 Declaration of Bruce Frank in Opp'n to Pl.'s Mot. for Sanctions (“B. Frank Decl.”) [DE 122] at ¶ 2. Bruce Frank asserts that: (1) he was never an officer or director of Exeter; (2) any discussions he had or emails he circulated were done in his capacity as a consultant; (3) he maintained “no control over any aspect of Exeter's decision-making and was not an authorized signatory on any of Exeter's bank accounts;” and (4) he never entered or deleted information from Exeter's computer. Id. ¶¶ 3–8[9] Arnold Frank, representing himself pro se, filed an Affidavit opposing Plaintiff's motion in which he states that he he replaced his personal computer and therefore is only able to retrieve emails dating as far back as January 27, 2011 and that any emails pertaining to Exeter were made available to Plaintiff. See April 21, 2015 Affidavit of Arnold Frank in Opp'n to Plaintiff's Mot. For Sanctions (“A. Frank Aff.”) [DE 137] at ¶ 3. In addition, he states that he “never intentionally omitted any documents from my or Exeter's computer. Nor did I direct others to do so.” Id. at ¶ 4. *6 Sondra Frank, also representing herself pro se, filed an Affidavit opposing Plaintiff's motion in which she asserts that she (1) did not have any supervisory role with respect Exter's retention, maintenance or preservation of records; (2) never had access to any documents or data with respect to Exeter; and (3) has never been involved “in working for Exeter in any way.” See Declaration of Sondra Frank in Opp'n to Pl.'s Mot. for Sanctions (“S. Frank Decl.”) [DE 138] at ¶¶ 2–4.[10] B. Applicable Legal Standards 1. General Principles “Spoliation is the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation.” West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir.1999); accord Byrnie v. Town of Cromwell, 243 F.3d 93, 107 (2d Cir.2001). A court may impose sanctions against a party who spoliates evidence pursuant to Rule 37(b) of the Federal Rules of Civil Procedure as well as through the Court's inherent powers to control the judicial process and the litigation before it. See Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 106–07 (2d Cir.2002); West, 167 F.3d at 779; Centrifugal Force, Inc. v. Softnet Commc'n, Inc., 783 F.Supp.2d 736, 741 (S.D.N.Y.2011); Zubulake v. UBS Warburg LLC (“Zubulake V'?i), 229 F.R.D. 422, 430 (S.D.N.Y.2004). In situations where sanctions are warranted, district courts have broad discretion in “crafting an appropriate sanction for spoliation.” West, 167 F .3d at 779; see Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 436 (2d Cir.2001) (“The determination of an appropriate sanction for spoliation, if any, is confined to the sound discretion of the trial judge....”); Reilly v. Natwest Mkts. Grp. Inc., 181 F.3d 253, 267 (2d Cir.1999) (“Whether exercising its inherent power, or acting pursuant to Rule 37, a district court has wide discretion in sanctioning a party for discovery abuses.”). The applicable sanction “should be molded to serve the prophylactic, punitive, and remedial rationales underlying the spoliation doctrine .” West, 167 F.3d at 779. Stated another way, the selected sanction should be designed to “(1) deter parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore the prejudiced party to the same position he would have been in absent the wrongful destruction of evidence by the opposing party.” Id. (internal quotation marks omitted); accord Chin v. Port Auth. of New York & New Jersey, 685 F.3d 135, 162 (2d Cir.2012). Where there has been an egregious case of spoliation, the facts may support the use of a terminating sanction such as a default judgment; however, this is a drastic remedy which should only be used in severe cases. See Gutman v. Klein, No. 03 CV 1570, 2008 WL 468208, at *12 (E.D.N.Y. Oct. 15, 2008) (recognizing a default judgment as the “ultimate sanction” and that it “should not be imposed lightly, particularly when alternative remedies are sufficient to address the spoliation”) (internal quotations and citation omitted); West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir.1999) (“[B]ecause dismissal is a drastic remedy, it should be imposed only in extreme circumstances, usually after consideration of alternative, less drastic sanctions.”) *7 In less severe cases, the spoliation of evidence “can support an inference that the evidence would have been unfavorable to the party responsible for its destruction.” Zubulake V, 229 F.R.D. at 430 (quoting Kronisch v. United States, 150 F.3d 112, 126 (2d Cir.1998)). However, a sanction in the form of an adverse inference instruction is still “an extreme sanction and should not be imposed lightly.” Treppel v. Biovail Corp., 249 F.R.D. 111, 120 (S.D.N .Y.2008); see Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 219 (S.D.N.Y.2003) (“Zubulake IV” ) (“In practice, an adverse inference instruction often ends litigation—it is too difficult a hurdle for the spoliator to overcome.”). 2. The Three–Part Test A party seeking sanctions has the burden of establishing “(1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a ‘culpable state of mind’; and (3) that the destroyed evidence was ‘relevant’ to the party's claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.” Residential Funding Corp., 306 F.3d at 107 (quoting Byrnie, 243 F.3d at 107–12); accord Centrifugal Force, Inc. v. Softnet, 83 F.Supp.2d 736, 741 (S.D.N .Y.2011); Zubulake V, 229 F.R.D. at 430. Part I: Duty to Preseve The first element a party must show when seeking sanctions for the destruction of evidence is “that the party having control over the evidence had an obligation to preserve it at the time it was destroyed.” Chin, 685 F.3d at 162; Residential Funding Corp., 306 F.3d at 107. The Second Circuit has determined that “[t]he obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” Fujitsu, 247 F.3d at 436 (citing Kronisch, 150 F.3d at 126). Pursuant to this obligation, “anyone who anticipates being a party or is a party to a lawsuit must not destroy unique, relevant evidence that might be useful to an adversary.” Zubulake IV, 220 F.R.D. at 217; accord Curcio v. Roosevelt Union Free Sch. Dist., 283 F.R.D. 102, 108 (E.D.N.Y.2012). “In this respect, ‘relevance’ means relevance for purposes of discovery, which is ‘an extremely broad concept.’ “ Orbit One Commc'ns, Inc. v. Numerex Corp., 271 F.R.D. 429, 436 (S.D.N.Y.2010) (quoting Condit v. Dunne, 225 F.R.D. 100, 105 (S.D.N.Y.2004)). Therefore, “[w]hile a litigant is under no duty to keep or retain every document in its possession[,] it is under a duty to preserve what it knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery and/or is the subject of a pending discovery request.” Zubulake IV, 220 F.R.D. at 217 (internal quotations and alterations omitted); see Scalera v. Electrograph Sys., Inc., 262 F.R.D. 162, 171 (E.D.N.Y.2009). *8 The duty to preserve arises, not when litigation is certain, but rather when it is “reasonably foreseeable.” Byrnie, 243 F.3d at 107; see F.D.I.C. v. Malik, No. 09 Civ. 4805, 2012 WL 1019978, at *1 n. 1 (E.D.N.Y. Mar. 26, 2012) (holding that duty to preserve arose when attorneys who allegedly destroyed documents represented the plaintiff in the underlying transaction at issue); In re Semrow, No. 03 Civ. 1142, 2011 WL 1304448, at *3 (D.Conn. Mar. 31, 2011) (holding that duty to preserve vessel arose prior to commencement of suit because the fact that fatalities occurred should have put party on notice of future litigation); Siani v. State Univ. of New York at Farmingdale, No. 09 Civ. 407, 2010 WL 3170664, at *6 (E.D.N.Y. Aug. 10, 2010) (holding that receipt of letter informing defendants of alleged discrimination and intent to pursue claim triggered duty to preserve); In re Vitamin C Antitrust Litig., No. 05–CV–453, 2013 WL 504257, at *9 (E.D.N.Y. Feb. 8, 2013) (“[T]he law is clear that the obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation, and that this obligation may arise prior to the filing of a suit if the litigation is reasonably anticipated.”) (quotations omitted)); Toussie v. Cnty. of Suffolk, No. 01–CV–6716, 2007 WL 4565160, at *6 (E.D.N.Y. Dec. 21, 2007). Although the inquiry is necessarily a fact specific one, the Court notes that several other courts have found that the duty to preserve attaches prior to the initiation of formal proceedings. Siani v. State Univ. of New York at Farmingdale, No. 09–CV–407, 2010 WL 3170664, at *6 (E.D.N.Y. Aug. 10, 2010) (holding that receipt of letter informing defendants of alleged discrimination and intent to pursue claim triggered duty to preserve); Schwarz v. FedEx Kinko's Office and Print Servs., Inc., No. 08–CV–6486, 2009 WL 3459217, at *6 (S.D.N.Y. Oct. 27, 2009) (holding that duty to preserve evidence arose when party received letter that gave it “good reason to anticipate imminent litigation”); Creative Res. Gr. of New Jersey, Inc. v. Creative Res. Grp., 212 F.R.D. 94, 106 (E.D.N.Y.2002) (concluding that the duty to preserve arose months prior to the commencement of the lawsuit when the problems that eventually led to the filing of the lawsuit first surfaced). Moreover, while a litigant need not retain every document in its possession, litigants are under a duty to preserve evidence that may be relevant to future litigation. Fujitsu, 247 F.3d at 436; Zubulake IV, 220 F.R.D. at 217. Part II: Culpable State of Mind “Even where the preservation obligation has been breached, sanctions will only be warranted if the party responsible for the loss had a sufficiently culpable state of mind.” In re WRT Energy Sec. Litig., 246 F.R.D. 185, 195 (S.D.N.Y.2007); see Residential Funding, 306 F.3d at 107–08. Failures to preserve relevant evidence occur “ ‘along a continuum of fault—ranging from innocence through the degrees of negligence to intentionally.’ “ Reilly, 181 F.3d at 267 (quoting Welsh v. United States, 844 F.2d 1239, 1246 (6th Cir.1988)). In this Circuit, “the ‘culpable state of mind’ factor is satisfied by a showing that the evidence was destroyed ‘knowingly, even if without intent to breach a duty to preserve it, or negligently.’ “ Residential Funding Corp., 306 F.3d at 108 (quoting Byrnie, 243 F.3d at 109) (internal alterations and emphasis omitted); Curcio, 283 F.R.D. at 111. *9 “In the discovery context, negligence is a failure to conform to the standard of what a party must do to meet its obligation to participate meaningfully and fairly in the discovery phase of a judicial proceeding.” In re Pfizer Secs. Litig., 288 F.R.D. 297, 314 (S.D.N.Y.2013) (internal quotations omitted); accord Harkabi v. SanDisk Corp., 275 F.R.D. 414, 418–19 (S.D.N.Y.2010)). A party is negligent even if the failure “results from a pure heart and an empty head.” In re Pfizer, 288 F.R.D. at 314; Curcio, 283 F.R.D. at 111; see Mastr Adjustable Rate Mortgages Trust 2006–OA2 v. UBS Real Estate Sec. Inc., 295 F.R.D. 77, 84 (S.D.N.Y.2013), aff'd No. 12 CIV. 7322 HB, 2013 WL 6840282 (S.D .N.Y. Dec. 27, 2013) (“In order to ‘protect the innocent litigant from the destruction of evidence by a spoliator who would otherwise assert an empty head, pure heart defense,’ one who fails to preserve evidence will be sufficiently culpable even when acting with ordinary negligence.”) (quoting Orbit One, 271 F.R.D. at 438) (alterations omitted). “It follows that gross negligence also satisfies the culpability requirement.” Sekisui Am. Corp. v. Hart, 945 F.Supp.2d 494, 503 (S.D.N.Y.2013) (citing Chin, 685 F.3d at 162); see Residential Funding Corp., 306 F.3d at 109. “ ‘Gross negligence has been described as a failure to exercise even that care which a careless person would use.’ “ Williams v. New York City Transit Auth., No. 10 CV 0882, 2011 WL 5024280, at *7 (E.D.N.Y. Oct. 19, 2011) (quoting Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., L.L.C., 685 F.Supp.2d 456, 463–64 (S.D.N.Y.2010) (abrogated on other grounds by Chin, 685 F.3d 135)). Courts in this circuit have found that the “failure to preserve evidence resulting in the loss or destruction of relevant information is surely negligent, and, depending on the circumstances, may be grossly negligent.” Pension Comm., 685 F.Supp.2d at 464–65; see SJS Distribution Sys., Inc. v. Sam's E., Inc., No. 11 CV 1229, 2013 WL 5596010, at *4 (E.D.N.Y. Oct. 11, 2013). Moreover, although the failure to institute a “litigation hold” is not gross negligence per se, whether the party implemented good document preservation practices is a factor that courts should consider “in the determination of whether discovery sanctions should issue.” Chin, 685 F.3d at 162; see Orbit One, 271 F.R.D. at 441; Neverson–Young v. BlackRock, Inc., No. 09–CV–6716, 2011 WL 3585961, at *3 (S.D.N.Y. Aug. 11, 2011) (finding plaintiff who donated her laptop “merely negligent” based on the fact that “[i]n contrast to corporate actors ... [plaintiff] is unsophisticated and unaccustomed to the preservation requirements of litigation.”). Part III: Relevance to Plaintiff's Claims Relevance may be assumed where the breaching party acted in bad faith or with gross negligence. Neverson–Young, 2011 WL 3585961 at *2; Arista Records LLC v. Usenet.com, Inc., 608 F.Supp.2d 409, 439 (S.D.N.Y.2009) (finding that the “missing documents [were] clearly critical to plaintiff's claims,” and imposing sanctions for spoliation because “defendants acted in bad faith in destroying the documents.” “[S]uch improper conduct alone is sufficient to support a finding that the documents were unfavorable to” defendants); but see Orbit One, 271 F.R.D. at 441 (refusing to presume relevance where the evidence was merely destroyed due to the party's failure to abide by recommended preservation practices). However, where the spoliating party has acted only negligently, the moving party must make a showing that the lost materials were relevant. In re Pfizer, 288 F.R.D. at 315; Harakabi, 275 F.R .D. at 419–20. A party may establish relevance by “ ‘adducing sufficient evidence from which a reasonable trier of fact could infer that the destroyed or unavailable evidence would have been of the nature alleged by the party affected by its destruction.’ “ Harakabi, 275 F.R.D. at 420 (quoting Residential Funding Corp ., 306 F.3d at 109) (internal alterations omitted); see Singh v. Penske Truck Leasing Co., L.P., No. 13 CIV. 1860, 2015 WL 802994, at *7 (S.D.N.Y. Feb. 26, 2015) (“[S]ome extrinsic evidence demonstrating that a reasonable trier of fact could find that the missing evidence would support [plaintiffs'] claims is necessary.”) (internal quotations and citation omitted); Arista Records LLC, 608 F.Supp.2d at 439 (S.D.N.Y.2009) (“[W]hen the destruction of evidence is negligent, relevance must be proven through extrinsic evidence by the party seeking sanctions.”) *10 “Courts must take care not to hold the prejudiced party to too strict a standard of proof regarding the likely contents of the destroyed or unavailable evidence because doing so would subvert the purposes of the adverse inference, and would allow parties who have destroyed evidence to profit from that destruction.” Residential Funding Corp., 306 F.3d at 109 (internal alterations and citations omitted); accord Slovin v. Target Corp., No. 12–CV–863, 2013 WL 840865, at *5 (S.D.N.Y. March 7, 2013). As such, “it is not incumbent upon the plaintiff to show that specific documents were lost ... [rather it] would be enough [for plaintiff] to demonstrate that certain types of relevant documents existed and that they were necessarily destroyed [.]” Treppel v. Biovail Corp ., 233 F.R.D. 363, 372 (S.D.N.Y.2006); see, e.g., Heng Chan v. Triple 8 Palace, Inc., No. 203 CIV 6048, 2005 WL 1925579, at *8–9 (S.D.N.Y. Aug. 11, 2005) (relevance of spoliated employment and business records could be inferred from other documentary and testamentary evidence of defendant's business practices); Zubulake V, 229 F.R.D. at 427–29 (relevance of deleted e-mails inferred from other e-mails that had been recovered and eventually produced). Further, where the missing information has been obtained from other sources, courts have been reluctant to find that the moving party has suffered prejudice. See Field Day, LLC v. County of Suffolk, No. 04–2202, 2010 WL 1286622, at *14 (E.D.N.Y. Mar. 25, 2010) (“[I]t is unclear that Plaintiffs suffered any prejudice as destroyed documents apparently have been otherwise obtained.”) (citing Pension Comm., 685 F.Supp.2d at 478 (“While many of these documents may be relevant, the Citco Defendants suffered no prejudice because all were eventually obtained from other sources.”)). C. Discussion 1. Evidence Lost or Destroyed a. Loss of Go Daddy Emails Since approximately 2006, Exeter utilized Go Daddy[11] as its email service provider. See Transcript of the Jan. 17, 2013 Deposition of Linda Haltman (“L. Haltman Dep. Tr.”), attached as Ex. 24 to the Affidavit of John Roesser in support of Pl.'s Motion for Sanctions and other Relief (“Roesser Aff.”) [DE 95], at 99–100. Pursuant to its email retention policy, Go Daddy had the ability to restore emails stored on its servers for only 30 days. If a client needs emails retained for a longer period of time, it is the client's responsibility to archive those emails. Roesser Aff., Ex. 25. Plaintiff contends that this short retention period, coupled with the fact that no representative from Exeter ever instructed Go Daddy to suspend its standard deletion policy, Roesser Aff. ¶ 3, resulted in the “routine deletion of emails” by Go Daddy. See Pl.'s Mem. at 19. The Haltman Defendants' maintain that: (1) prior to receving the September 4,2012 email from Go Daddy outlining Go Daddy's retention policy, Linda Haltman assumed that Go Daddy retained emails indefinitely, Haltman Defs.' Mem. at 19; Roesser Aff., Ex. 25, L. Haltman Dep. Tr. at 108–09; (2) Linda Haltman never deleted Exeter-related emails from her computer, L. Haltman Dep. Tr. at 139–40; (3) during the month of January 2013, Linda Haltman logged on to Go Daddy and discovered that “all of Exeter's emails were preserved on the website.” Haltman Defs.' Mem. at 20; and (4) Defendant Michael Haltman was not an officer or director of Exeter, see id. at 9, and cannot therefore be held individually accountable for any preservation failures. Even if Michael Haltman were found to be an officer or director, the Haltman Defendants argue that sanctions could not be imposed unless his actions or inaction led to a loss of evidence. Id. at 10. *11 Despite the Haltman Defendants' position that all of the Go Daddy emails were preserved on Go Daddy's website, see id. at 20; L. Haltman Dep. Tr. at 140, 146, this blanket assertion overlooks an important distinction between incoming versus outgoing emails—a distinction which was confirmed by Defendant Linda Haltman both in a September 27, 2012 email to her then counsel, Avrum Rosen, as well as in her January 17, 2013 deposition testimony. See Declaration of John Roesser in Further Support of Pl.'s Mot. for Sanctions and other Relief (“Roesser Decl.”) [DE 142], Ex. 2; L. Haltman Dep. Tr. at 141. In her September 27, 2012 email, Defendant Linda Haltman stated that “even though I checked with Go Daddy [see Roesser Aff., Ex. 25] my email carrier and thought I checked myself it appears that any incoming emails to me are only saved for a short period of time but the outgoing emails go back to 2008 [.]” (emphasis supplied). During her January 17, 2013 deposition, Linda Haltman stated that “I went on [Go Daddy's] web-based browser, and all of the emails I wrote are preserved on there.” (emphasis added). L. Haltman Dep. Tr. at 141. This short retention period was confirmed by Go Daddy. In response to a query by Defendant Linda Haltman asking how long emails are maintained and any procedure for recovering old emails, Roesser Aff., Ex. 25, Go Daddy responded that they could “only provide the ability to restore emails saved on our mail servers for 30 days[.]” Id. Though the parties are in clear disagreement as to whether all of the Go Daddy emails have remained intact, in light of the above facts, it is clear that incoming emails which were initially stored on the Go Daddy server were lost or destroyed through the functioning of Go Daddy's standard deletion policy. b. Loss of Iron Mountain Back–Up Files Beginning in 1998, Exeter utilized the services of Iron Mountain[12] to provide a back-up system for its computer hard drive. L. Haltman Dep. Tr. at 112. According to Defendant Linda Haltman, there was never any interruption in Iron Mountain's back-up services with respect to Exeter's computer. Id. at 113. During a telephone call with Iron Mountain in January 2013, in which Plaintiff's counsel and Defendant Linda Haltman participated, Iron Mountain stated that “pursuant to its standard deletion policies, only the last 10 back-ups were preserved.” Roesser Aff. ¶ 4. In addition, Iron Mountain confirmed that no representative from Exeter “had requested any changes to Iron Mountain's standard deletion policy and that no back-ups were available prior to 2013.” Id. Plaintiff therefore argues that due to Defedants' inaction, Iron Mountain continued to overwrite the back-up copies of the Exeter computer's hard drive, thus resulting in a loss of evidence. See Pl.'s Mem. at 19. The Haltman Defendants assert that Defendant Linda Haltman's erroneous belief regarding Iron Mountain's preservation policies cannot support an imposition of sanctions because Plaintiff has not established that Defendant Linda Haltman's “misapprehension resulted in the loss or destruction of any relevant evidence [.]” Haltman Defs.' Mem. at 20.[13] *12 The record demonstrates that Exeter did not maintain back-up tapes locally of the Exter computer's hard drive contents. L. Haltman Dep. Tr. at 124. In addition, Defendant Linda Haltman stated she has not been in contact with Iron Mountain since beginning service with them in 1998, id. at 122, because “[a]s far as I was concerned, there was a very good backup that was being done since it was being backed up every single day.” See Tr. of the Mar. 24, 2014 Deposition of Linda Haltman (“L. Haltman Dep. Tr. II”), attached as Ex. 1 to the Aff. of John Roesser (“Roesser Aff.”) [DE 95] at 135. The Court finds that in light of Iron Mountain's data deletion policy, see Roesser Aff. ¶ 4, coupled with, at a minimum, Defendant Linda Haltman's complete lack of action with respect to discussion of preservation issues with Iron Mountain, Haltman Dep. Tr. at 124, there is a high probability that information was lost or destroyed. c. Destruction of Files From Exeter Computer Since 2009, Defendant Linda Haltman, who functioned as Exeter's President, L. Haltman Dep. Tr. at 11, had exclusive use of Exeter's sole computer. Id. at 73, 80; L. Haltman Dep. Tr. II at 44–45. As President, Linda Haltman also maintained Exeter's books and records using a computer program called QuickBooks. L. Haltman Dep. Tr. II at 106. The QuickBooks program was accessible only from Exeter's office computer to which Defendant Linda Haltman testified that she had sole access. Id. In addition, no hard copy records of Exeter's books were maintained. Id. at 165. The Exeter computer also contained a standard software suite including Microsoft Word, Excel, Outlook Express and Lotus. L. Haltman Dep. Tr. at 73, 80 at 80. Plaintiff asserts that prior to October 2012, Defendant Linda Haltman willfully destroyed evidence on the Exeter computer. Specifically, Plaintiff alleges that Linda Haltman (1) instructed her brother Lawrence Frank to tamper with QuickBooks entries and backdate Exeter's records; and (2) deleted a large amount of data from the Exeter computer's hard drive at approximately the same time that the bankruptcy petition was filed.[14] Pl's. Mem. at 17. In response, the Haltman Defendants argue that: (1) the “tampering” with QuickBooks alleged by Plaintiff was nothing more than Exeter updating its books in accordance with generally accepted accounting principles—in this case through the exercise of writing off uncollectible loans—and therefore there was no alteration, loss or destruction of evidence, Haltman Defs.' Mem at 17–18, and (2) Defendant Linda Haltman did not delete any data from the Exeter computer's hard drive relevant to Exeter's business. Id. at 6–7 .[15] In October 2012, Plaintiff made a forensic copy of the Exeter computer's hard drive. Pl's. Mem. at 7. Shortly thereafter, Plaintiff retained PricewaterhouseCoopers LLP (“PwC”) to perform a forensic analysis on the copy that had been made. Id. at 9. On December 23, 2013 PwC received and began analyzing the copy of the hard drive. Affidavit of Brian T. Fox (“Fox Aff.”) [DE 93] ¶ 5. As a result of its analysis, PwC determined that between January 7, 2004 and October 10, 2012, a total of 64, 084 files and folders were deleted. Fox Aff. ¶ 7. Of these 64,084 files and folders, 46,623 were deleted between January 1, 2011 and October 10, 2012. Id. Of the 46, 623 that were deleted between this timeframe, 21,302 files were either partially or completely overwritten, rendering them unrecoverable. Id. *13 From January 1, 2011 to October 10, 2012, the average number of files deleted per month was 2,119. Id. ¶ 8. However, PwC noted that in September 2011 and November 2011 there was a significant increase in the number of files deleted—20,680 in September 2011 and 10,703 in November 2011. Id. Further, of these 10,703 files, 8,961 files were deleted on a single day, November 21, 2011. Id. In addition, PwC found that 92 QuickBooks-related files were deleted and that of these 92 files, 27 had been deleted on November 21, 2011. Id. ¶ 9. PwC filed a Second Supplemental Affidavit of its employee, forensic computer specialist Brian T. Fox, which provided further context regarding Fox's forensic analysis of the Exeter hard drive. See Second Supplemental Affidavit of Brian T. Fox (“Fox Aff. II”). Specifically, Fox stated that despite the Haltman Defendants' forensic expert's assertion that PwC failed to identify any relevant content being deleted, Fox “assessed the deleted content of the Forensic Hard Drive and identified the files most likely to contain business relevant data files.” Id. ¶ 7. Fox utilized EnCase version 6.19 which “makes an exact duplicate of the selected files.” Id. Further, Fox stated that he did not restore “every potentially relevant deleted file, only those that were most likely data files.” Id. As part of his Suppelemental Affidavit, Fox provided a listing of data files he recovered, a listing of recovered files that were unable to be accessed after restoration as well as a listing of recovered emails and attachments. Id., Ex. A. In addition, Plaintiff provided the Court with selected deleted files as recovered by Fox. See Roesser Decl., Ex. 4. On April 29, 2015, Plaintiff's counsel deposed Leonard Weinstein, the Haltman Defendants' forensic expert. See, e.g., Tr. of the Apr. 29, 2015 Deposition of Leonard Weinstein (“Weinstein Dep. Tr.”), attached as Ex. 6 to the Roesser Decl. [DE 142]. During this deposition, Mr. Weinstein stated that based on his incomplete evaluation of the forensic copy of the Exeter computer's hard drive he “did not determine any data files were deleted.” Weinstein Dep. Tr. at 79.[16]However, Weinstein was unable to state definitively that no data files had been deleted given his incomplete analysis: Q: ... [Y]ou cannot say that on that hard drive there were no data files deleted because you didn't complete your analysis; is that correct? A: I cannot go on record and say it absolutely, no. That's true. Id. Weinstein further opined that folders contained in the Microsoft system as well as QuickBooks files containing actual data would not get deleted by themselves “unless it was infected by a virus or Trojan ... that attached itself to that file and you were cleaning, then it could be deleted.” Id. at 65. In addition, Weinstein stated that if a user performs a program update or cleanup, the files that are deleted consist of “[c]onfiguration files, log files, [and] various Dynamic Link Library files....” Id. at 66. When a user performs a program update, according to Weinstein, “[d]ata files do not get deleted ... And, hence, it stores the—your data intact when you are upgrading or converting or updating.” Id. With respect to “data files” Weinstein was able to state that E-mail files, QuickBooks files ending with a QBB or QBW extension, PDFs and Word documents all constitute data files and therefore would not get deleted as part of an update. Id. at 66–67. *14 Weinstein was also questioned regarding the effect a disc defragmentation would have on both data files and non-data or system files: Q: ... [W]hat's the spectrum of things that disc defragmentation could lead to the automatic deletion of? A: System files, not data files. Q: So again, a disc defragmentation would not lead to deletion of data files? A: That's correct. Id. at 71. In accord with his previous Affidavit,[17] Weinstein confirmed that he believed that any deleted files on the hard drive which he partially analyzed were “due to a hard drive cleanup of temporary files and folders, system cache files and logs and, in addition, the removal of files due to the existence of viruses, Trojans and Malware.” Id. at 72. When asked by Plaintiff's counsel whether any data files had been deleted, Weinstein stated that based upon his “preliminary analysis only”[18] he did not find that any data files had been deleted. Id. at 72–73. However, Weinstein added that if data files, such as QuickBooks QBB or QBW files, had been deleted it would not be “innocuous.” Id. at 78. During her Janauary 17, 2013 deposition, Defendant Linda Haltman testified that she never needed to use an Iron Mountain back-up copy of her hard drive, presumably because the Exeter computer never crashed. She testified to the following: Q: How does it work, if you wanted to access the information that's backed up through Iron Mountain? A: You go on to the program and you hit “restore,” and it restores. In other words, if the computer crashes— Q: Right. A: You hit “restore,” and it brings everything back. Thank God I never had to do that. ... Q: Is there a way to access the data that's saved by Iron Mountain, independent of your computer? A: I don't know because I never tried to. Q: You never accessed Iron Mountain, like through some Internet portal or something like that? A: No. Notwithstanding such deposition testimony, Haltman submitted a March 9, 2015 Affidavit in which she states that: In 2011, Exeter's computer experienced issues, including being infected by a virus on at least one occasion. I do not recall exactly what Exeter ... did to resolve the problems, but it likely involved a disk defragmentation and/or the installation of anti-malware software. In addition, from time to time I changed programs in Exeter's computers ... I also installed updated versions of QuickBooks from time to time. I cannot say that outdated and unnecessary duplicative files were not deleted as a result of these updates. Since Exeter's desktop computer did not have unlimited capacity, I imagine this might have occurred. The deletion of such program files did not result in the destruction of any information that could be deemed arguably relevant to the claims in this action. Affidavit of Linda Haltman (“L. Haltman Aff.”), dated March 9, 2015, ¶ 11 [DE 128]. *15 Even assuming that the Court finds Defendant Linda Haltman's Affidavit credible in light of her earlier deposition testimony, see Martin v. City of New York, 627 F.Supp. 892, 896 (E.D.N.Y.1985) (citing the well settled rule that “a party cannot create a material question of fact simply by contradicting testimony given at a deposition”); Berrios v. Nicholas Zito Racing Stable, Inc., 849 F.Supp.2d 372, 378 (E.D.N.Y.2012) (quoting Trans–Orient Marine Corp. v. Star Trading & Marine, Inc., 925 F.2d 566, 572 (2d Cir.1991)) (“[A] party may not ... create a material issue of fact by submitting an affidavit disputing his own prior sworn testimony.”), and taking into account both PwC's analysis and Leonard Weinstein's deposition testimony, along with Plaintiff's submission of examples of deleted data files which were recovered by PwC, see Roesser Decl., Ex. 4, the Court finds that data files were, in fact, deleted and that Defendant Linda Haltman's conduct was a primary factor with respect to the loss of that data. Though her Affidavit asserts various rationales for any deletion of files, in light of Leonard Weinstein's testimony, most of the reasons she proffers simply do not provide a credible basis from which to accept that the processes utilized (i.e., disk defragmentation, installation of anti-malware software, changing programs, or installing updated versions of programs) led to the inadvertent deletion of data files—the evidence here is to the contrary. With respect to the possibility that in 2011 the Exeter computer was infected with a virus or Trojan which resulted in the inadvertent deletion of data, the record is at best ambiguous. During PwC's forensic analysis, no information was adduced to support a claim that any of the data deletion resulted from a virus or Trojan infection. See e.g., Fox Aff.; Fox Aff. II. Nevertheless, during Weinstein's deposition testimony, the following exchange occurred: Q: What evidence did you see of viruses, Trojans and/or Malware? A: I discovered that there were items pertaining to specific Trojans and viruses, and, therefore, concluded that some of the items were removed because of them. Q: Do you recall what Trojans and viruses those were? A: Not offhand. Q: Is there any way to, when you are looking at a forensic copy like this, to date these Trojans and viruses and when they came on to the system? A: Yes. That's part fo the forensic anaylsis. Q: And can you date when they were addressed or fixed or whatever you do? A: Yes. You can determine modification, last accessed. In light of Weinstein's testimony here that some items he found during his partial analysis were removed because of a potential virus or Trojan infection, there is at least a rationale for some of the data files having been deleted. However, since Weinstein conducted only a partial analysis of the hard drive as opposed to PwC's complete analysis (which did not indicate the presence of a virus, Trojan or Malware), the Court finds sufficient factual support for the conclusion that any such infection did not account for the deletion of all of the data files from the Exeter computer's hard drive. *16 In addition, the analysis done by PwC indisputably illustrated a spike in the number of files deleted in September 2011 and November 2011—the period directly preceding and coinciding with the filing of Exter's involuntary bankruptcy petition which was ultimately filed on November 9, 2011. See Compl. ¶ 11 [DE 3]. Further, PwC identified 21 QuickBooks files that were also deleted on Novemeber 21, 2011–shortly after the filing of the bankruptcy petition. See Fox Aff., ¶¶ 8–9. When this forensic evidence is viewed in conjunction with Weinstein's testimony and Plaintiff's submission-giving illustrative examples of the files that were recovered from the forensic copy made of the Exeter computer's hard drive-this Court cannot come to any conclusion other than the fact that Defendant Linda Haltman's actions and conduct resulted in the deletion of most, if not all, of the data which was deleted from Exeter's computer. Having found that data was lost or destroyed with respect to the Go Daddy emails, the Iron Mountain back-ups and the data from Exeter's computer, the Court now turns its attention to the question whether Plaintiff has met its burden pursuant to the three-part test for spoliation as enumerated in Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99 (2d Cir.2002).[19] 2. Duty to Preserve The Second Circuit has determined that “[t]he obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” Fujitsu, 247 F .3d at 436 (citing Kronisch, 150 F.3d at 126). Pursuant to this obligation, “anyone who anticipates being a party or is a party to a lawsuit must not destroy unique, relevant evidence that might be useful to an adversary.” Zubulake IV, 220 F.R.D. at 217. On December 7, 2009, Exter Holdings, Ltd. was sued by the Lawrences, a group representing some of its non-bank money lenders. Roesser Aff., Ex. 10. The lawsuit sought to recover payment of multiple promissory notes totaling over $2 million. Id. In conjunction with that litigation, the Lawrences issued a subpoena to Exeter on November 9, 2010, seeking “testimony and production of documents concerning [Exeter's] assets, including loans made by [Exeter].” Id., Ex. 11. On January 14, 2011, Exeter was sued by Leslie and Peter Whitney who were additional non-bank lenders of Exeter. Roesser Aff., Ex. 13. That litigation also involved questions regarding Exeter's finances, including its books and records. Id., Ex.14. Exeter, as well as one of its property corporations and Linda and Michael Haltman, were sued by the Phlegars on May 2, 2011. Id., Ex. 15. That lawsuit alleged significant defects in workmanship on a residential property which was sold to the Phlegars. Id. The Phlegars asserted multiple causes of action, including breach of express limited warranty, breach of contract, negligent supervision, fraudulent misrepresentation, fraud in the inducement, failure to disclose and negligence. Id. As part of their fraudulent inducement claim, the Phlegars alleged that Exeter represented itself to be a “financially secure, viable, sound and commercially responsible entity....” Id. Again, the overall health of Exeter's finances was germane to that litigation as well. *17 On November 9, 2011, Exeter filed its involuntary bankruptcy petition. See Compl. ¶ 11 [DE 3]. During the early stages of the bankruptcy proceeding, it became apparent that Exeter's books and records would be necessary and relevant to Exeter's petition. See Roesser Aff., Ex. 19 (transcript of Section 341 meeting of Exeter's creditors). Since Exeter had been involved in litigation since December 2009, coupled with the fact that at least some of the pending lawsuits involved the disclosure of Exeter's books, records and financial documents, Defendants knew or should have known that these documents could be relevant to future litigation and Exeter's principals should have taken steps to ensure that an adequate preservation system was put in place in order to safeguard this discoverable information from any inadvertant or deliberate loss or destruction. See Zubulake IV, 220 F.R.D. at 217; Orbit One Commc'ns, Inc. v. Numerex Corp., 271 F.R.D. 429, 436 (S.D.N.Y.2010); Toussie, 2007 WL 4565160, at *6. However, even assuming arguendo that the initial filing of the Lawrence lawsuit did not trigger the duty to preserve, the Lawrences' service of a subpoena duces tecum upon Exeter on November 9, 2010 unequivocally placed Exeter and its principals on notice that it was both the subject of a pending lawsuit and that its adversary was requesting specific documentary evidence. See Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68, 73 (S.D.N.Y.1991) (“[A] party is on notice [of its duty to preserve evidence] once it has received a discovery request.”). Therefore, a litigation hold should have been put in place at that time. In any event, the latest point in time that a duty to preserve arose was November 9, 2011–the date that the bankruptcy petition was filed.[20] Given the above chronology, which establishes that Exeter had been involved in overlapping litgation with creditors spanning almost two full years prior to its own bankruptcy filing, this Court finds that Exeter had a duty to preserve documents and potential evidence as of December 2009—the date it initially was put on notice of the Lawrence litigation. In order to meet its preservation obligations as of that date, Exeter should have suspended “its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents”-its own documents as well as those serviced by its vendors. Orbit One Commc'ns, Inc., 271 F.R.D. at 437 (internal citation omitted). In addition to such a “litigation hold,” Exeter also had an affirmative duty to ensure “all potentially relevant evidence [was] retained.” Id.; see R.F.M.A.S ., Inc. v. So, 271 F.R.D. 13, 24 (S.D.N.Y.2010)adopted by 271 F.R.D. 55 (S.D.N.Y.2010) (“To fulfill this preservation obligation, a litigant must take affirmative steps to prevent inadvertent spoliation.”). Further, evidence that must be preserved includes documents, electronically stored information, and physical evidence. R.F.M.A.S., Inc., 271 F.R.D. at 23. *18 Though the duty to preserve “runs first to counsel, who has a duty to advise his client of the type of information potentially relevant to the lawsuit and of the necessity of preventing its destruction,” Orbit One Commc'ns, Inc., 271 F.R.D. at 437 (internal quotations and citations omitted), where a business, as opposed to an individual, is under a duty to preserve, its corporate officers and managers have an affirmative responsibility to communicate the preservation obligation to its employees. See id. at 438; Turner, 142 F.R.D. at 73 (“The obligation to retain discoverable materials is an affirmative one; it requires that the agency or corporate officers having notice of discovery obligations communicate those obligations to employees in possession of discoverable materials.”).[21] Defendant Linda Haltman, Exeter's President, was responsible for Exeter's record-keeping, see Roesser Aff., Ex. 14 at 16. She had an obligation to institute a formal “litigation hold” and preservation policy as early as December 2009. However, it is clear from the foregoing facts that such action was never undertaken and, as a result, Go Daddy emails, Iron Mountain back-ups and Exeter computer files were deleted. This fact is especially troubling in light of Linda Haltman's deposition testimony in which the following exchange took place concerning the state of her knowledge on or about December 2009: Q: Were you ever instructed to preserve documents? A: I just assumed that I would have to preserve documents. Q: So you had an understanding that you would preserve documents? A: Yes. Q: Regardless of counsel's advice, that was your understanding? A: Yes. Tr. of the Apr. 29, 2015 Deposition of Linda Haltman (“L. Haltman Dep. Tr. III”), attached as Ex. 1 to the Roesser Decl. at 426. [DE 142]. Linda Haltman's own deposition testimony illustrates that regardless of any advice she may have received from counsel, she—as Exeter's President-was acutely aware as early as December 2009 that she had a duty to preserve evidence. Nevertheless, she has unambiguously admitted that no preservation system was ever put into place. Likewise, none of the electronically stored information, both locally as well as the documents/information stored for Exeter by third-party vendors, was properly secured.[22] Having found that Exeter, acting through its officers and directors, did in fact have a duty to preserve evidence that was subsequently lost or destroyed, the Court turns to the second phase of the inquiry—whether Defendants acted with a culpable state of mind. 3. Culpable State of Mind Though this is not a case involving a multi-national corporation with a large legal department and thousands of employees, neither is it a case involving uneducated inviduals having no business acumen. Exeter, a family-run money-lending business and closely held corporation, was started by Arnold Frank in the mid–1980s, A. Frank Dep. Tr. at 15, 29; L. Haltman Dep. Tr. at 13. According to Plaintiff's Complaint, Exeter's financial statements as of September 30, 2006 indicated that Exeter had maintained construction loan receivables secured by first mortgages to 27 property corporations in the amount of $13,085,919.00. Compl. ¶ 92 [DE 3]. *19 Exeter's Chairman, Defendant Arnold Frank, graduated from City College of New York (“CCNY”) with a Bachelor of Science degree in Mechanical Engineering in 1951. He received a Master of Science degree in Mechanical Engineering from CCNY approximately four to five years later. A. Frank Dep. Tr. at 33. In addition, Arnold Frank is a licensed professional engineer. Id. at 34. Defendant Linda Haltman, Exeter's President, who oversaw Exeter's day-to-day operations, is far from unsophisticated or lacking in business expertise. She herself testified that she graduated from Brandeis University in 1983 and then attended New York University's Stern School of Business. L. Haltman Dep. Tr. at 8–9. After graduating from business school, Linda Haltman went to work for Citibank and attended Citibank's investment banking training program. Id. at 9–10. After working at Citibank for a year, she began to work for Exeter. Id. at 10. Further, Defendant Michael Haltman, who by all accounts functioned as a Vice–President of Exeter or an “executive at large,”[23] was also well-educated. Michael Haltman graduated from SUNY Albany with a Bachelor of Science degree with a concentration in Economics. Tr. of the Mar. 25, 2014 Deposition of Michael Haltman (“M. Haltman Dep. Tr.”), attached as Ex. 30 to the Roesser Aff. [DE 95] at 28. A fews years after obtaining his Bachelor's degree, he returned to SUNY Albany and obtained a Masters in Business Adminstration (“MBA”) with a concentration in finance. Id. After receiving his MBA, he worked for Shearson Lehman Brothers in its fixed income group. Id. at 29. Exeter, acting through its officers, was clearly a sophisticated closely held corporation run by both its founder, Arnold Frank, and its President, Linda Haltman. Its core business involved the lending of hundreds of thousands (and at times millions of dollars) in funding. It is inconceivable that a business of this size and scope, comprised of executive officers having substantial backgrounds in business and management, simply had no conception of its responsibility to ensure proper document preservation in the event of litigation. Defendant Linda Haltman's own testimony reveals just the opposite. L. Haltman Dep. Tr. III at 426. “In the discovery context, negligence is a failure to conform to the standard of what a party must do to meet its obligation to participate meaningfully and fairly in the discovery phase of a judicial proceeding[,]” In re Pfizer Secs. Litig., 288 F.R.D. at 314 (internal quotations omitted), while “[g]ross negligence has been described as a failure to exercise even that care which a careless person would use.” Williams, 2011 WL 5024280, at *7 (internal quotations and citation omitted). In this Circuit, negligence alone is a “sufficiently culpable state of mind for spoliation.” See Residential Fund Corp., 306 F.3d at 108. However, where a party's misconduct is shown to be willful or done with bad faith, imposition of the harshest sanctions is appropriate to remedy the wrongdoing. Salahuddin v. Harris, 782 F.2d 1127, 1132 (2d Cir.1986). *20 As early as December 2009 (the date the first non-lender lawsuit was filed against Exeter) and as late as October 2012 (when the Exeter computer's hard drive was turned over for forensic copying), the record is void of any affirmative steps taken by Defendant Arnold Frank, Defendant Linda Haltman or any other officer or director of Exeter to implement a formal “litigation hold” or to take steps to ensure that both documents and ESI were preserved. See L. Haltman Dep. Tr. III at 426 (indicating Defendant Linda Haltman recognized she had a duty to preserve documents as early as December 2009); L. Haltman Aff. ¶ 4 (acknowledging that no memo was ever circulated informing employees of a “litigation hold” or otherwise alerting Exeter employees to presesrve information). Indeed, the record establishes that because of a complete lack of action on the part of Exeter's principals, neither of Exeter's third-party ESI service providers were timely notified of a need to suspend their ordinary document/ESI destruction protocols. Defendant Linda Haltman did not even make an inquiry on this issue to Go Daddy until September 2012–approximately ten months after Exeter filed for bankruptcy—at which time she was notified of Go Daddy's thirty-day retention policy. Roesser Aff., Ex. 25. Iron Mountain was likewise never contacted with regard to preserving information. L. Haltman Dep. Tr. at 122. In addition, Linda Haltman's conduct with respect to the deletion of data from the Exeter computer's hard drive is equally disconcerting. Even assuming that a virus or Trojan was the culprit for some of the destroyed data, the Court is not convinced that either of these two potential occurrences was the only such cause. The record contains a significant amount of information, as enumerated in the first Fox Affidavit submitted by PwC (as well as PwC's Second Supplemental Affidavit and accompanying list of deleted data files), which, at the very least, creates a strong inference that the majority of the deletion activity was done with the purposeful intent to ensure that the data would be destroyed. See e.g., Fox Aff.; Fox Aff. II. The Court acknowledges that measuring the level of culpability in cases of alleged spoliation involves a fluid as opposed to a rigid inquiry where the continuum of fault ranges from innocence through varying degrees of negligence and culminates with intentionality. Reilly, 181 F.3d at 267. After reviewing the underlying facts with regard to the loss of Go Daddy emails, the loss of back-ups from Iron Mountain and the deletion of data from the Exeter computer, this Court finds that, on balance, Defendants' conduct was intentional and done in bad faith—especially with respect to the destruction of data from Exeter's own computer. Having determined that Defendants' conduct was intentional with respect to its preservation obligations, the Court turns it attention to the relevance of the evidence at issue. 4. Relevance *21 “It is a well-established and long-standing principle of law that a party's intentional destruction of evidence relevant to proof of an issue at trial can support an inference that the evidence would have been unfavorable to the party responsible for its destruction.” Kronisch, 150 F.3d at 126. In cases where a court chooses to disregard the presumption of relevance, it generally requires the moving party to come forward with extrinsic evidence that would support the party's claims. See Arista Records LLC, 608 F.Supp.2d at 439; Gutman, 2008 WL 4682208, at *7 (“[T]he burden falls on the prejudiced party to produce some evidence suggesting that a document or documents relevant to substantiating his claim would have been included among the destroyed files.”) (internal quotations and citation omitted). Having extensively reviewed the parties' submissions outlining the underlying conduct at issue in this case and having determined that the level of culpability was predominantly intentional or otherwise done in bad faith, this Court finds that the presumption of relevance is warranted; therefore, the Court will not to require Plaintiff to make such a showing through extrinsic evidence. Nevertheless, even if the application of this presumption were disregarded, the Court points out that at least with respect to the deleted computer data files, Plaintiff has produced documents from some of the recovered data files which provide the Court with a snapshot as to the character and substance of documents that were unable to be regenerated. See Roesser Decl., Ex. 4; Treppel, 233 F.R.D. at 372 (“[I]t is not incumbent upon the plaintiff to show that specific documents were lost ... [rather it] would be enough [for plaintiff] to demonstrate that certain types of relevant documents existed and that they were necessarily destroyed[.]”); Heng Chan, 2005 WL 1925579, at *8–9; Zubulake V, 229 F.R.D. at 427–29. The recovered data that Plaintiff has produced includes: correspondence and draft letters regarding Exeter, tax, asset and accounting statements, spreadsheets and documents relating to outstanding mortgages and/or pertaining to Exeter's liabilities, as well contractual documents. Roesser Decl., Ex 4. Such documents, in the Court's view, have substantial relevance to Plaintiff's claims. Having determined that Plaintiff has met all three prongs of the test for spoliation, the Court must analyze whether sanctions are appropriate, and, if so, the level of sanction that should be imposed. 5. Imposition of Sanctions A district court has wide latitude in its decision-making as to the imposition of sanctions “whether exercising its inherent power, or acting pursuant to Rule 37.” Gutman, 2008 WL 468208, at *12; West, 167 F.3d at 779. When contemplating what level of sanctions is most appropriate, a court should be guided by the entire record that exists. Gutman, 2008 WL 468208, at *11. When reviewing the record, a court should weigh the following factors: (a) willfulness or bad faith on the part of the noncompliant party; (b) the history, if any, of non-compliance; (c) the effectiveness of lesser sanctions; (d) whether the noncompliant party had been warned about the possibility of sanctions; (e) the client's complicity; and (f) prejudice to the moving party. See Am. Cash Card Corp., v. AT & T Corp., 184 F.R.D. 521, 524 (S.D.N.Y.1999). In addition, where a case involves sanctions sought for spoliation of evidence, a court should also consider the “prophylactic, punitive, and remedial rationales underlying the spoliation doctrine. West, 167 F.3d at 779. *22 “In addition to outright dismissal, many other sanctions, such as an adverse jury inference and additional discovery, are available to remedy acts of spoliation,” Zimmerman, 2011 WL 1429221, at *30, and generally, a court will impose the draconian sanction of dismissal or default judgment only in extreme cases, and then, only after consideration of alternative, less drastic remedies. West, 167 F.3d at 779; Baez v. Majuri No. CV–10–3038, 2013 WL 4434444, at *2 (E.D.N.Y. July 29, 2013); Alexander v. Boscaino Auto Collision, No. CV–11–3526, 2012 WL 4867507 (E.D.N.Y. Aug. 6, 2012). Further, a sanction terminating an action “typically may not be imposed unless the party has been specifically warned that violation of the court's order could lead to dismissal.” Alexander, 2012 WL 4867507, at *1; Baez, 2013 WL 4434444, at *2. Indeed, the sanction of a default judgment should not be imposed lightly, especially in cases where alternative remedies are sufficient to address the spoliation. See Kyoei Fire & Marine Ins. Co. v. M/V Mar. Antalya, 248 F.R.D. 126, 145 (S.D.N.Y.2007). Even a sanction in the form of an adverse inference instruction is still “an extreme sanction and should not be imposed lightly.” Treppel, 249 F.R.D. at 120; see Zubulake IV, 220 F.R.D. at 219 (“In practice, an adverse inference instruction often ends litigation—it is too difficult a hurdle for the spoliator to overcome.”). When applying the above principles to the facts and circumstances of the instant case as to the preservation of evidence, this Court finds that on balance, the imposition of an adverse inference—which would require the jury to be instructed that it may infer that the spoliated evidence was largely damaging to defendants—is the appropriate remedy for Defendants' intentional conduct in failing to institute a proper “litigation hold,” flouting its preservation obligations—both with respect to its own locally-held data as well as data stored by its third-party vendors—and ultimately with respect to Linda Haltman's knowing and intentional deletion of evidence from the Exeter computer's hard drive. On the one hand, Plaintiff contends that a default judgment is the only appropriate remedy under the circumstances since there is “simply no way for Plaintiff to reconstruct Exeter's true financial picture,” Pl.'s Mem at 21. On the other hand, Plaintiff argues in the alternative for a finding that the conduct at issue warrants an adverse inference. Id. at 22. Given the totality of the record as it currently exists, this Court is not convinced that a default judgment is the only appropriate sanction. The Court acknowledges that default judgments have been granted in cases involving discovery abuses as Plaintiff's counsel points out in his Memorandum. See e.g., Pl.'s Mem. at 23. However, these cases are distinguishable on the grounds that they involved: (1) multiple violations of discovery orders; (2) warnings given by the court at least once and in many instances multiple times that any further violations would lead to a default judgment; and (3) the failure of lesser sanctions. See Alexander, 2012 WL 4867507, at *1 (imposing a terminating sanction only after plaintiff twice failed to appear for a court-ordered deposition, was warned that further failures would result in dismissal and lesser monetary sanctions imposed proved inadequate); Baez, 2013 WL 4434444, at *2 (terminating sanction utilized only after plaintiff repeatedly failed to attend a court-ordered medical examination, refused to appear after being ordered to show cause for such noncompliance and had been warned that continued failures to comply would lead to dismissal); Microsoft Corp. v. Computer Care Ctr., Inc., No. 06–CV–1429, 2008 WL 4179653, at *5–6 (E.D.N.Y. Sept. 10, 2008) (utilizing the sanction of default judgment where defendants willfully disregarded multiple court orders to provide discovery, were forewarned that continued noncompliance would result in a default judgment and where “[l]ess harsh sanctions ... ha[d] already proven fruitless”); see also Gutman, 2008 WL 468208, at *12 (default judgment imposed in context of spoliation of evidence but only after the previous imposition of “lesser sanctions on the responsible party for other discovery misconduct”); Am. Cash Card Corp., 184 F.R.D. at 524–25 (levying default judgment only after third-party defendant willfully disobeyed five discovery orders, failure of lesser sanctions to deter continued disobedience and having provided four previous warnings that further noncompliance would result in a default judgment); Bambu Sales, 58 F.3d at 852–53 (awarding a default judgment only after defendant's conscious noncompliance of discovery order for more than five months coupled with prior adequate notice that such a sanction could be imposed). *23 The instant case is not a model for the efficient administration of the discovery process. Linda Haltman has herself been sanctioned previously.[24] However, this is also not a case where Defendants have failed to comply with multiple discovery orders of this Court, have failed to heed prior lesser sanctions that have been levied or have disregarded prior warnings that continued noncompliance would result in a default judgment. While it is true that this Court was forced to sanction Defendant Linda Haltman for her failure to heed the Court's warning about her improper conduct at depositions, see Minute Order, DE 82, “[s]tanding alone, a single pretrial violation ... would not ordinarily result in an imposition of a sanction of such finality as ... entering a judgment by default. Microsoft Corp., 2008 WL 4179653, at *4 (internal quotations and citations omitted). Moreover, the conduct for which the Defendants are being sanctioned occurred prior to depositions being commenced in this case. Mindful of the Court's “wide latitude” in determining whether and to what extent to impose sanctions, West, 167 F.3d at 779, having reviewed the record at length in conjunction with applicable case law, and heeding the rationales underpinning the doctrine of spoliation, this Court finds that imposing the sanction of an adverse inference is an adequate remedy given Defendants' misconduct in this case. The Court therefore regrettably but respectfully recommends to Judge Seybert that Plaintiff's motion for sanctions based on Defendants' spoliation of evidence be GRANTED and that an adverse inference be imposed at trial. 6. Attorney's Fees and Costs Plaintiff also seeks an award of attorney's fees and costs for “bringing both the instant motion, as well as the fees and costs incurred investigating Defendants' spoliation.” Pl.'s Mem. at 25. Plaintiff's two rationales for seeking such an award are based upon the proposition that attorney's fees may be “appropriate to punish the offending party for its actions or to deter [the] litigant's conduct[,]” Zimmerman, 2011 WL 1429221, at *34, and that an award of “monetary sanctions serves the remedial purpose of compensating [the movant] for the reasonable costs it incurred in bringing [a motion for sanctions].” Pension Comm. of the Univ. of Montreal Pension Plan, 685 F.Supp.2d at 471.[25] “A district court has broad discretion to determine an appropriate sanction for discovery violations based on the facts of the particular case. R.F.M.A.S., 271 F.R.D. at 24; see Ritchie Risk–Linked Strategies Trading (Ireland), Ltd. v. Coventry First LLC, 280 F.R.D. 147, 156 (S.D.N.Y.2012) (noting that a district court is vested with “broad discretion to determine the nature of any sanction that should be imposed ... based on all the facts of the case.”). Notwithstanding this broad discretion, Rule 37(b) (2)(C) of the Federal Rules of Civil Procedure provides that attorney's fees and reasonable expenses “must” be ordered in cases involving discovery abuses unless the disobedient party can make a showing that its failure to comply was “substantially justified” or that “other circumstances make an award of expenses unjust.” FED. R. CIV. P. 37(b)(2)(C). In addition, though the Second Circuit has not found that such an award of expenses is mandatory, neither have they been silent on this issue explaining that “[t]he use of the word ‘shall’ certainly suggests that an award of expenses is mandatory....” Novak v. Wolpoff & Abramson LLP, 536 F.3d 175, 178 (2d Cir.2008). In addition, district courts within this circuit have all but determined that such an award is, in fact, mandatory. See Gutman, 2008 WL 4682208, at *13; Silva v. Cofresi, No. 13 Civ. 3200, 2014 WL 3809095, at *5 (S.D.N.Y. Aug. 1, 2014) (finding cost-shifting mandatory under Rule 37); Farmer v. Hyde Your Eyes Optical, Inc., No. 13–CV–6653, 2015 WL 2250592, at *10 (S.D.N.Y. May 13, 2015) (“fee-shifting sanctions are not only appropriate, they are mandatory under Rule 37....”); Linde v. Arab Bank, PLC, 269 F.R.D. 186, 204–05 (E.D.N.Y.2010) (citing with approval Novak and recognizing that the burden is on the disobedient party to provide evidence that one of the Rule's two exceptions are met). *24 Notwithstanding the above, Plaintiff has not provided this Court with any information upon which an award of reasonable fees and costs could be calculated. As such, if Plaintiff chooses to pursue an award of reasonable fees and costs based on its underlying Motion for Sanctions, Plaintiff needs to make a proper fee application pursuant to Rule 37. Such an application must be accompanied by a declaration of counsel attaching and explaining contemporaneous time and expense records with appropriate supporting documentation as well as legal support for the amounts sought. In light of these circumstances, this Court is not in a position to make any recommendation to Judge Seybert at this time as to attorney's fees and costs. V. CONCLUSION For the foregoing reasons, this Court respectfully recommends to Judge Seybert that Plaintiff's Motion for Sanctions for Spoliation of Evidence be GRANTED in part, DENIED in part and DEFERRED in part. Specifically: (a) Plaintiff's request for the imposition of an adverse inference at trial should be GRANTED; (b) Plaintiff's request for entry of a default judgment against the Defendants should be DENIED; (c) Plaintiff's request for attorney's fees and costs should be DEFERRED for the reasons stated in this Report and Recommendation. VI. OBJECTIONS Pursuant to 28 U.S.C. § 636(b)(1)(c) and Rule 72 of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report and Recommendation to file written objections. Such objections shall be filed with the Clerk of the Court via ECF. A courtesy copy of any objections filed is to be sent to the Chambers of the Honorable Joanna Seybert, and to the Chambers of the undersigned. Any requests for an extension of time for filing objections must be directed to Judge Seybert prior to the expiration of the fourteen (14) day period for filing objections. Failure to file objections will result in a waiver of those objections for purposes of appeal. Thomas v. Arn, 474 U.S. 140, 155 (1985); Beverly v. Walker, 118 F.3d 900, 901 (2d Cir.1997), cert. denied, 522 U.S. 883 (1997); Savoie v. Merchants Bank, 84 F.3d 52, 60 (2d Cir.1996). SO ORDERED. Footnotes [1] This action was commenced on October 23, 2012 by the Official Committee of Unsecured Creditors of Exeter Holding Ltd. (the “Committee”) in the context of a bankruptcy proceeding in the Eastern District of New York. See DE 4. On May 20, 2013, the Debtor filed an amended liquidation plan. Id. The Plan Administration Agreement was filed on June 21, 2013. This Agreement was entered by United States Bankruptcy Judge Alan S. Trust on July 8, 2013 and, as part of its terms, the Committee was dissolved and all causes of action, including those alleged in the adversarial proceeding (see Complaint), were transferred to the Plan Administrator. Thus, the Plan Administrator—Gary Herbst—became the Plaintiff in the instant adversarial proceeding and is the current party in interest. Id. [2] The term “insider” with respect to a corporate entity is defined in Section 101(31)(B) of the Bankruptcy Code as the director of the debtor, officer of the debtor, person in control of the debtor, partnership in which the debtor is a general partner, general partner of the debtor or relative of a general partner, director, officer, or person in control of the debtor. 11 U.S.C. § 101(31)(B) (2015). In addition, the term “relative” is defined as an “individual related by affinity or consanguinity within the third degree as determined by the common law, or individual in a step or adoptive relationship within such third degree.” Id. at § 101(45). [3] Linda Haltman, Michael Haltman, Arnold Frank, Bruce Frank, Larry Frank are collectively defined as the “Alter Ego Insiders.” See Compl. ¶ 311. [4] The $10 Million Write–Off Beneficiaries, the Fraudulent Transfer Insider Recipients, the Fraudulent Transfer Trust Recipients, and the Fraudulent Transfer Entity Recipients are referred to collectively in the Complaint as the “Fraudulent Transfer Recipient Defendants.” See Compl. ¶ 302. [5] Given the long and complex procedural history of this case, the Court will focus only on the procedural history relevant to the disposition of the matters currently being adjudicated. [6] By letter dated April 3, 2015, Bruce and Kathleen Frank apprised the Court that they would no longer be represented by counsel in this action and were proceeding pro se. [7] Arnold and Sondra Frank's opposition papers were filed in a pro se capacity since at that juncture in the proceedings, they were no longer represented by counsel. See DE 123 (consisting of a letter from both Arnold and Sondra Frank stating they will be proceeding pro se ). [8] The Court notes that both the courtesy copy of the Haltman Defendants' memorandum of law as well as the copy filed on ECF is dated March 9, 2015. No explanation is provided by the Haltman Defendants' counsel for the discrepancy between the date the memorandum was purportedly completed and the date it was filed on ECF—approximately two months later. [9] Kathleen Frank, also representing herself pro se, filed her own individual Declaration in Opposition to Plaintiff's Motion for Sanctions. However, with respect to this motion, she is not named as a party. See Plaintiff's Notice of Motion for Sanctions and Other Relief. DE 92. [10] In addition to her response, Sondra Frank also filed a Rule 11 Motion asserting that Plaintiff's motion was filed against her “for the sole purpose of harassment and needlessly increasing [her] cost of litigation; which by its very nature violates Rule 11(b).” DE 139. This motion is pending before Judge Seybert. [11] Go Daddy provides domain-based email hosting services. See https://www.godaddy.com/email-account.aspx. [12] Iron Mountain is a company specializing in records management and storage, data management and secure shedding services. See http:// www.ironmountain.com/Services.aspx. [13] The Court assumes that the Haltman Defendants' also interpose the same defenses with respect to Michael Haltman as were outlined earlier. See supra, at 1. Loss of Go Daddy Emails. [14] Exeter filed a Petition for Bankruptcy on November 9, 2011. [15] The Court notes that the question of whether QuickBooks was altered and the effect of such alteration is an ultimate question of fact that is not ripe for determination at this time since it pertains directly to some of Plaintiff's claims, including breach of fiduciary duty and aiding and abetting a breach of a fiduciary duty. See generally Compl. [DE 3]. In addition, the Court is not in possession of the necessary information with which to make such a factual determination even if such a determination were appropriate at this stage of the litigation. The question of whether such alteration occurred, and, if so, whether it was done pursuant to generally accepted accounting principles is a question properly addressed by forensic accounting/computer experts. [16] Citations to the Weinstein Deposition Transcript refer to the page numbers located at the bottom center of each page as opposed to the transcript's internal numbering. [17] Affidavit of Leonard Weinstein, dated March 9, 2015, ¶ 12 [DE 128]. [18] There are no facts in the record showing that Weinstein ever completed his analysis of the hard drive. In his deposition testimony, he states that if he were given further access to the hard drive he could finish his analysis and determine what, if anything, had been deleted. Weinstein Dep. Tr. at 87. [19] The Court points out that the Committee on the Federal Rules of Civil Procedure has proposed new rules to become effective December 1, 2015 which essentially will scale back some of the more stringent guidance offered in Residential Funding. Indeed, the Advisory Committee notes to the new Federal Rule of Civil Procedure 37(e) state in part that this new rule: “rejects cases such as Residential Funding ... that authorize the giving of adverse-inference instructions on a finding of negligence or gross negligence. Adverse inference instructions were developed on the premise that a party's intentional loss or destruction of evidence to prevent its use in litigation gives rise to a reasonable inference that the evidence was unfavorable for the party responsible for loss or destruction of the evidence. Negligent or even grossly negligent behavior does not logically support that inference.” Advisory Committee Notes to FED. R. OF CIV. P. 37(e), effective Dec. 1, 2015. [20] As a Debtor, Exeter, acting through its directors and officers, was required to ensure not only preservation of business records but also to affirmatively ensure the creation of books and records accurately documenting its business affairs. See In re O'Hara, No. 1:11–CV–0807, 2013 WL 1751001, at *6 (N.D.N.Y. Apr. 23, 2013). [21] Notably, the obligation of corporate officers and managers to preserve evidence and notify employees of their preservation obligations does not lead to the inexorable conclusion that when this duty is breached, such individuals are automatically liable in their individual capacities. In as much as Plaintiff appears to be inferring that individual liability will attach where a corporate officer or manager fails to properly preserve evidence, see Pl.'s Mem. at 1314, such an argument is misplaced. See supra, at 10–11. [22] In addition, as officers and directors of Exeter, Arnold Frank, Michael Haltman and Sondra Frank shared in the duty of preservation. See Tr. of the Apr. 8, 2014 Deposition of Arnold Frank (“A. Frank Dep. Tr.”), attached as Ex. 7 to the Roesser Decl. [DE 142] at 40 (Arnold Frank acknowledges being Chairman of Exeter); DE 128, Ex. P (consisting of minutes of board meetings held by Exeter); A. Frank Dep. Tr. at 16; DE 128 Ex. P (indentifying Sondra Frank as Secretary and later as Corporate Complaince Officer); A. Frank Dep. Tr. at 74; Roesser Decl., Ex. 8 (describing Michael Haltman as “Vice President” and “Executive–at–Large”). [23] Michael Haltman has been characterized by both Arnold Frank and Linda Haltman as either an “officer,” “vice-president,” or “executive at large” of Exeter. In addition, since 2006, he received a salary from Exeter. See A. Frank Dep. Tr. at 74; Roesser Aff., Ex. 19 at 114; L. Haltman Dep. Tr. III at 631. [24] During the March 11, 2014 deposition of non-party witness Anna Cincinnato, the Court was contacted regarding the conduct of defendant Linda Haltman at the deposition. The Court admonished Ms. Haltman about her conduct and warned her to cease and desist from such behavior or face the prospect of contempt. Although the remainder of the Cincinnato deposition apparently proceeded without further incident, plaintiffs' counsel pointed out to the Court subsequently that Ms. Haltman engaged in similar conduct during the deposition of her husband and co-defendant, Michael Haltman, in defiance of the Court's Order. See DE 36. Plaintiff's counsel thereafter filed a formal motion [DE 60] seeking to have Linda Haltman held in contempt, which Defendant Haltman opposed [DE 64]. After reviewing all of the submissions related to the motion, the Court found that Ms. Haltman had failed to comply with the Court's Orders, as a result of which she was precluded from physically attending future depositions (although she was authorized to attend by telephone) and was required to pay a sanction of $2,500 imposed by the Court. See DE 82. [25] Though Plaintiff may be implicitly seeking punitive monetary sanctions in addition to its explicit request for attorney's fees and costs, Pl.'s Mem. at 25, Plaintiff has not sufficiently briefed the Court as to why monetary sanctions should be levied in this case where the Court has already provided sufficient relief in the form of an adverse inference—the alternate relief Plaintiff has requested. See Pl.'s Mem. at 24. In addition, whether to grant attorney's fees and costs on the one hand and punitive monetary sanctions on the other are two separate and distinct inquiries, see Gutman, 2008 WL 4682208, at *13 (treating the explicit request for attorney's fees/costs and punitive monetary sanctions separately); Passlogix, Inc. v. 2FA Tech., LLC, 708 F.Supp.2d 378, 422 (S.D.N.Y.2010) (awarding monetary sanctions but analyzing whether to award costs separately and finding such an award inappropriate), and hence any decision by this Court with respect to an analysis and award of attorney's fees would not necessarily be equally applicable to an award of punitive monetary sanctions. In any event, because Plaintiff has not explicitly sought monetary sanctions, the Court will address only Plaintiff's request for attorney's fees and costs.