AMENDED MEMORANDUM & ORDER

PAMELA K. CHEN, District Judge.

Before the Court is plaintiff Protostorm LLC's ("Protostorm") motion to hold defendant Antonelli, Terry, Stout & Kraus, LLP ("ATS&K"), defendant Alan E. Schiavelli ("Schiavelli"), and non-party ATS&K equity partners in contempt for violation of the Court's Order dated December 24, 2014 (Dkt. 619 ("December 24 Order")). (Dkts. 685-87.) Among other things, the December 24 Order imposed temporary conditions1 on ATS&K's ability to transfer monies in lieu of posting a bond for staying enforcement of the judgment against ATS&K during the pendency of ATS&K's post-trial motion. (December 24 Order at 1, 4-5.) As set forth in the December 24 Order, the conditions were imposed as a means to provide "additional security" to Protostorm "regarding its ability to recover on the judgment[.]" (Id. at 4.)

The Court reviewed the parties' submissions and heard oral argument on August 3, 2015. For the reasons discussed at the August 3rd oral argument and set forth below, the Court finds ATS&K and Schiavelli in contempt of the December 24 Order based on ATS&K's use of funds to pay non-operating expenses after the firm ceased to operate as a law firm.2

A district court has "inherent power to hold a party in civil contempt" to "enforce compliance with an order of the court or to compensate for losses or damages." SD Prot., Inc. v. Del Rio, 587 F.Supp.2d 429, 433 (E.D.N.Y. 2008) (citation and internal quotation marks omitted). "A party may be held [liable] in civil contempt for failure to comply with a court order if (1) the order the contemnor failed to comply with is clear and unambiguous, (2) the proof of noncompliance is clear and convincing, and (3) the contemnor has not diligently attempted to comply in a reasonable manner. It need not be established that the violation was willful." Paramedics Electromedicina Comercial, Ltda v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645, 655 (2d Cir. 2004) (internal citations and quotation marks omitted). The standard for contempt is "rigorous" and requires that the party seeking contempt prove its elements "by clear and convincing evidence[.]" Schmitz v. St. Regis Paper Co., 758 F.Supp. 922, 925 (S.D.N.Y. 1991).

The Court finds that Protostorm has proved ATS&K's contempt by clear and convincing evidence with regard to ATS&K's payment of non-operating expenses after it ceased providing legal services and functioning as a law firm. First, the December 24 Order clearly and unambiguously prohibited ATS&K from paying expenses beyond "operating expenses incurred in the ordinary course of business[.]" (December 24 Order at 4.) By letter dated June 1, 2015, ATS&K informed Protostorm "that, while ATSK is continuing to operate for limited purposes, it ceased performing legal services as of April 30, 2015." (Dkt. 685 ("Goodman Decl.") Ex. 12.) Thereafter, on June 5, 2015, Protostorm advised the Court of the change in ATS&K's status. (Id. Ex. 14.) The Court finds that any payments made by ATS&K after it ceased to provide legal services or function as a law firm cannot be considered "operating expenses made in the ordinary course of business" as contemplated by the December 24 Order. In reaching this conclusion, the Court rejects ATS&K's arguments that the term "operating expenses made in the ordinary course of business" is ambiguous and that solely collecting receivables and paying bills, without any ongoing provision of legal services, meets the definition of the "ordinary of course of business" for a law firm.3

Second, Protostorm's proof of ATS&K's noncompliance with the December 24 Order is clear and convincing. It is undisputed that, after informing Protostorm that it had ceased providing legal services as of April 30, 2015, ATS&K made payments to firm members and various third parties totaling $118,033 in May 2015. (Dkt. 686 ("Maini Decl.") Ex. A (citing ATSK 03179/03180, included in Goodman Decl. Ex. 3).)

Third, the Court finds that ATS&K did not diligently attempt to comply with the December 24 Order in a reasonable manner. Contrary to what a diligent and reasonable party would have done, ATS&K continued to expend ATS&K's funds despite the firm ceasing to operate as a law firm. To the extent ATS&K was unsure of its obligations under the December 24 Order in light of the change in its business,4 it was incumbent on ATS&K to seek clarification from the Court. Instead, ATS&K unreasonably failed to inform the Court that it had ceased performing legal services in April or seek guidance from the Court on whether it was permitted to make payments for expenses that logically could be deemed non-operating.

Accordingly, the Court holds defendants ATS&K and Schiavelli in contempt of the December 24 Order.5

The Court has considered and rejects Protostorm's other claimed bases for a finding of contempt. Briefly, with regard to the other examples of ATS&K's noncompliance argued by Protostorm, the Court finds that either the December 24 Order was not sufficiently clear and unambiguous to warrant a finding of contempt on the particular issue, or Protostorm's proof of contempt was not sufficiently clear and convincing.6

As to the appropriate remedy for ATS&K's contempt, the Court finds that the surplus in ATS&K's accounts at the close of April 2015 ($60,209.00), plus ATS&K's total revenues in May 2015 ($163,970.00) (see Maini Decl. Ex. A) compensates Protostorm for ATS&K's contempt of the December 24 Order on the ground set forth above. United States v. United Mine Workers of Am., 330 U.S. 258, 303-04 (1966) ("Judicial sanctions in civil contempt proceedings may, in a proper case, be employed for either or both of two purposes; to coerce the defendant into compliance with the court's order, and to compensate the complainant for losses sustained."); Del Rio, 587 F. Supp. 2d at 434.7 The total sanction against defendants ATS&K and Schiavelli for contempt of the December 24 Order is therefore $224,179.00.8 This amount shall be enforceable against ATS&K's assets and Schiavelli's personal assets.

Based on Protostorm's motion to modify the contempt order (Dkt. 710) and the parties' argument at the telephone conference held on October 13, 2015, the Court revises its original order (Dkt. 709) to direct that the contempt award shall not be paid by funds in the specialinterest bearing account, which shall be reserved for satisfaction of the February 5, 2015 Amended Judgment. (Dkt. 639.) Additionally, based on the same modification-related arguments, the Court has decided to stay execution of the contempt award pending resolution of any appeal of this order finding contempt and imposing sanctions.

SO ORDERED.