Baker & Hostetler LLP 45 Rockefeller Plaza New York

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Baker & Hostetler LLP Hearing Date: August 29, 2012 45 Rockefeller Plaza Hearing Time: 10:00 A.M. New York, New York 10111 Objection Deadline: August 22, 2012 Telephone: (212) 589-4200 Time: 4:00 P.M. Facsimile: (212) 589-4201 Irving H. Picard Email: [email protected] David J. Sheehan Email: [email protected] Seanna R. Brown Email: [email protected] Jessie Schweller Email: [email protected]

Attorneys for Irving H. Picard, Trustee for the Substantively Consolidated SIPA Liquidation of Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK SECURITIES INVESTOR PROTECTION CORPORATION, Adv. Pro. No. 08-01789 (BRL)

Plaintiff, SIPA Liquidation

v. (Substantively Consolidated)

BERNARD L. MADOFF INVESTMENT SECURITIES LLC,

Defendant.

In re:

BERNARD L. MADOFF,

Debtor.

NINTH APPLICATION OF TRUSTEE AND BAKER & HOSTETLER LLP FOR ALLOWANCE OF INTERIM COMPENSATION FOR SERVICES RENDERED AND REIMBURSEMENT OF ACTUAL AND NECESSARY EXPENSES INCURRED FROM OCTOBER 1, 2011 THROUGH JANUARY 31, 2012

TABLE OF CONTENTS

Page I. PRELIMINARY STATEMENT ...... 1 II. BACKGROUND ...... 4 A. The SIPA Liquidation ...... 4 B. The Trustee, Counsel, and Consultants...... 5 C. Prior Compensation Orders...... 5 III. SUMMARY OF SERVICES ...... 6 A. HARDSHIP PROGRAM ...... 6 B. The Recovery and Return of Customer Property ...... 7 i. Recoveries Accomplished During This Compensation Period ...... 7 IV. DETAILED DESCRIPTION OF SERVICES ...... 8 A. MATTER 01 ...... 9 i. Task Code 01: Trustee Investigation ...... 9 ii. Task Code 02: Bankruptcy Court Litigation ...... 10 iii. Task Code 03: Feeder Funds...... 13 iv. Task Code 04: Asset Research and Sale ...... 14 v. Task Code 05: Internal Meetings with Staff ...... 14 vi. Task Code 07: Billing & Trustee Reports...... 15 vii. Task Code 08: Case Administration ...... 15 viii. Task Code 09: Banks ...... 16 ix. Task Code 10: Court Appearances ...... 17 x. Task Code 11: Press Inquiries and Responses ...... 17 xi. Task Code 12: Document Review ...... 17 xii. Task Code 13: Depositions and Document Productions by the Trustee...... 17 xiii. Task Code 14: International ...... 19 xiv. Task Code 15: Charities ...... 19 xv. Task Code 19: Non-Bankruptcy Litigation...... 20 xvi. Task Code 20: Governmental Agencies ...... 20 xvii. Task Code 21: Allocation ...... 21 B. MATTER 03 – CHAIS ...... 22 C. MATTER 04 – MERKIN ...... 22

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TABLE OF CONTENTS (continued) Page D. MATTER 05 – CUSTOMER CLAIMS ...... 23 i. Customer Claims ...... 23 ii. General Creditor Claims ...... 24 iii. The Trustee Has Kept Customers Informed Of The Status Of The Claims Process ...... 24 E. MATTER 06 – VIZCAYA ...... 26 F. MATTER 07 – MADOFF FAMILY ...... 27 G. MATTER 08 – NORMAN LEVY ...... 29 H. MATTER 09 – FAIRFIELD GREENWICH ...... 29 I. MATTER 10 – HARLEY ...... 32 J. MATTER 11 – COHMAD SECURITIES CORPORATION ...... 33 K. MATTER 12 – PICOWER ...... 33 L. MATTER 13 – KINGATE ...... 35 M. MATTER 18 – THYBO ...... 36 N. MATTER 19 – RUTH MADOFF...... 37 O. MATTER 21 – AVOIDANCE ACTION LITIGATION ...... 37 P. MATTER 26 – RICHARD STAHL ...... 38 Q. MATTER 27 – JP MORGAN CHASE ...... 39 R. MATTER 28 - WESTPORT ...... 39 S. MATTER 29 – RYE/TREMONT ...... 40 T. MATTER 30 – HSBC ...... 41 U. MATTER 31 – KATZ/WILPON ...... 43 V. MATTER 32 – UBS/LIF ...... 45 W. MATTER 33 – NOMURA BANK INTERNATIONAL PLC ...... 46 X. MATTER 34 - CITIBANK ...... 47 Y. MATTER 35 - NATIXIS ...... 47 Z. MATTER 36 – MERRILL LYNCH ...... 48 AA. MATTER 37 – ABN AMRO ...... 48 BB. MATTER 38 – BANCO BILBAO ...... 49 CC. MATTER 39 - FORTIS ...... 50 DD. MATTER 40 – MEDICI ENTERPRISE ...... 50

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TABLE OF CONTENTS (continued) Page EE. MATTER 41 - WHITECHAPEL ...... 51 FF. MATTER 42 - EQUITY TRADING ...... 52 GG. MATTER 43 – DEFENDER ...... 52 HH. MATTER 44 – MACCABEE ...... 53 II. MATTER 45 – LEVEY ...... 54 JJ. MATTER 46 – GLANTZ ...... 55 KK. MATTER 47 – BONVENTRE ...... 56 LL. MATTER 48 – BONGIORNO ...... 56 MM. MATTER 49 – GREENBERGER ...... 57 NN. MATTER 50 – PITZ ...... 58 OO. MATTER 51 – CRUPI ...... 58 PP. MATTER 52 – DONALD FRIEDMAN ...... 59 QQ. MATTER 53 – MAGNIFY ...... 60 RR. MATTER 54 – MENDELOW ...... 60 SS. MATTER 55 – KUGEL...... 61 TT. MATTER 56 – LIPKIN ...... 62 UU. MATTER 57 – PEREZ/O’HARA ...... 62 VV. MATTER 58 – PJ ADMINISTRATORS ...... 63 WW. MATTER 59 – STANLEY SHAPIRO ...... 63 XX. MATTER 60 – AVELLINO & BIENES ...... 64 YY. MATTER 61 – MAXAM ...... 65 ZZ. MATTER 62 – SUBSEQUENT TRANSFERS ...... 66 V. COMPENSATION REQUESTED ...... 67 VI. RELEASE OF THE HOLDBACK ...... 71 VII. THE REQUEST FOR INTERIM COMPENSATION SHOULD BE GRANTED...... 71 VIII. CONCLUSION ...... 73

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TO THE HONORABLE BURTON R. LIFLAND, UNITED STATES BANKRUPTCY JUDGE:

Baker & Hostetler LLP (“B&H”), as counsel to Irving H. Picard, Esq., trustee (the

“Trustee”) for the substantively consolidated liquidation proceeding of Bernard L. Madoff

Investment Securities LLC (“BLMIS”) under the Securities Investor Protection Act (“SIPA”), 15

U.S.C. § 78aaa et seq.,1 and Bernard L. Madoff (“Madoff”), individually (collectively, the

“Debtor”), respectfully submits this ninth application (the “Application”) on behalf of the

Trustee and itself for an order pursuant to section 78eee(b)(5) of SIPA, sections 330 and 331 of

title 11 of the United States Code (the “Bankruptcy Code”), Rule 2016(a) of the Federal Rules of

Bankruptcy Procedure (the “Bankruptcy Rules”), and the Order Pursuant to section 78eee(b)(5)

of SIPA, sections 105, 330 and 331 of the Bankruptcy Code, Bankruptcy Rule 2016(a), and

Local Bankruptcy Rule 2016-1 Establishing Procedures Governing Interim Monthly

Compensation of Trustee and Baker & Hostetler LLP, dated February 25, 2009 (ECF No. 126),

as amended on December 17, 2009 and June 1, 2011 (ECF Nos. 1078 and 4125) (collectively,

the “Second Amended Compensation Order”), allowing and awarding (i) interim compensation

for services performed by the Trustee and B&H for the period commencing October 1, 2011

through and including January 31, 2012 (the “Compensation Period”), (ii) reimbursement of the

Trustee’s and B&H’s actual and necessary expenses incurred during the Compensation Period;

and (iii) release of $16 million of the holdback; and in support thereof, respectfully represents as

follows:

I. PRELIMINARY STATEMENT

1. The work completed by the Trustee and B&H during this Compensation Period

yielded significant results for BLMIS customers and the liquidation. As recognized by the

1 References hereinafter to provisions of SIPA shall omit “15 U.S.C.”

District Court, the Trustee “has worked relentlessly over nearly three years to bring assets that

passed through [BLMIS] back into the customer fund, in order to restore nearly $20 billion in

customer losses.” Picard v. J.P. Morgan Chase & Co., No. 11 Civ. 00913, 2011 WL 5170434,

at *1 (S.D.N.Y. Nov. 1, 2011) (CM). Through pre-litigation and other settlements, the Trustee

has successfully recovered, or reached agreements to recover, more than $9.1 billion—over 50%

of the principal lost in the Ponzi scheme by those who filed claims—for the benefit of all

customers of BLMIS with an allowed claim.

2. No administration costs, including the compensation of the Trustee and his

counsel, will be paid out of any recoveries obtained by the Trustee for the benefit of BLMIS

customers. Because the percentage commission schedule for trustees found in section 326(a) of

the Bankruptcy Code is not applicable in a SIPA liquidation, see section 78eee(b)(5)(C) of SIPA,

no applications filed by the Trustee have or will ever include a fee request based on recoveries

made by the Trustee for the benefit of BLMIS customers. Rather, all fees, expenses, and

administrative costs incurred by the Trustee and his counsel including, but not limited to, B&H,

various international special counsel retained by the Trustee (collectively referred to herein as

“International Counsel”) and various special counsel to the Trustee (collectively referred to

herein as “Counsel”), including Windels Marx Lane & Mittendorf, LLP (“Windels Marx”),

Young Conaway Stargatt & Taylor, LLP (“Young Conaway”), and Osborne & Osborne, P.A.

(the “Osborne Firm”), and consultants, are paid out of administrative advances made by the

Securities Investor Protection Corporation (“SIPC”). As this Court affirmed: “Again, the

emphasis is that these fees . . . are not coming from any of the victims, and they’re not coming

from the estate.” Fifth App. Hr’g Tr. 32:15-17, Dec. 14, 2010.

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3. As the Trustee’s and his Counsel’s fees and expenses are chargeable to the

general estate and not to the fund of customer property (“Customer Fund”), the payment of the

same has absolutely no impact on the Trustee’s current and future recoveries that have been and

will be allocated to Customer Fund for pro rata distribution to BLMIS customers whose claims

have been allowed by the Trustee.

4. In a liquidation proceeding such as this, where the general estate is insufficient to

pay trustee compensation, SIPC plays a specific role with compensation and is required to

advance funds to pay the costs of administration. See SIPA §§ 78eee(b)(5)(c) and 78fff-3(b)(2).

SIPC has carefully reviewed this Application, as it has all other compensation applications, and

has closely analyzed the time records and services rendered. Each month, SIPC, the Trustee, and

B&H engage in extensive discussions regarding the billings, and the Trustee and B&H make

reductions where appropriate and finalize the amounts that appear herein. Thus, the requested

fees and expenses in this Application include (i) fees at the Trustee’s and B&H’s hourly billable

rates to which a public interest discount of 10% has been applied, and (ii) actual, necessary, and

reasonable expenses incurred within the Compensation Period.

5. During the hearing on the Eighth Interim Fee Applications, this Court

acknowledged the worldwide efforts of the Trustee and his counsel and approved the

applications:

Well, having heard the description and being well aware of the worldwide activities stared off by Bernie Madoff and the sequelae [sic] is left for everybody else to follow all the trails and the trails do lead almost everywhere in the world. It is clear under the circumstances that a Herculean effort to follow those trails has been involved both with counsel herein the United States and counsel overseas.

Eighth App. Hr’g Tr. 16, Mar. 15, 2012.

6. No single document can capture all of the tasks engaged in by the Trustee and

B&H since their appointment on December 15, 2008. Hundreds of thousands of hours have been

expended in support of the Trustee’s efforts to liquidate the estate, determine customer claims,

and advance the interests of all claimants by initiating litigations and settlement negotiations for

the return of customer property (“Customer Property”), including significant settlements,

agreements to settle and recoveries that currently total more than $9.1 billion, to be distributed

by the Trustee. Moreover, the Trustee has vigorously defended the estate with respect to a

number of litigations filed against it and against his pursuit of Customer Property. The following

discussion and materials attached to this Application cover the major categories of services for

which allowance of compensation is sought.

7. As this Court has recognized, “With respect to the kinds of services that have

been rendered here, the amounts requested, this is by any stretch of the imagination one of the

largest most complex sets of litigation that have come down the pike. It’s measured both in

quality and quantity in the thousands with deadlines that have come . . . and it is a big stretch for

any law firm or any organization to deal with.” Sixth Fee App. Hr’g Tr. 45:23-46:6, June 1,

II. BACKGROUND

A. THE SIPA LIQUIDATION

8. The Trustee and B&H’s prior interim fee applications, each of which is fully

incorporated herein,2 have detailed the circumstances surrounding the filing of this case and the

events that have taken place during prior phases of this proceeding.

2 Prior fee applications cover the periods from December 11, 2008 to May 31, 2009 (the “First Interim Fee Application”) (ECF No. 320, 321); June 1, 2009 to September 30, 2009 (the “Second Interim Fee Application”) (ECF No. 998, 1010); October 1, 2009 to January 31, 2010 (the “Third Interim Fee Application”) (ECF No. 2188, 2189); February 1, 2010 to May 31, 2010 (the “Fourth Interim Fee Application”) (ECF No. 2883); June 1, 2010 to September 30, 2010 (the “Fifth Interim Fee Application”) (ECF No. 3207); October 1, 2010 to January 31, 2011 (the “Sixth Interim Fee Application”) (ECF No. 4022); February 1, 2011 to May 31, 2011 (the “Seventh Interim Fee Application”) (ECF No. 4376); and June 1, 2011 to September 30, 2011 (the “Eighth Interim Fee Application”) (ECF No. 4676).

B. THE TRUSTEE, COUNSEL, AND CONSULTANTS

9. The Trustee and B&H’s prior interim fee applications have detailed the

description of the Trustee’s background and experience.

10. In rendering professional services to the Trustee, B&H has utilized a legal team

comprised of professionals with extensive experience in legal areas such as bankruptcy,

securities, tax, corporate, and litigation, permitting the Trustee to conduct this liquidation

efficiently.

11. The Ponzi scheme perpetrated by Madoff through BLMIS was vast in scope, long

in duration, and broad in its geographical reach. The Trustee, with the assistance of his Counsel,

has undertaken a comprehensive investigation of BLMIS, Madoff, and hundreds of related

individuals and entities. To this end, the Trustee has engaged not only the services of Counsel,

but also those of forensic accountants and legal experts, including, but not limited to,

AlixPartners LLP (“AlixPartners”), the Trustee’s consultant and claims agent, FTI Consulting

(“FTI”), and several investigative and industry consultants (collectively referred to herein as the

“Consultants”).

C. PRIOR COMPENSATION ORDERS

12. The Trustee and B&H filed applications for interim allowance of compensation

for professional services rendered and reimbursement of actual and necessary expenses incurred

in prior periods, and the Bankruptcy Court approved those applications:

Applications Orders Entered First Applications (ECF Nos. 320, 321) August 6, 2009 (ECF No. 363) Second Applications (ECF Nos. 998, 1010) December 17, 2009 (ECF No. 1078) Third Applications (ECF Nos. 2188, 2189) May 6, 2010 (ECF No. 2251) Fourth Application (ECF No. 2883) September 14, 2010 (ECF No. 2981) Fifth Application (ECF No. 3207) December 14, 2010 (ECF No. 3474) Sixth Application (ECF No. 4022) June 1, 2011 (ECF No. 4125) Seventh Application (ECF No. 4376) October 19, 2011 (ECF No. 4471) Eighth Application (ECF No. 4676) March 19, 2012 (ECF No. 4735)

III. SUMMARY OF SERVICES

13. A SIPA proceeding contemplates the processing of customer claims, the orderly

liquidation of the business of a broker-dealer, and the return of Customer Property to the failed

brokerage’s customers. Accordingly, the Trustee’s and B&H’s services, which are summarized

in greater detail below, are comprised of specific tasks that are critical to accomplishing those

objectives.

A. HARDSHIP PROGRAM

14. The Trustee and B&H implemented a Hardship Program in an effort to accelerate

SIPA protection for BLMIS victims suffering hardship. The first phase of this program is more

fully described in prior interim fee applications.

15. The Trustee expanded the Hardship Program into a second phase as he instituted

avoidance actions. While the Trustee’s authority includes the pursuit of avoidance actions to

recover Customer Property, the Trustee has not pursued avoidance actions against BLMIS

accountholders suffering proven hardship. In November 2010, the Trustee announced that to

forego an avoidance action, the accountholder must submit financial and other pertinent

information. Through this program, the Trustee has worked with a substantial number of

applicants to confirm their hardship status and forego the pursuit of an avoidance action.

16. As of January 31, 2012, the Trustee had received 476 applications from avoidance

action defendants relating to 303 adversary proceedings. After reviewing the facts and

circumstances presented in each application and, in many cases, the requested additional verification information, the Trustee dismissed, or was in the process of dismissing, 158 avoidance actions. As of January 31, 2012, many of the applications were in various stages of

review. The Trustee has also extended the time for applicants to answer or otherwise respond to avoidance action complaints while their hardship applications are pending.

17. The Trustee established a Hardship Program Hotline with a telephone number and electronic mail address. A large number of potential applicants have been assisted by the Trustee through the use of this hotline, and the Trustee urges customers to continue to use this resource and the Hardship Program if they believe they qualify. Further information and applications are available on the Trustee’s website, www.madofftrustee.com.

B. THE RECOVERY AND RETURN OF CUSTOMER PROPERTY

i. Recoveries Accomplished During This Compensation Period

18. Without the need for protracted litigation, during this Compensation Period, the

Trustee succeeded in settling 18 cases for approximately $390 million. Currently, the Trustee

has successfully recovered or reached agreements to recover more than $9.1 billion.

19. The Trustee entered into settlements during and subsequent to this Compensation

Period that will bring approximately $586 million into the Customer Fund.

20. The Trustee is also engaged in ongoing settlement negotiations with a number of

parties that could result in additional recoveries for the benefit of customers without the delay

and expense of litigation.

21. Through the end of this Compensation Period, the Trustee recovered

approximately $316.7 million as a result of preference and other settlements that were made

pursuant to agreements subject to the Net Equity Dispute. The United States Supreme Court

recently declined to review the Net Equity Dispute and, with this ruling, the Trustee has moved

forward with the next distribution of Customer Property to BLMIS customers.

IV. DETAILED DESCRIPTION OF SERVICES

22. Given the unprecedented fraud perpetrated by Madoff, the issues involved are

complex, discovery is wide-ranging, and the litigation that has ensued is hotly contested. All of

this requires an enormous effort by the Trustee and his Counsel for the benefit of the victims.

The following is a more detailed synopsis of the significant services rendered by the Trustee and

B&H during this Compensation Period, organized according to internal B&H matter numbers

and task codes.

23. Matter Number 01 is the general matter number used for tasks that affect all

actions taken by the Trustee and B&H. Task numbers for Matter Number 01 have been assigned

for specific categories of work to permit a more detailed analysis of the fees incurred.

24. Matter Numbers 03-62 (with the exception of Matter Number 05, which relates to customer claims) relate to specific litigation brought by the Trustee and B&H against various individuals, feeder funds, and entities.3 In each of these matters, the Trustee and B&H attorneys

perform several functions, including the following tasks related to the individual actions: conduct legal research; draft internal memoranda; engage in internal meetings with the Trustee’s

Consultants regarding investigation and litigation strategy; and engage in discussions with counsel for defendant(s). Rather than repeat these tasks, the description of each matter will be limited to matter-specific tasks and case activity that occurred during this Compensation Period.

3 Reserved and closed matter numbers will not be listed in this Application. Matter numbers reserved or closed during prior compensation periods can be found in the respective interim fee applications.

A. MATTER 01

25. This matter categorizes the time spent by the Trustee and B&H, and encompasses

the below enumerated tasks.

i. Task Code 01: Trustee Investigation

26. This category relates to time spent with respect to the investigation into BLMIS,

Madoff, and various assets.

27. The Trustee is seeking the return of billions of dollars to the estate of BLMIS for

distribution to customers in accordance with SIPA. In carrying out his investigation into the

many layers of complex financial transactions engaged in by Madoff and those who worked for

him, the Trustee has issued hundreds of subpoenas, analyzed the myriad documentation received,

and conducted numerous follow-up activities to enforce the Trustee’s rights to the return of

Customer Property.

28. During this Compensation Period, the Trustee and B&H attorneys initiated,

participated in, and monitored international proceedings involving BLMIS. B&H attorneys continued the investigation of banks, feeder funds, auditors, insiders, Madoff friends and family members, former BLMIS employees, and other Madoff-related parties, as well as continued the

investigation of Madoff Securities International Limited (“MSIL”).

29. B&H attorneys coordinated efforts with the United States Attorney’s Office for

the Southern District of New York (“USAO”), the Federal Bureau of Investigation (“FBI”), the

the SEC, the Government Accountability Office (“GAO”), the United States Department of

Justice (“DOJ”), and other local, federal, and international officials involved in the investigation of Madoff and BLMIS.

30. In addition, B&H attorneys reviewed copies of records obtained by the FBI and the SEC, and other information from the USAO and securities regulators. B&H attorneys also

communicated with SIPC, Windels Marx, Young Conaway, AlixPartners, FTI, and other consultants regarding IA accounts and records of the transactions, business investments, and ventures between potential insiders and BLMIS, Madoff, and Madoff family members.

31. B&H attorneys discussed and conferenced with SIPC, Windels Marx, Young

Conaway, International Counsel, and various government entities regarding investigation and litigation strategy, prepared requests for discovery and negotiated other discovery-related issues with adversaries, and organized and reviewed documents received in response to third party inquiries and subpoenas.

ii. Task Code 02: Bankruptcy Court Litigation

32. This category relates to time spent conducting legal research, drafting, and filing

various pleadings and motions in the main bankruptcy proceeding that affect the hundreds of

adversary proceedings filed by the Trustee.

33. On February 18, 2010, this Court approved a pre-litigation settlement between the

Trustee and the Estate of Norman F. Levy. (ECF No. 1964). This settlement resulted in the

return of $220 million (the “Levy Settlement”). One year later, on February 18, 2011, certain

customers moved to set aside the Court’s Order approving the Levy Settlement. (ECF No.

3861). This Court denied the motion (ECF No. 3984), and the claimants filed an appeal on April

11, 2011. (ECF No. 4005).

34. On February 16, 2012, United States District Judge Deborah A. Batts issued a

Memorandum and Order affirming this Court’s order of March 30, 2011. See Sec. Inv. Prot.

Corp. v. Bernard L. Madoff Inv. Sec., No. 11 Civ. 03313, 2012 U.S. Dist. LEXIS 21740

(S.D.N.Y. Feb. 16, 2012) (DAB). The District Court found that bankruptcy courts need not

conduct a “mini-trial” of all the facts underlying settlement disputes and are entitled to rely upon

the opinions of the trustee, the parties, and their attorneys. Id. at *12. Thus, the District Court

held that this Court did not abuse its discretion in denying the motion to vacate the settlement.

Id. at *7. The claimants subsequently appealed Judge Batts’s decision to the Second Circuit.

See Peshkin v. Levy-Church, No. 12-816 (2d Cir.). Briefing is currently scheduled through fall

2012. Because an appeal was taken from the District Court’s order, the $220 million must remain in reserve and cannot be distributed to BLMIS customers until the appeal is finally resolved.

35. On December 21, 2011, a $326 million settlement between the Trustee and the

United States of America, on behalf of the Internal Revenue Service, was approved by this

Court. (ECF No. 4602). One limited objection was filed by Pasifin Co. Inc., which will be addressed in the resolution of the Pasifin objection to the Trustee’s determination of Pasifin’s claim. (ECF No. 4597). The Trustee determined that BLMIS debited the accounts of 145 foreign account holders for alleged U.S. federal income tax withholding and paid to the IRS such withheld amounts related to alleged dividends. However, because no securities were purchased and thus no dividends were ever received by BLMIS, no amounts should have been withheld and transferred to the IRS. After receipt of the settlement payment, the specific accounts at issue were credited for the amounts transferred from 2002—2008. If eligible, a pro rata distribution was made to those accounts from the Customer Fund in accordance with the Trustee’s First

Allocation Motion and this Court’s corresponding Order.

36. During this Compensation Period, the Trustee and B&H attorneys researched case

law and drafted briefing in opposition to appeals of the decision regarding the definition of

“customer” under SIPA, entered by this Court on June 28, 2011. These appeals were assigned to

United States District Judge Denise L. Cote. See No. 11 Civ. 05683 (S.D.N.Y.) (DLC). On

January 4, 2012, Judge Cote affirmed the June 28, 2011 order of this Court. See Aozora Bank

Ltd. v. Sec. Investor Prot. Corp., 2011 U.S. Dist. LEXIS 150753 (S.D.N.Y. Jan. 4, 2012).

37. On January 6, 2012, four appeals were taken from Judge Cote’s decision to the

United States Court of Appeals for the Second Circuit. See Bricklayers and Allied Craftsman

Local 2 Annuity Fund, et al. v. Sec. Inv. Prot. Corp., Irving H. Picard, No. 12-410; Sec. Inv.

Prot. Corp., Irving H. Picard v Rosamilia, et al., No. 12- 437; Sec. Investor Prot. Corp., Irving

H. Picard v. Kruse, et al., No. 12-483; and Upstate New York Bakery Drivers and Industry

Pension Fund v. Sec. Investor Prot. Corp., Irving H. Picard, No. 12-529 (2d Cir.). Briefing is

currently scheduled to extend through Fall 2012.

38. On October 5, 2011, the Trustee moved before this Court for an order establishing

a briefing schedule and hearing to affirm the claims determinations with respect to, and

adjudicate the objections of, ERISA claimants. (ECF No. 4432). The Bankruptcy Court entered

a scheduling order on November 8, 2011. (ECF No. 4507).

39. On November 14, 2011, the Trustee filed his Motion For An Order Affirming

Trustee’s Determinations Denying Claims Over ERISA-Related Objections (ECF No. 4521) (the

“ERISA Motion”). On or about January 17, 2012, approximately eighteen opposition briefs to

the ERISA Motion were filed on behalf of various ERISA claimants. (ECF Nos. 4625-4628,

4631-4633, 4635, 4637-4643, 4652-4654). During the Compensation Period, the Trustee and

B&H attorneys analyzed the filed objections and prepared to file a brief in support of the

Trustee’s motion. During the pendency of the above briefing, certain ERISA claimants also filed

motions to withdraw the reference on the ERISA Motion from this Court to the District Court.

On February 28, 2012 and March 1, 2012, these motions were accepted as related to the appeals

decided by Judge Cote in Aozora Bank, 2011 U.S. Dist. LEXIS 150753 (S.D.N.Y. Jan. 4, 2011),

discussed above, and were re-assigned to her Honor. Judge Cote withdrew the reference on

April 20, 2012.

iii. Task Code 03: Feeder Funds

40. As a result of the investigative efforts of the Trustee, litigation was initiated

against feeder funds and certain individuals, many of whom are well known to the public through

the press and other media.

41. The Trustee, through Counsel, has spent considerable time prosecuting 1,031

pending actions seeking to recover over $101 billion in funds from various feeders funds, banks,

BLMIS customers, and Madoff family members and friends.

42. On October 4, 2011, a $43.5 million settlement between the Trustee and Mount

Capital Fund, Ltd., a British Virgin Islands company in liquidation, and Mount Capital Asset

Subsidiary Limited, a British Virgin Islands company in liquidation (collectively, “Mount

Capital”), was approved by this Court. Picard v. Mount Capital Fund LTD, et al.; Adv. Pro. No.

10-05123 (Bankr. S.D.N.Y.) (BRL). (ECF No. 17). Under the settlement, Mount Capital paid

$43.5 Million to the Trustee. Mount Capital received an allowed customer claim in the SIPA

proceeding in the amount of $294,860,547.82 and received a SIPC customer advance under

SIPA § 78fff-(a).

43. On December 15, 2011 Defendants Plaza Investments International Limited and

Notz Stucki Management (Bermuda) Limited filed a motion to dismiss the Trustee’s complaint

against them. B&H attorneys and opposing counsel entered into a stipulation on January 31,

2012 adjourning the remaining briefing schedule due to the fact that many of the legal arguments

contained in the motion to dismiss are currently pending before Judge Rakoff in the United

States District Court for the Southern District of New York.

44. The Trustee and his Counsel identify, investigate, and monitor feeder funds in the

U.S. and abroad, and bring actions against such funds for the recovery of Customer Property.

Separate matter numbers have been assigned to feeder funds sued by the Trustee.

iv. Task Code 04: Asset Research and Sale

45. This category relates to time spent with respect to the discovery, recovery, and

liquidation of various assets for the benefit of the estate.

46. During this Compensation Period, the Trustee and B&H attorneys conducted due

diligence in connection with Andrew Madoff’s interest in Blow Styling Salon LLC and

monitored the sale of the same.

47. The Trustee and B&H attorneys inventoried the furniture and furnishings of the

17th Floor of the Lipstick Building and prepared a Notice of Abandonment.

48. The Trustee and B&H attorneys monitored the sale and liquidation of NSX

Holdings, an entity in which BLMIS was a significant shareholder.

49. The Trustee and B&H attorneys monitored the closing of Surge Trading, and analyzed the impact of certain FINRA-related issues.

50. The Trustee and B&H attorneys continued to work on valuing the intellectual property interest in Primex and strategized as to its sale.

v. Task Code 05: Internal Meetings with Staff

51. This category relates to time spent by the Trustee and B&H attorneys in internal

meetings regarding the liquidation proceeding, investigation and litigation strategy, as well as

training sessions for attorneys and paraprofessionals. Internal meetings and discussions have

ensured the effective use of time spent on this matter and avoided duplicative efforts.

vi. Task Code 07: Billing & Trustee Reports

52. This category relates to time spent by the Trustee, B&H attorneys, and

paraprofessionals reviewing the monthly B&H billing statements prior to submitting the

statements to SIPC to ensure that time was properly billed, correcting any errors in time entries,

writing off certain time and expenses as agreed to by B&H, preparing fee applications,

responding to motions for leave to appeal fee orders, preparing trustee reports, and other related

tasks.

vii. Task Code 08: Case Administration

53. This category relates to time spent assisting the efficient administration of the

54. The Trustee has also filed several motions before this Court that will govern the

treatment of and procedures related to the efficient litigation of these actions. These procedures will ensure consistency and transparency, as well as compliance with the Bankruptcy Code and

55. On October 20, 2011, the Trustee and B&H moved for an Order Establishing

Noticing Procedures in order to steam line the procedures aspects of service in the main proceeding and all related adversary proceedings. (ECF No. 4469). The Court entered the Order on December 5, 2011. (ECF No. 4560)

56. On October 28, 2011, the Court entered an Order Granting Supplemental

Authority To Stipulate To Extensions Of Time To Respond And Adjourn Pre-Trial Conferences to March 16, 2012. (ECF No. 4483). Thereafter, on January 30, 2012, a supplemental Order was entered granting authority to extend time to respond to the complaint and adjourn the pre- trial conferences through September 14, 2012. (ECF No. 4483).

57. During this Compensation Period, the Trustee and B&H attorneys conducted

conflict checks.

58. The Trustee and B&H attorneys implemented and managed case-wide tracking

tools for pleadings, subpoenas, demand letters, responses, and all other case-related documents.

59. The Trustee and B&H attorneys created protocols relating to discovery, filings,

and external communications.

60. The Trustee and B&H attorneys implemented and managed work flows between

B&H and Consultants.

61. The Trustee and B&H attorneys oversaw administrative aspects of the retention of

experts, other professionals, and vendors, and monitored their ongoing activities.

62. The Trustee and B&H attorneys calendared and docketed all hearings, return

dates, and deadlines in the main liquidation proceeding and all other litigations.

63. The Trustee and B&H attorneys monitored and tracked dockets of related proceedings.

64. The Trustee and B&H attorneys managed and monitored staffing needs.

viii. Task Code 09: Banks

65. Primarily as a result of international and domestic feeder fund investigations, the

Trustee commenced investigations of numerous banks and other financial institutions involved

with BLMIS. Time categorized under this task code relates to the investigation of target banks

and the roles played by the banks in the Ponzi scheme, the preparation of letters of inquiry and

subpoenas, the review of responses to letters and subpoenas received from such banks and other

third parties, and the preparation of pleadings relating to claims that will be brought against such

banks. Separate matter numbers have been assigned to banks sued by the Trustee.

ix. Task Code 10: Court Appearances4

66. This category relates to time spent by the Trustee and B&H attorneys making

court appearances in this Court, other federal courts within the Second Circuit, and various

courts abroad.

x. Task Code 11: Press Inquiries and Responses

67. This category relates to time spent by the Trustee, B&H attorneys, and

paraprofessionals in responding to press inquiries, preparing and issuing press releases, and

preparing for and holding press conferences relating to BLMIS, Madoff, customer claims, and

the recovery of funds.

xi. Task Code 12: Document Review

68. This category relates to time spent by the Trustee and B&H attorneys reviewing

documents received from parties and third parties in response to the hundreds of letters and

subpoenas issued by the Trustee.

xii. Task Code 13: Depositions and Document Productions by the Trustee

69. This category relates to time spent by the Trustee and B&H attorneys conducting

depositions and preparing and responding to discovery requests issued in the ongoing litigations

and by various third parties.

70. On August 5, 2011, the Trustee and B&H moved for a Report and

Recommendation to the District Court for the Appointment of Special Discovery Masters (the

“Masters”). (ECF No. 4290). The Trustee sought an expansion of access to Data Room 1 for all adversarial proceeding defendants, the creation of Data Room 2 for documents produced by third

4 Many attorneys making court appearances bill their time for appearances to either Task Code 02 – Bankruptcy Court Litigation, or to the matter number that relates to that specific litigation, rather than to Task Code 10.

parties, and the appointment of two Masters to assist in resolving the numerous discovery

disputes currently and potentially arising in the adversary proceedings. A hearing on the motion

was held on December 21, 2011. At the hearing, the Judge requested that the Trustee bifurcate

the requested relief into separate motions, resolve any outstanding objections, and re-submit the papers. On January 4, 2012, the Trustee filed a motion on presentment to expand access to Data

Room 1 to all defendants. (ECF No. 4613). That motion was granted on January 12, 2012.

(ECF No. 4624).

71. During this Compensation Period, the Trustee and B&H attorneys prepared, reviewed, finalized, and served subpoenas.

72. The Trustee and B&H attorneys monitored subpoenas issued and documents produced in response, and followed up regarding deficient document productions.

73. The Trustee and B&H attorneys prepared, reviewed, finalized, and served initial disclosures, case management plans, and motions for filing with the Bankruptcy Court to implement case-wide discovery procedures.

74. The Trustee and B&H attorneys prepared, reviewed, finalized, and served

discovery requests.

75. The Trustee and B&H attorneys processed, uploaded, and analyzed incoming

document productions.

76. The Trustee and B&H attorneys responded to discovery requests served on the

Trustee by defendants and third parties.

77. The Trustee and B&H attorneys addressed the issue of de-designating confidential

documents for production.

78. The Trustee and B&H attorneys analyzed, tracked, and processed BLMIS data.

79. The Trustee and B&H attorneys coordinated with the Trustee’s expert witnesses

to prepare for trial.

80. The Trustee and B&H attorneys researched foreign jurisdiction discovery laws.

81. The Trustee and B&H attorneys oversaw work performed by the Trustee’s

vendors.

xiii. Task Code 14: International

82. The fraud Madoff perpetrated through BLMIS has many international

implications, involving foreign individuals, feeder funds, and international banking institutions.

The Trustee is actively investigating and seeking to recover assets for the BLMIS estate in many

different jurisdictions, including Austria, the Bahamas, Bermuda, the British Virgin Islands

(“BVI”), Canada, the Cayman Islands, England, France, Gibraltar, Ireland, Israel, Liechtenstein,

Luxembourg, Spain, and Switzerland. These investigations utilize a combination of voluntary

requests for information and the use of the Trustee’s subpoena power. This category relates to the ongoing investigation, the preparation and service of subpoenas against entities in many jurisdictions, and communication with International Counsel regarding the utilization of local

laws to obtain necessary discovery and pursue recovery of customer property in foreign jurisdictions. The investigation is made challenging by the broad array of anti-discovery laws, bank secrecy statutes, and other foreign legislation designed to limit discovery. In addition, time

categorized by this task code relates to the participation in and monitoring of various BLMIS-

related third party actions brought in Europe and the Caribbean.

xiv. Task Code 15: Charities

83. This category relates to reviewing financial documents and conducting due

diligence of charitable accounts held at BLMIS, corresponding and meeting with the

representatives of these charities to obtain further information concerning transfers from their

BLMIS accounts and discussing settlement and resolution of issues.

xv. Task Code 19: Non-Bankruptcy Litigation

84. This matter categorizes time spent by the Trustee and B&H attorneys on non-

bankruptcy litigation, as well as time spent on Picard v. Canavan, Adv. Pro. No. 10-3200

(Bankr. S.D.N.Y.) (BRL), an adversary proceeding commenced by the Trustee against three

BLMIS claimants and the related Application for a Temporary Restraining Order, Enforcement of the Automatic Stay, and a Preliminary Injunction. During the last compensation period, B&H attorneys adjourned the pre-trial conference in Canavan and the hearing on the preliminary injunction and cross motion, which is currently scheduled to be held on January 10, 2013. In addition, the Trustee and B&H attorneys spent time investigating an action purportedly

commenced against the Trustee in Marin County Superior Court as well as litigation in Delaware

Bankruptcy Court where BLMIS was named as a defendant.

xvi. Task Code 20: Governmental Agencies

85. This matter categorizes time spent by the Trustee and B&H attorneys responding to requests for information by the Office of the United States Attorney for the Southern District of New York, the Internal Revenue Service, various congressional Representatives, and other government agencies.

86. In addition, the Trustee and B&H attorneys have spent considerable time cooperating with the GAO and responding to the GAO’s requests for information.

xvii. Task Code 21: Allocation

87. This matter categorizes time spent by the Trustee and B&H attorneys

coordinating the distribution of Customer Property after the Court granted the First Allocation

Motion.

88. The ultimate purpose of protecting and recovering the Customer Fund is to

distribute those monies, as SIPA directs, to BLMIS customers with allowed claims.

89. On May 4, 2011, the Trustee sought entry of an order approving an initial

allocation of property to the Customer Fund, and authorizing an interim distribution to customers

whose claims have not been fully satisfied because their net equity claims as of the filing date

exceeded the statutory SIPA protection limit of $500,000 (the “First Allocation Motion”). The

Allocation Motion was unopposed, and the Court entered the Order Approving the Trustee’s

Initial Allocation of Property to the Fund of Customer Property and Authorizing An Interim

Distribution to Customers on July 12, 2011.

90. On October 5, 2011, the Trustee distributed to BLMIS customers approximately

$325 million—more than the amount initially approved by the Court—relating to 1,232 BLMIS

accounts. Thirty-nine payments went to claimants who qualified for hardship status under the

Trustee’s Hardship Program whose claims had not been previously satisfied.

91. The Trustee and B&H attorneys responded to customer inquiries, coordinated the

allocation of settlement recoveries accomplished after the Court granted the First Allocation

Motion to the fund of Customer Property, established the payor bank account and transferred

funds thereto, and engaged in other related activities to effectuate the distribution of

approximately $325 million on October 5, 2011.

92. On July 26, 2012, the Trustee filed a motion for a second allocation and second

interim distribution, which will be the subject of future fee applications.

B. MATTER 03 – CHAIS

93. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the

avoidance action against Stanley Chais, Pamela Chais, and a number of related entities

(collectively, the “Chais Defendants”) seeking the return of more than $1.1 billion under SIPA,

the Bankruptcy Code, the New York Fraudulent Conveyance Act, and other applicable laws, for

preferences, fraudulent conveyances, and damages in connection with certain transfers of

property by BLMIS to or for the benefit of the Chais Defendants. Picard v. Stanley Chais, et al.,

Adv. Pro. No. 09-01172 (Bankr. S.D.N.Y.) (BRL).

94. In addition to the tasks outlined above, during this Compensation period, B&H attorneys met and conferred with defense counsel regarding discovery and other issues. B&H attorneys drafted discovery requests. On January 4, 2012, B&H attorneys filed an application with the Bankruptcy Court to enforce the automatic stay and enjoin certain state court actions brought by investors of Stanley Chais in California and by the California Attorney General.

C. MATTER 04 – MERKIN

95. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against Gabriel Capital, L.P., Ariel Fund, Ltd., Ascot Partners, L.P., Gabriel

Capital Corporation (together, the “Merkin Funds”), and J. Ezra Merkin (collectively, the

“Merkin Defendants”) seeking the return of more than $557 million under SIPA, the Bankruptcy

Code, the New York Fraudulent Conveyance Act, and other applicable law for preferences and fraudulent conveyances in connection with certain transfers of property by BLMIS to or for the benefit of the Merkin Defendants. Picard v. J. Ezra Merkin, et al., Adv. Pro. No. 09-01182

(Bankr. S.D.N.Y.) (BRL). With leave of the Court, the Trustee filed a second amended complaint on December 23, 2009 asserting Merkin’s personal liability for obligations of the partnerships.

96. In addition to the tasks outlined above, during this Compensation period, B&H attorneys continued to monitor arbitrations and related lawsuits seeking to confirm arbitration judgments. After a pretrial conference in November 2011, the court issued an order in December

2011 requiring defendants to produce various transcripts from various arbitrations in which they

participated. The team also prepared for and conducted four depositions of defendants’

employees and third party witnesses, and continued to review and catalogue additional

documents obtained from defendants and third parties.

D. MATTER 05 – CUSTOMER CLAIMS

i. Customer Claims

97. During the Compensation Period, the Trustee allowed $332,770,547.82 in

customer claims. This brings the total amount of allowed claims as of January 31, 2012 to

$7,293,561,610.12. The Trustee has paid or committed to pay approximately $798.4 million in

cash advances from SIPC. This is the largest commitment of SIPC funds of any SIPA

liquidation proceeding and exceeds the total aggregate payments made in all SIPA liquidations to

98. During the Compensation Period, the Trustee reduced claims by approximately

$5,339,110.52.

99. As of January 31, 2012, there were 247 claims relating to 194 accounts that are

“deemed determined,” meaning that the Trustee has instituted litigation against those

accountholders and related parties. The complaints filed by the Trustee in those litigations set

forth the express grounds for disallowance of customer claims under section 502(d) of the

Bankruptcy Code. Accordingly, such claims will not be allowed until the avoidance actions are

resolved by settlement or otherwise and the judgments rendered against the claimants in the

avoidance actions are satisfied. Of the 16,519 claims received by the Trustee, only two remain

undetermined and are under review by the Trustee and Counsel.

ii. General Creditor Claims

100. As of January 31, 2012, the Trustee had received 427 timely and 21 untimely filed

secured and unsecured priority and non-priority general creditor claims totaling approximately

$1.7 billion. The claimants include vendors, taxing authorities, employees, and customers filing

claims on non-customer proof of claim forms. Of these 448 claims and $1.7 billion, the Trustee

has received 94 general creditor claims and 49 broker-dealer claims totaling approximately

$264.9 million. At this time, the BLMIS estate has no funds from which to make distributions to

priority/non-priority general creditors and/or broker dealers.

iii. The Trustee Has Kept Customers Informed Of The Status Of The Claims Process

101. Throughout the liquidation proceeding, the Trustee has kept customers, interested

parties, and the public informed of his efforts by maintaining the Trustee Website,

www.madofftrustee.com, a toll-free customer hotline, conducting a Bankruptcy Code § 341(a)

meeting of creditors on February 20, 2009, and responding to the multitude of phone calls, e-

mails, and letters received on a daily basis, both from claimants and their representatives.

102. The Trustee Website includes features that allow the Trustee to share more

information with claimants, their representatives, and the general public with regard to the

ongoing recovery efforts and the overall liquidation. In addition to containing the Trustee’s court

filings, media statements, and weekly information on claims determinations, the Trustee Website

now includes up-to-date information on the status of Customer Fund recoveries, an “Ask the

Trustee” page where questions of interest are answered and updated, a letter from the Chief

Counsel to the SIPA Trustee on litigation matters, a detailed distribution page, an FAQ’s page,

and a timeline of important events. The Trustee Website is monitored and updated on a daily

basis. Public response to the upgrades performed on the Trustee Website has been

positive. Monthly visits nearly tripled at the end of the first quarter in 2012, compared to the end

of the fourth quarter of 2011, and the number of hits and repeat visitors to the Trustee Website

have both more than doubled in the same period.

103. In addition, the Trustee Website allows claimants to e-mail their questions

directly to the Trustee’s professionals, who follow up with a return e-mail or telephone call to the

claimants. As of January 31, 2012, the Trustee and his professionals had received and responded to more than 6,181 e-mails from BLMIS customers and their representatives via the Trustee

Website.

104. The toll-free customer hotline provides status updates on claims and responses to claimants’ questions and concerns. As of January 31, 2012, the Trustee, B&H, and the Trustee’s professionals had fielded more than 7,615 hotline calls from claimants and their representatives.

105. The Trustee and his team have endeavored to respond in a timely manner to every customer inquiry and ensure that the customers are as informed as possible about various aspects of the BLMIS proceeding.

106. The Trustee and B&H attorneys continued the Trustee’s Hardship Program, reviewed Hardship Applications, and communicated regularly with the Trustee, SIPC, and

AlixPartners regarding the review and determination of Hardship applicants.

107. The Trustee and B&H attorneys reviewed customer accounts and communicated with customers or their representatives regarding possible settlements related to those accounts.

108. The Trustee and B&H attorneys communicated regularly with SIPC and

AlixPartners regarding the customer claims review process, the customer claims database, reconciliation of IA accounts, and other matters of interest in determining claims.

E. MATTER 06 – VIZCAYA

109. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against Vizcaya Partners Limited (“Vizcaya”) and Banque Jacob Safra

(Gibraltar) Ltd. (“Bank Safra”) (collectively, the “Vizcaya Defendants”) seeking the return of

$150 million under SIPA, the Bankruptcy Code, the New York Fraudulent Conveyance Act, and

other applicable law for preferences, fraudulent conveyances, and damages in connection with

certain transfers of property by BLMIS to or for the benefit of the Vizcaya Defendants. Picard

v. Vizcaya Partners Limited, et al., Adv. Pro. No. 09-01154 (Bankr. S.D.N.Y.) (BRL). The

Trustee amended the complaint to add as additional defendants Asphalia Fund Ltd. (“Asphalia”),

Zeus Partners Ltd. (“Zeus”), and Siam Capital Management (“Siam”) seeking the return of an

additional $30 million in fraudulent transfers.

110. During this Compensation Period, B&H attorneys coordinated service of a

protective action to preserve the Trustee’s right to sue the Vizcaya Defendants, Asphalia, Zeus,

Siam, Banque J. Safra (Suisse) SA, and Pictet et Cie in Gibraltar for $180 million in transfers

received from BLMIS.

F. MATTER 07 – MADOFF FAMILY

111. This matter encompasses time spent by B&H attorneys pursuing numerous

avoidance actions against members of the Madoff family. On October 2, 2009, the Trustee filed a Complaint against Peter B. Madoff, Andrew H. Madoff, the late Mark D. Madoff, and Shana

D. Madoff (collectively, the “Family Defendants”) asserting claims for preferences, fraudulent conveyances, and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Family Defendants. Picard v. Peter B. Madoff, Adv. Pro. No. 09-01503

(Bankr. S.D.N.Y.) (BRL). On March 15, 2010, each of the defendants separately moved this

Court to dismiss the Trustee’s complaint. On September 22, 2011, this Court denied in part and granted in part the motions to dismiss. (ECF No. 55). Defendant Andrew Madoff, individually, and as Executor of the Estate of Mark D. Madoff, filed a motion for leave to seek interlocutory review of the Bankruptcy Court’s September 22, 2011 decision. Following briefing and oral argument, the District Court denied that motion on December 22, 2011. (ECF No. 74).

112. In accordance with the Bankruptcy Court’s September 22, 2011 decision, on

November 7, 2011, the Trustee filed an Amended Complaint against the Family Defendants,

identifying additional transfers to seek the return of over $225 million under SIPA, the

Bankruptcy Code, the New York Fraudulent Conveyance Act, and other applicable law, for

property by BLMIS to or for the benefit of the Family Defendants. Shana Madoff, Peter Madoff,

and Andrew Madoff, both on his own behalf and as executor of the estate of Mark D. Madoff,

each answered the Amended Complaint on January 17, 2012.

113. On December 23, 2011, the Trustee filed a motion seeking leave to file a Second

Amended Complaint, adding additional claims and defendants to the action against the Family

Defendants. On April 4, 2012, following briefing and oral argument, the Bankruptcy Court

issued a Written Opinion denying in part and granting in part the Trustee’s motion (ECF No.

114. The Trustee commenced two adversary proceedings against members of Andrew

Madoff and the late Mark Madoff’s families to recover fraudulent conveyances made by Bernard

and Ruth Madoff. Picard v. Stephanie S. Mack, Adv. Pro. No. 10-05328 (Bankr. S.D.N.Y.)

(BRL); Picard v. Deborah Madoff, Adv. Pro. No. 10-05332 (Bankr. S.D.N.Y.) (BRL). Amended

Complaints were filed in these actions on February 7, 2012. All defendants in both actions

answered on March 23, 2012. Deborah Madoff also moved to withdraw the reference from the

Bankruptcy Court on April 2, 2012. That motion is currently pending before the District Court.

The pre-trial conferences in these cases are scheduled for August 22, 2012.

115. The Trustee commenced two adversary proceedings against foundations created

by and named for Andrew and the late Mark Madoff, and their spouses: Picard v. Mark &

Stephanie Madoff Foundation, Adv. Pro. No. 10-05325 (Bankr. S.D.N.Y.) (BRL); and Picard v.

The Deborah and Andrew Madoff Foundation, Adv. Pro. No. 10-05330 (Bankr. S.D.N.Y.)

(BRL). The defendants in these cases have answered, and the pre-trial conferences are scheduled for August 22, 2012.

116. Finally, the Trustee instituted various proceedings against relatives of Bernard

Madoff beyond his immediate family to recover preferences and fraudulent conveyances.

Currently, the Trustee’s cases styled Picard v. Wiener Family Limited Partnership, Adv. Pro.

No. 10-04323 (Bankr. S.D.N.Y.), Picard v. NTC & Co. LLP, Adv. Pro. No. 10-04293 (Bankr.

S.D.N.Y.), and Picard v. Schaum & Wiener Profit Sharing Plan & Trust FBO Martin Schaum,

Adv. Pro. No. 10-04329 (Bankr. S.D.N.Y.) remain pending.

G. MATTER 08 – NORMAN LEVY

117. In January 2010, the Trustee reached a $220 million settlement agreement (the

“Norman Levy Settlement”) with Jeanne Levy-Church and Francis N. Levy (collectively, the

“Levys”) to settle the Trustee’s potential litigation claims against them regarding certain

accounts held by the Levys and their family members. This Court approved the Norman Levy

Settlement by Order on February 18, 2010. Exactly one year later, certain BLMIS claimants

moved pursuant to Rule 60(b) of the Federal Rules of Civil Procedure to set aside the Norman

Levy Settlement. The Court denied the motion on March 30, 2011, and the claimants appealed

to the District Court.

118. During this Compensation Period, B&H attorneys drafted an opposition to the

appeal of the Levy Settlement. No. 11 Civ. 3313 (S.D.N.Y.) (DAB). The order of the

Bankruptcy Court was affirmed by the District Court on February 16, 2012. No. 11 Civ. 3313

(S.D.N.Y.) (DAB) (ECF No. 22).

119. After the end of the Compensation Period, the claimants appealed the District

Court’s February 16, 2012 order. No. 12-816 (2d Cir.) This matter is currently pending before the Second Circuit Court of Appeals. Briefing will extend through Fall 2012.

H. MATTER 09 – FAIRFIELD GREENWICH

120. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance and recovery action against Fairfield Sentry Limited, Fairfield Sigma Limited,

Fairfield Lambda Limited (collectively the “Fairfield Funds”), Greenwich Sentry Limited, L.P.,

Greenwich Sentry Partners, L.P. (collectively, the “Greenwich Funds”), and other defendants seeking the return of approximately $3.5 billion under SIPA, the Bankruptcy Code, the New

York Fraudulent Conveyance Act, and other applicable law for preferences, fraudulent conveyances, and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Fairfield Funds and the Greenwich Funds. Picard v. Fairfield Sentry Limited

(In Liquidation), et al., Adv. Pro. No. 09-01239 (Bankr. S.D.N.Y.) (BRL). This matter also categorizes time spent by the Trustee and B&H attorneys pursuing avoidance and recovery actions as well as damages claims against other Fairfield Greenwich Group related entities and individuals, including the founding partners and other management officials.

121. On June 7, 2011, this Court conditionally approved a settlement agreement between the Trustee and the Joint Liquidators for Fairfield Sentry Limited, Fairfield Sigma

Limited, and Fairfield Lambda Limited (collectively, the “Fairfield Funds”). Picard v. Fairfield

Sentry et al., Adv. Pro. No. 09-1239 (Bankr. S.D.N.Y.) (BRL) (ECF No. 95). On July 13, 2011, the Court entered consent judgments between the Trustee and Fairfield Lambda Limited in the amount of $52.9 million (ECF No. 108), Fairfield Sentry Limited in the amount of $3.054 billion

(ECF No. 109), and Fairfield Sigma Limited in the amount of $752.3 million (ECF No. 110).

One objection was filed by plaintiffs in a derivative action allegedly on behalf of Fairfield Sentry

Limited, which was overruled by this Court on June 7, 2011. (ECF. No. 92).

122. Under the terms of this settlement, Fairfield Sentry Limited agreed to permanently

reduce its net equity claim from approximately $960 million to $230 million. Additionally, the

Joint Liquidator for the Fairfield Funds agreed to make a $70 million payment to the Customer

Fund. To date, the Fairfield Sentry Joint Liquidators have paid $24 million, of which $16

million was in cash and the $8 million balance was an offset against funds owed by the Trustee

to Fairfield Sentry. The Joint Liquidator also agreed to assign to the Trustee all of the Fairfield

Funds’ claims against the Fairfield Greenwich Group management companies, officers, and

partners; the Trustee retained his own claims against the management defendants. Further, the

Trustee and the Liquidators agreed to share future recoveries in varying amounts, depending on

the nature of the claims. On or about July 8, 2011, Fairfield Sentry transferred $16 million to the

Trustee, and the Trustee allowed Fairfield Sentry’s claim of $78 million. When the remaining

$46 million is paid, the Trustee will increase the allowed claim by $152 million to $230 million.

123. On July 7, 2011, this Court approved a settlement between the Trustee,

Greenwich Sentry, L.P. and Greenwich Sentry Partners, L.P. (collectively, the “Greenwich

Funds”), wherein this Court entered judgment against Greenwich Sentry, L.P. in an amount over

$206 million and against Greenwich Sentry Partners, L.P. in an amount over $5.9 million.

Picard v. Fairfield Sentry et al., Adv. Pro. No. 09-01239 (Bankr. S.D.N.Y.) (BRL) (ECF No.

107). Three objections were filed to the proposed settlement agreement, but were subsequently

withdrawn prior to this Court’s July 7, 2011 Order. In this settlement, the Greenwich Funds

agreed to permanently reduce their net equity claim from approximately $143 million to

approximately $37 million, for a combined reduction of over $105.9 million. Additionally, the

Greenwich Funds assigned to the Trustee all of their claims against Fairfield Greenwich Group

management, and agreed to share with the Trustee any recoveries they receive against service

providers.

124. To implement this settlement agreement, the Court was required to confirm the

plan in the jointly administered Chapter 11 proceeding of Greenwich Sentry, L.P. and Greenwich

Sentry Partners, L.P. In re Greenwich Sentry, L.P. and Greenwich Sentry Partners, L.P., Adv.

Pro. No. 10-16229 (Bankr. S.D.N.Y.) (BRL). The plan confirmation hearing was held on

December 22, 2011. The plan was confirmed subject to the resolution of issues unrelated to the

settlement with the Trustee. Those matters have been resolved. The effective date of the plan was February 24, 2012. With the settlement becoming effective, claims against the Fairfield

Greenwich Group management have been assigned to the Trustee, Greenwich Sentry, and

Greenwich Sentry Partners, and the BLMIS customer claims have been allowed in the amount of

$35,000,000.00 and $2,011,304.00, respectively.

125. The Trustee engaged in settlement negotiations with the remaining defendants in

the Fairfield Sentry matter and entered into a stipulation setting a new schedule for the remaining

defendants to respond to the Amended Complaint.

I. MATTER 10 – HARLEY

avoidance action against Harley International (Cayman) Limited (“Harley”) seeking the return of

approximately $1.1 billion under SIPA, the Bankruptcy Code, the New York Fraudulent

Conveyance Act, and other applicable law for preferences, fraudulent conveyances, and damages

in connection with certain transfers of property by BLMIS to or for the benefit of Harley. Picard

v. Harley International (Cayman) Limited, Adv. Pro. No. 09-01187 (Bankr. S.D.N.Y.) (BRL).

Harley is in liquidation in the Cayman Islands.

127. In addition to the tasks outlined above, during this Compensation Period, the

Trustee and B&H attorneys continued to pursue collection on the summary and default

judgments entered against Harley by this Court on November 10, 2010, including preparing

complaints against subsequent transferees of the Harley transfers from BLMIS.

J. MATTER 11 – COHMAD SECURITIES CORPORATION

128. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against Cohmad Securities Corporation (“Cohmad”), the principals, certain employees of Cohmad, and their family members who held BLMIS IA accounts (collectively, the “Cohmad Defendants”) seeking the return of over $245 million under SIPA, the Bankruptcy

Code, the New York Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances, disallowance of any claims filed against the estate by the Cohmad Defendants, and

damages in connection with certain transfers of property by BLMIS to or for the benefit of the

Cohmad Defendants. Picard v. Cohmad Securities Corporation, et al., Adv. Pro. No. 09-01305

(Bankr. S.D.N.Y.) (BRL).

129. In addition to the tasks outlined above, during this Compensation Period, B&H

attorneys continued to move forward with discovery, both propounding demands and responding

to the demands of various defendants.

K. MATTER 12 – PICOWER

130. This matter categorizes time spent by the Trustee and B&H attorneys in

connection with the Trustee’s litigation and settlement with Jeffry M. Picower (“Picower”) and

Barbara Picower, both individually and as trustees for various foundations, and related entities

(collectively, the “Picower Defendants”). The Trustee’s lawsuit sought recovery of nearly $7

billion under SIPA, the Bankruptcy Code, the New York Fraudulent Conveyance Act, and other

applicable law for preferences, fraudulent conveyances, and damages in connection with certain

transfers of property by BLMIS to or for the benefit of the Picower Defendants. Picard v.

Picower, Adv. Pro. No. 09-01197 (Bankr. S.D.N.Y.) (BRL). Ultimately, the Trustee and the

United States Attorney’s Office for the Southern District of New York reached a settlement with

the Picower Defendants. On January 13, 2011, this Court entered an Order approving the

settlement entered into between the Trustee and Barbara Picower, as the executor of the estate of

Mr. Picower, and on behalf of other Picower Defendants, in which Ms. Picower agreed to

transfer $5 billion to the BLMIS estate for distribution by the Trustee in accordance with SIPA.

Ms. Picower also entered into an agreement with the U.S. Attorney’s office to forfeit $7.2 billion—$5 billion of which comprised her settlement with the Trustee, as well as an additional

$2.2 billion—all of which will ultimately be distributed to Madoff victims (the “Settlement

Order”) (ECF No. 43).

131. Fox, together with Susanne Stone Marshall (“Marshall”), appealed the Settlement

Order. (ECF Nos. 45, 49). Fox and Marshall had previously brought putative class actions

against the Picower Defendants in Florida that were enjoined by this Court in an order issued in

May 2010 (the “Injunction Order”) on the grounds, inter alia, that Fox and Marshall’s claims against the Picower Defendants were derivative and duplicative of the Trustee’s claims. Fox and

Marshall both appealed to the District Court, and in December 2011, after preparing and filing papers in opposition, counsel for the Trustee argued the appeal before the Honorable John G.

Koeltl of the United States District Court. On March 26, 2012, Judge Koeltl issued an Opinion and Order affirming the Settlement Order and the Injunction Order. In re Bernard L. Madoff,

2012 WL 990829 (S.D.N.Y. Mar. 26, 2012). Thereafter, counsel for Fox and Marshall again filed notices of appeal, this time to the Second Circuit, on or around April 24, 2012. See In re

Bernard L. Madoff, Nos. 10-4652 (ECF No. 47) (S.D.N.Y.), 11-1298 (ECF No. 19) (S.D.N.Y.),

and 11-1328 (ECF No. 17) (S.D.N.Y.). These appeals are currently pending and are subject to

further briefing.

132. The Forfeited Funds were released from escrow to the Trustee upon the entry of

the final, nonappealable order of forfeiture and were included in the Trustee’s motion for a

second allocation and second interim distribution.

L. MATTER 13 – KINGATE

avoidance action against Kingate Global Fund Ltd. and Kingate Euro Fund Ltd. (together, the

“Kingate Funds”) seeking the return of approximately $875 million under SIPA, the Bankruptcy

Code, the New York Fraudulent Conveyance Act, and other applicable law for preferences, fraudulent conveyances, and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Kingate Funds. On June 8, 2011, B&H attorneys prepared, filed, and served a third amended complaint, which added a number of additional foreign defendants, significantly expanding the case. Picard v. Federico Ceretti, et al., Adv. Pro. No. 09-01161

134. The Kingate Funds are currently in liquidation proceedings in the BVI and one of the foreign defendants, Kingate Management Limited, is currently in liquidation proceedings in

Bermuda.

135. The Kingate Funds and all other defendants have filed motions or joinders to the motions in the District Court to withdraw the reference from the Bankruptcy Court. The motions have been fully briefed.

136. B&H attorneys negotiated settlement terms with the liquidators for the Kingate

Funds that were subject to the sale of the SIPA claims. Subsequently, the Kingate Funds brought suit against Deutsche Bank Securities Inc. in connection with their attempts to fund the

settlement. Kingate Global Fund Ltd. v. Deutsche Bank Securities Inc., No. 11 Civ. 9364 (DB)

(S.D.N.Y.).

137. In addition to the tasks outlined above, the Trustee has extended the defendants’

time to respond to the third amended complaint while awaiting a determination from the District

Court with respect to the motions to withdraw the reference. The Trustee and B&H attorneys

continued to monitor third party actions filed against the Kingate Defendants and the liquidation

proceedings with respect to Kingate Management Limited. The Trustee also recently intervened

in an administrative action filed by certain of the foreign defendants in the BVI relating to

litigation funding. The Trustee’s intervention was resolved by consent agreement limiting the

use of defendants’ funds for litigation purposes to an amount certain.

M. MATTER 18 – THYBO

avoidance action against Thybo Asset Management Limited, Thybo Global Fund Limited, Thybo

Return Fund Limited, and Thybo Stable Fund Ltd. (collectively, the “Thybo Defendants”)

seeking the return of approximately $62 million under SIPA, the Bankruptcy Code, the New

York Fraudulent Conveyance Act, and other applicable law for preferences, fraudulent

conveyances, and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Thybo Defendants. On February 10, 2011, the Trustee filed an amended complaint objecting to Thybo Stable Fund’s $217 million customer claim. Picard v. Thybo Asset

Management Limited, et al., Adv. Pro. No. 09-01365 (Bankr. S.D.N.Y.) (BRL).

139. As with each of the matters in litigation, the Trustee and B&H attorneys conducted the tasks outlined above during this Compensation Period. On December 2, 2011,

B&H attorneys filed a supplemental memorandum of law in opposition to the Thybo

Defendants’ pending motion to dismiss. Also during this Compensation Period, a stipulation

was entered setting a briefing schedule to address the Thybo Defendants’ motion to withdraw the reference from the Bankruptcy Court.

N. MATTER 19 – RUTH MADOFF

140. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against Ruth Madoff seeking the return of approximately $44 million under

SIPA, the Bankruptcy Code, the New York Fraudulent Conveyance Act, and other applicable law for preferences, fraudulent conveyances, disallowance of Mrs. Madoff’s claims against the estate, imposition of a constructive trust, and damages in connection with certain transfers of property by BLMIS to or for the benefit of Mrs. Madoff. Picard v. Ruth Madoff, Adv. Pro. No.

09-01391 (Bankr. S.D.N.Y.) (BRL).

Trustee and B&H attorneys continued to grant Mrs. Madoff extensions of time to respond to the complaint.

O. MATTER 21 – AVOIDANCE ACTION LITIGATION

142. This matter categorizes time spent litigating the hundreds of avoidance actions

filed by the Trustee; coordinating service of process; preparing preservation letters and discovery

requests and reviewing produced documents; communicating formally and informally with

counsel for various defendants; reviewing Hardship Program applications; drafting extensions of

time to respond to various complaints and adjournments of pre-trial conferences; conducting

settlement negotiations and settling with various defendants; engaging in mediation with certain

defendants; developing legal strategies and witnesses that will be relevant to all actions;

implementing internal processes to track and manage the avoidance actions; and researching

various issues relating to and raised in such avoidance actions.

143. B&H attorneys also spent a substantial amount of time during this Compensation

Period opposing motions to withdraw the bankruptcy reference. As of January 31, 2012, certain

defendants to the Trustee’s avoidance actions filed one hundred and fifty two motions to

withdraw the reference. B&H attorneys participated in numerous chambers conferences to

establish briefing schedules; prepared, filed, and served eleven opposition briefs; reviewed and

addressed particular issues raised in ten reply briefs; and prepared for six oral arguments before

the district court. As of January 31, 2012, the Honorable Jed S. Rakoff issued at least two

memorandum orders to withdraw the bankruptcy reference in a total of six actions on October

13, 2011 and November 28, 2011.

P. MATTER 26 – RICHARD STAHL

144. This matter categorizes time spent by the Trustee and B&H attorneys on the

adversary proceeding commenced by the Trustee against Richard Stahl, Reed Abend, and other

third party plaintiffs (collectively, the “Stahl Plaintiffs”), and the Trustee’s related Application

for Enforcement of the Automatic Stay and a Preliminary Injunction (the “Stahl Application”) of

actions brought by the Stahl Plaintiffs against members of the Madoff family against whom the

Trustee has also brought suit. Picard v. Stahl, et al., Adv. Pro. No. 10-03268 (Bankr. S.D.N.Y.)

(BRL).

145. In a prior compensation period, the Bankruptcy Court entered an order granting

the Stahl Application (“Stahl Order”). Thereafter, several of the Stahl Plaintiffs appealed to the

District Court. During the current Compensation Period, the Trustee and B&H attorneys

completed briefings for the appeals pending before the District Court, and on November 17,

2011, counsel for the Trustee argued at a hearing before the Honorable Judge Alvin K.

Hellerstein in connection with the Stahl Plaintiffs’ appeals. Following argument, Judge

Hellerstein affirmed the Stahl Order from the bench (and thereafter entered an order on the

record in the Trustee’s favor). See Case Nos. 11 Civ. 02135, 11 Civ. 02246, and 11 Civ. 02392

(S.D.N.Y.) (AKH). The Stahl Plaintiffs then appealed the District Court’s decision to the

Second Circuit Court of Appeals under Case Nos. 11-5421 and 11-5428. During this

Compensation Period, B&H attorneys prepared designations to the joint appendix for the Circuit

Court appeals and entered into stipulated orders modifying the briefing schedule. These appeals remain active and subject to additional briefing.

Q. MATTER 27 – JP MORGAN CHASE

146. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the action against JPMorgan Chase & Co., JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, and J.P. Morgan Securities Ltd. (collectively, “JPMorgan”) seeking the return of approximately

$19 billion under SIPA, the Bankruptcy Code, the New York Fraudulent Conveyance Act, and

other applicable law for preferences, fraudulent conveyances, and damages in connection with

certain transfers of property by BLMIS to or for the benefit of JPMorgan Chase. Picard v.

JPMorgan Chase & Co., et al., Adv. Pro. No. 10-04932 (Bankr. S.D.N.Y.) (BRL).

attorneys prepared an appeal of the District Court’s decision dismissing the Trustee’s common

law claims against JPMC. Picard v. JPMorgan Chase & Co., 460 B.R. 84 (S.D.N.Y. 2011).

The appeal has been fully briefed and is now pending before the Second Circuit. The parties

stipulated to a stay of discovery pending the appeal.

R. MATTER 28 - WESTPORT

avoidance action against Robert L. Silverman (“Silverman”), Westport National Bank, a division

of Connecticut Community Bank, N.A. (“WNB”), and PSCC Services, Inc. seeking the return of

approximately $28 million under SIPA, the Bankruptcy Code, the New York Fraudulent

Conveyance Act, and other applicable law for fraudulent conveyances and damages in

connection with certain transfers of property by BLMIS to or for the benefit of Silverman, WNB,

and PSCC Services, Inc. Picard v. Robert L. Silverman, et al., Adv. Pro. No. 10-05418 (Bankr.

S.D.N.Y.) (BRL).

attorneys consented to extensions of time by which WNB must respond to the complaint to

September 14, 2012 and adjourned the pre-trial conference to September 20, 2012. In

furtherance of the Trustee’s claims against Silverman, WNB, and PSCC Services, Inc., B&H

attorneys continued to review and analyze documents obtained through pre-litigation discovery

and informal discovery. B&H attorneys also continued to monitor Silverman’s individual

chapter 11 bankruptcy case pending in the Bankruptcy Court for the District of Connecticut,

analyzed issues concerning the dischargeability of Silverman’s debt, and prepared motions to

extend the time to object to the dischargeability of those debts.

S. MATTER 29 – RYE/TREMONT

avoidance action against Tremont Group Holdings, Inc., Tremont Partners, Inc., Tremont

(Bermuda) Limited, Rye Select Broad Market Fund, and numerous other entities and individuals

(collectively, the “Tremont Funds”) seeking the return of approximately $2.1 billion under SIPA,

the Bankruptcy Code, the New York Fraudulent Conveyance Act, and other applicable law for

preferences and fraudulent conveyances in connection with certain transfers of property by

BLMIS to or for the benefit of the Tremont Defendants. Picard v. Tremont Group Holdings,

Inc., et al., Adv. Pro. No. 10-05310 (Bankr. S.D.N.Y.) (BRL).

151. In addition, on December 21, 2011, this Court approved a settlement between the

Trustee and more than a dozen domestic and foreign investment funds, their affiliates, and a

former chief executive associated with Tremont Group Holdings, Inc. (collectively, “Tremont”) in the amount of $1.025 billion. Picard v. Tremont Group Holdings, Inc., Adv. Pro. No. 10-

05310 (Bankr. S.D.N.Y.) (BRL) (ECF No. 38). In this settlement, Tremont agreed to deliver

$1.025 billion into an escrow account, which will ultimately be placed into the Customer Fund.

Upon the release of the settlement payments from the escrow account, the Trustee will allow certain customer claims related to Tremont. Two objections to the settlement agreement were filed by non-BLMIS customers, both of which were overruled by this Court. This Court entered

an Order Granting Trustee’s Motion for Entry of Order Approving Agreement (ECF No. 38).

152. Certain objectors filed an appeal of the Tremont settlement on September 30,

2011. See Irving H. Picard, Trustee for the Liquidation of Bernard L. Madoff Investment

Securities LLC v. Tremont Group Holdings, Inc., et al., No. 11 Civ. 7330 (S.D.N.Y.) (GBD)

(ECF No. 1). Thereafter, Tremont filed a motion to dismiss the appeal, which was subsequently

joined by motions filed by the Trustee and parties subject to the settlement. (ECF Nos. 4, 6, 8,

12, and 14). The non-BLMIS customers who commenced the appeal opposed the dismissal.

(ECF Nos. 15, 16). On June 27, 2012, Judge George B. Daniels of the District Court granted the

motion to dismiss the appeal, and judgment was entered on June 28. (ECF Nos. 35, 36).

T. MATTER 30 – HSBC

avoidance action against HSBC Bank plc, HSBC Securities Services (Luxembourg) S.A., eleven

other HSBC-entities (collectively, the “HSBC Defendants”), UniCredit S.p.A. and Pioneer

Alternative Investment Management Limited (together, “UCG/PIA”), dozens of feeder funds,

and individuals seeking the return of approximately $8.8 billion under SIPA, the Bankruptcy

Code, the New York Fraudulent Conveyance Act, and other applicable law for preferences, fraudulent conveyances, and damages in connection with certain transfers of property by BLMIS

to or for the benefit of the HSBC Defendants. Picard v. HSBC Bank plc, Adv. Pro. No. 09-

01364 (Bankr. S.D.N.Y.) (BRL).

attorneys extended the time for certain defendants to respond to the amended complaint and

coordinated service of process on numerous international defendants. B&H attorneys prepared

an opposition to the motions to dismiss filed by the thirteen HSBC-related defendants and,

separately, by UCG/PIA on May 3, 2011 in the District Court. No. 11 Civ. 763 and No. 11 Civ.

836 (S.D.N.Y.) (JSR). The District Court granted the motion on July 28, 2011, dismissing the

Trustee’s common law claims. Picard v. HSBC Bank plc, 454 B.R. 25, 37-38 (S.D.N.Y. 2011).

During this Compensation Period, B&H attorneys briefed the appeal, filing both their principal and reply briefs. Oral argument has not yet occurred and the appeal remains pending before the

Second Circuit.

155. During this Compensation Period, B&H attorneys also opposed motions to dismiss for lack of personal jurisdiction filed by various defendants that acted as service providers to the Alpha Prime fund and the Senator fund. After those motions were opposed, these defendants, Regulus, Carruba, Tereo and Alpha Prime Asset Management, all agreed to engage in jurisdictional discovery prior to the Court ruling on their motions. Jurisdictional discovery is underway and the motion to dismiss remains sub judice.

156. Finally, during this Compensation Period, the Trustee moved to stay proceedings

pending in the Cayman Islands against the Primeo Fund. That motion was not granted. The

proceedings against the Primeo Fund continue to move forward, with the first set of hearings on

preliminary issues scheduled for October 2012.

U. MATTER 31 – KATZ/WILPON

avoidance action against Saul B. Katz, in his individual capacity and as trustee of the Katz 2002

Descendants’ Trust, Fred Wilpon, in his individual capacity, as trustee of the Wilpon 2002

Descendants’ Trust, and as co-executor of the Estate of Leonard Schreier, and dozens of other

entities and individuals (collectively, the “Sterling Defendants”) seeking the return of approximately $1 billion in fraudulent transfers—which includes approximately $300 million in fictitious profits and $700 million in principal—under SIPA, the Bankruptcy Code, and the New

York Fraudulent Conveyance Act, and other applicable law for preferences, fraudulent conveyances and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Sterling Defendants. Picard v. Katz et al., Adv. Pro No. 10-05287 (Bankr.

S.D.N.Y.) (BRL). On September 27, 2011, the District Court dismissed the Trustee’s claims based on constructive fraud under the Bankruptcy Code, actual and constructive fraud under the

New York Debtor & Creditor Law, and for recovery of subsequent transfers pursuant to § 550 of the Code, holding that the “safe harbor” affirmative defense set forth in Bankruptcy Code

§ 546(e) is a bar—at the pleading stage—to those claims. Picard v. Katz, 462 B.R. 447

(S.D.N.Y. Sept. 27, 2011). This decision reduced the Trustee’s claims in the Katz-Wilpon

Action from approximately $1 billion to less than $400 million. In addition, in connection with

the Trustee’s fraudulent conveyance claims, the decision articulated a new heightened subjective

standard of “willful blindness” that appears to be akin to a “conscious avoidance” standard

derived from the criminal law context. Finally, the Court held as a matter of law that Bankruptcy

Code § 502(d) is “overridden” in a SIPA proceeding by SIPA §78fff-2(c)(3).

158. During this Compensation Period, B&H attorneys prepared a Motion requesting

the District Court to direct entry of final judgment under Federal Rule of Civil Procedure 54(b)

on Counts Two through Ten of the Amended Complaint and to certify to the Court of Appeals

under 28 U.S.C. § 1292(b) an interlocutory appeal of the Court’s rulings concerning “willful

blindness” with respect to the Trustee’s remaining claims, which was filed on October 9, 2011.

On January 17, 2012, the Court denied the Trustee’s motion to direct entry of final

judgment. B&H attorneys also prepared briefing on the proper calculation of the Katz-Wilpon

Defendants’ avoidance liability and the Trustee’s right to a jury followed; the Court granted the

Trustee’s request for a jury trial on November 23, 2011.

159. Preparation for trial, scheduled to commence March 19, 2012, continued during

this compensation period. B&H attorneys engaged in discovery from September 28, 2011 to

January 13, 2012. During the discovery period, counsel for the Trustee issued requests for

production to the Katz-Wilpon Defendants and twenty-six third parties for documents, receiving

and reviewing a total of over 130,000 documents. During the discovery period, the Katz-Wilpon

Defendants produced 75,000 documents and third parties produced 55,000 documents, which

were reviewed by the B&H attorneys during this Compensation Period. The parties also

conducted twenty-four depositions, including eight depositions of Katz-Wilpon Defendants or

their affiliates, four depositions of expert witnesses and twelve depositions of third-party

witnesses.

160. During the Compensation Period, B&H attorneys coordinated the preparation of

five expert reports for Steve Pomerantz, Bruce Dubinsky, Harrison J. Goldin, Lisa Collura and

Matthew Greenblatt, all of which were provided to the Katz-Wilpon Defendants on November

22, 2011. On January 26, 2012, the Katz-Wilpon Defendants moved to exclude expert witnesses

Harrison J. Goldin and Steve Pomerantz. That same day, the Trustee moved to exclude the Katz-

Wilpon Defendants’ expert witness John Maine. B&H attorneys also prepared opposition briefs

to the Katz-Wilpon Defendants’ motions to exclude during this Compensation Period.

161. On January 26, 2012, the Katz-Wilpon Defendants filed a Motion for Summary

Judgment on the Trustee’s remaining claims to which the B&H attorneys prepared a response, and the Trustee filed a Motion for Partial Summary Judgment with respect to fictitious profits.

162. Although it did not occur within this Compensation Period, the parties entered a final settlement agreement on April 13, 2012 that was ultimately approved by Judge Rakoff on

May 31, 2012.

V. MATTER 32 – UBS/LIF

163. This matter categorizes time spent by the Trustee and B&H attorneys pursuing bankruptcy and common law claims against UBS AG, UBS (Luxembourg) SA, UBS Fund

Services (Luxembourg) SA, and numerous other entities and individuals (collectively, the

“Luxalpha Defendants”) seeking the return of approximately $2 billion under SIPA, the

Bankruptcy Code, the New York Fraudulent Conveyance Act, and other applicable law for

property by BLMIS to or for the benefit of the Luxalpha Defendants. Picard v. UBS AG, et al.,

attorneys continued to coordinate service of process on the international defendants and to review produced documents. On August 1, 2011, the UBS Defendants moved to dismiss the complaint. No. 11 Civ. 04212 (S.D.N.Y.) (CM). On November 1, 2011, the District Court dismissed the common law claims, consistent with the JPMC decision. See Picard v. JPMorgan

Chase & Co., 460 B.R. 84 (S.D.N.Y. 2011). B&H attorneys prepared a brief to appeal this decision, which was filed in the Second Circuit on February 16, 2012.

165. In addition, this matter incorporates work related to an action brought in

Luxembourg by the Luxembourg liquidators of Luxalpha against Access Group, UBS, and the

directors of LuxAlpha. On May 12, 2010, three of the defendants named in the Luxembourg

action, Patrick Littaye, Pierre Delandmeter, and Access Management Luxembourg, named the

Trustee as a third party defendant in this action. During this Compensation Period, B&H

attorneys monitored the Luxembourg action against the Trustee and worked on preparing an

application to enjoin this action, which was filed on April 19, 2012.

166. This matter also incorporates time spent by the Trustee and B&H attorneys

pursuing the avoidance action against Luxembourg Investment Fund and Landmark Investment

Fund Ireland (together, the “LIF Defendants”), UBS entities, and other defendants seeking the return of approximately $555 million under SIPA, the Bankruptcy Code, the New York

Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances and damages

in connection with certain transfers of property by BLMIS. Picard v. UBS AG, et al., Adv. Pro.

No. 10-05311 (Bankr. S.D.N.Y.) (BRL).

167. During this Compensation Period, B&H attorneys granted the defendants several extensions to respond to the complaint. B&H attorneys also negotiated a tolling agreement and

dismissal of defendant Guillermo Morenés Maritategui, which was made effective on December

7, 2011.

W. MATTER 33 – NOMURA BANK INTERNATIONAL PLC

avoidance action against Nomura Bank International plc (“Nomura”) seeking the return of

Conveyance Act, and other applicable law for preferences, fraudulent conveyances, and damages

in connection with certain transfers of property by BLMIS to or for the benefit of

Nomura. Picard v. Nomura Bank International plc, Adv. Pro. No. 10-05348 (Bankr. S.D.N.Y.)

(BRL).

attorneys granted Nomura two extensions of time to respond to the complaint.

X. MATTER 34 - CITIBANK

avoidance action against Citibank, N.A., Citibank North America, Inc., and Citigroup Global

Markets Limited (collectively, “Citibank”) seeking the return of approximately $425 million

under SIPA, the Bankruptcy Code, the New York Fraudulent Conveyance Act, and other

applicable law for preferences and fraudulent conveyances in connection with certain transfers of property by BLMIS to or for the benefit of Citibank. Picard v. Citibank, N.A., et al., Adv. Pro.

No. 10-05345 (Bankr. S.D.N.Y.) (BRL).

171. During this Compensation Period, B&H attorneys and Citibank counsel agreed to

a new schedule to respond to the Defendants’ Motion to Dismiss. On November 1, 2011,

Citibank filed a Motion to Withdraw the Reference from the Bankruptcy Court. B&H attorneys

prepared and filed a response to the Citibank Motion to Withdraw the Reference.

Y. MATTER 35 - NATIXIS

avoidance action against Natixis, Natixis Corporate & Investment Bank (f/n/a Ixis Corporate &

Investment Bank), Natixis Financial Products, Inc., Bloom Asset Holdings Fund, and Tensyr

Limited (collectively, the “Natixis Defendants”) seeking the return of approximately $430

million under SIPA, the Bankruptcy Code, the New York Fraudulent Conveyance Act, and other

applicable law for preferences and fraudulent conveyances in connection with certain transfers of

property by BLMIS to or for the benefit of the Natixis Defendants. Picard v. Natixis, et al., Adv.

Pro. No. 10-05353 (Bankr. S.D.N.Y.) (BRL).

173. During this Compensation Period, B&H attorneys and the defendants entered into

a stipulation setting a new schedule for the briefing on the Natixis Defendants’ Motion to

Dismiss. On December 20, 2011, the Natixis Defendants filed a Motion to Withdraw the

Reference from the Bankruptcy Court. B&H attorneys began preparing a response to the Motion

to Withdraw the Reference.

Z. MATTER 36 – MERRILL LYNCH

avoidance action against Merrill Lynch International & Co. C.V. (“Merrill Lynch”) seeking the

return of at least $16 million under SIPA, the Bankruptcy Code, the New York Fraudulent

Conveyance Act, and other applicable law for preferences and fraudulent conveyances in

connection with certain transfers of property by BLMIS to or for the benefit of Merrill

Lynch. Picard v. Merrill Lynch International, Adv. Pro. No. 10-05346 (Bankr. S.D.N.Y.)

(BRL).

attorneys and Merrill Lynch stipulated to a schedule for Merrill Lynch to respond to the

Complaint and rescheduled the pre-trial conference.

AA. MATTER 37 – ABN AMRO

avoidance action against ABN AMRO Bank N.V. (presently known as The Royal Bank of

Scotland, N.V.) and ABN AMRO Incorporated (together, “ABN”), and Rye Select Broad Market

XL Fund, LP and Rye Select Broad Market XL Portfolio Limited (together, “Tremont XL

Funds”) seeking the return of approximately $671 million under SIPA, the Bankruptcy Code, the

New York Fraudulent Conveyance Act, and other applicable law for preferences and fraudulent

conveyances in connection with certain transfers of property by BLMIS to or for the benefit of

ABN and the Tremont XL Funds. Picard v. ABN AMRO Bank, N.A. (presently known as The

Royal Bank of Scotland, N.V.), Adv. Pro. No. 10-05354 (Bankr. S.D.N.Y.) (BRL).

177. During this Compensation Period, the Trustee and B&H attorneys began

responding to ABN’s Motion to Withdraw the Reference from the Bankruptcy Court.

178. During this Compensation Period, B&H attorneys engaged in settlement

negotiations with Rye Select Broad Market XL Portfolio, which resulted in a settlement that was

executed following the conclusion of the Compensation Period. Rye Select Broad Market XL

Portfolio’s Motion to Withdraw the Reference was stayed pursuant to the steps necessary to

effectuate the settlement with the Trustee.

BB. MATTER 38 – BANCO BILBAO

avoidance action against Banco Bilbao Vizcaya Argentaria, S.A. (“BBVA”) seeking the return of

Conveyance Act, and other applicable law for preferences and fraudulent conveyances in

connection with certain transfers of property by BLMIS to or for the benefit of BBVA. Picard v.

Banco Bilbao Vizcaya Argentaria, S.A., Adv. Pro. No. 10-05351 (Bankr. S.D.N.Y.) (BRL).

180. In addition to the tasks outlined above, during this Compensation Period, on

October 27, 2011, BBVA filed a Motion to Withdraw the Reference to the Bankruptcy Court.

B&H attorneys began the process of responding to the Motion to Withdraw the Reference. In

addition, B&H attorneys and BBVA entered into a stipulation rescheduling the briefing and

hearing on BBVA’s Motion to Dismiss the Complaint.

CC. MATTER 39 - FORTIS

avoidance action against ABN AMRO Bank (Ireland) Ltd. (f/k/a Fortis Prime Fund Solutions

Bank (Ireland) Ltd.), ABN AMRO Custodial Services (Ireland) Ltd. (f/n/a Fortis Prime Fund

Solutions Custodial Services (Ireland) Ltd.), Rye Select Broad Market XL Fund, LP, and Rye

Select Broad Market XL Portfolio Limited (collectively, the “Fortis Defendants”) seeking the return of approximately $267 million under SIPA, the Bankruptcy Code, the New York

Fraudulent Conveyance Act, and other applicable law for preferences and fraudulent conveyances in connection with certain transfers of property by BLMIS to or for the benefit of the Fortis Defendants. Picard v. ABN AMRO Retained Custodial Services (Ireland) Limited, et al., Adv. Pro. No. 10-05355 (Bankr. S.D.N.Y.) (BRL).

182. In addition to the tasks outlined above, during this Compensation Period, B&H attorneys drafted and filed responses to the Motions to Withdraw the Reference to the

Bankruptcy Court filed by the Fortis Defendants and Rye Select Broad Market XL. In addition,

B&H attorneys negotiated a settlement with defendant Rye Select Broad Market XL Portfolio subject to approval of the Grand Court of the Cayman Islands in the Rye Select Broad Market

XL Portfolio liquidation proceeding. As a result of the pending settlement, briefing on the Rye

Select Broad Market XL Portfolio Motion to Withdraw the Reference was stayed.

DD. MATTER 40 – MEDICI ENTERPRISE

183. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance and civil action against Sonja Kohn, Unicredit S.p.A. (“UniCredit”), and numerous other financial institutions, entities, and individuals (collectively, the “Kohn Defendants”) seeking the return of approximately $19.6 billion under SIPA, the Bankruptcy Code, the New

York Fraudulent Conveyance Act, the Racketeer Influenced and Corrupt Organizations Act, 18

U.S.C. §§ 1961, et seq., and other applicable law for preferences, fraudulent conveyances, and

Kohn Defendants. Picard v. Sonja Kohn, et al., Adv. Pro. No. 10-05411 (Bankr. S.D.N.Y.)

(BRL). This matter also covers work performed by B&H on the English matter MSIL v. Raven.

The liquidator of MSIL, with the assistance of B&H was able to obtain a worldwide freeze

against Sonja Kohn and certain of her entities in the amount of approximately £28 million.

184. In addition to the tasks outlined above, during this Compensation Period, B&H,

on behalf of the Trustee, joined the Austrian criminal proceedings against Sonja Kohn, Bank

Medici, and Bank Austria as a victim. The Trustee also assisted English counsel in drafting

arguments to allow the free flow of information relating to Sonja Kohn’s disclosure order. B&H

also continued investigating Sonja Kohn and her co-conspirators throughout Europe.

EE. MATTER 41 - WHITECHAPEL

avoidance action against Whitechapel Management Limited and Granadilla Holdings Limited

(together, the “Whitechapel Defendants”) seeking the return of approximately $10 million under

SIPA, the Bankruptcy Code, the New York Fraudulent Conveyance Act, and other applicable

law for fraudulent conveyances and damages in connection with certain transfers of property by

BLMIS to or for the benefit of the Whitechapel Defendants. Picard v. Whitechapel Management

Limited, et al., Adv. Pro. No. 10-05402 (Bankr. S.D.N.Y.) (BRL).

attorneys, through local counsel, obtained a disclosure order in the BVI seeking documents from

the registered agent for Granadilla Holdings Limited and reviewed the documents produced as a

result of that disclosure order. The pre-trial conference is scheduled for August 22, 2012.

FF. MATTER 42 - EQUITY TRADING

avoidance action against Equity Trading Portfolio Limited, Equity Trading Fund Limited, and

BNP Paribas Arbitrage (collectively, the “Equity Trading Defendants”) seeking the return of approximately $16 million under SIPA, the Bankruptcy Code, the New York Fraudulent

Conveyance Act, and other applicable law for fraudulent conveyances and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Equity

Trading Defendants. Picard v. Equity Trading Portfolio Limited, et al., Adv. Pro. No. 10-04457

188. The Equity Trading Defendants have filed motions or joinders to the motions in the District Court to withdraw the reference from the Bankruptcy Court. The District Court has included the motions in its orders for consolidated subject matter briefing and oral argument issued in May 2012.

189. In addition to the tasks outlined above, during this Compensation Period, B&H attorneys and the Equity Trading Defendants negotiated and entered into a stipulation whereby the Equity Trading Defendants accepted service of process, the Trustee was given the right to file an amended complaint, and a briefing schedule was established. The pre-trial conference is scheduled for August 22, 2012.

GG. MATTER 43 – DEFENDER

190. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against Defender Limited, Reliance Management (BVI) Limited, Reliance

Management (Gibraltar) Limited, Reliance International Research LLC, Tim Brockmann, and

Justin Lowe (collectively, the “Defender Defendants”) seeking the return of over $93 million

applicable law for fraudulent conveyances and damages in connection with certain transfers of

property by BLMIS to or for the benefit of the Defender Defendants. Picard v. Defender

Limited, et al., Adv. Pro. No. 10-05229 (Bankr. S.D.N.Y.) (BRL).

191. The Defender Defendants have filed motions in the District Court to withdraw the

reference from the Bankruptcy Court. The District Court has included the motions in its orders

for consolidated subject matter briefing and oral argument issued in May 2012.

192. Defendants Reliance Management (BVI) Limited, Reliance Management

(Gibraltar) Limited, and Tim Brockmann have filed motions in the bankruptcy court to dismiss

for lack of personal jurisdiction.

attorneys negotiated with the Defender Defendants to establish a briefing schedule for the

motions to dismiss and extensions of time to respond to the amended complaint. The pre-trial conference is scheduled for December 19, 2012.

HH. MATTER 44 – MACCABEE

194. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against John Greenberger Maccabee and Sherry Morse Maccabee Living Trust,

John Greenberger Maccabee, individually and as trustee of the John Greenberger Maccabee and

Sherry Morse Maccabee Living Trust, Sherry Morse Maccabee, individually and as trustee of the

John Greenberger Maccabee and Sherry Morse Maccabee Living Trust (collectively, the

“Maccabee Defendants”) seeking the return of approximately $1.5 million under SIPA, the

fraudulent conveyances and damages in connection with certain transfers of property by BLMIS

to or for the benefit of the Maccabee Defendants. Picard v. John Greenberger Maccabee and

Sherry Morse Maccabee Living Trust, et al., Adv. Pro. No. 10-05407 (Bankr. S.D.N.Y.) (BRL).

Maccabee Defendants moved to withdraw the bankruptcy reference, No. 11 Civ. 04937

(S.D.N.Y.) (JSR), and B&H attorneys prepared an opposition to the motion.

II. MATTER 45 – LEVEY

196. This matter reflects time invested by the Trustee and B&H attorneys pursuing four avoidance actions in which Joel Levey is a named defendant (collectively, the “Levey

Actions”). The Levey Actions are as follows: Picard v. Joel Levey, Adv. Pro. No. 10-04282

(Bankr. S.D.N.Y.) (BRL); Picard v. Aaron Levey Revocable Living Trust, et al., Adv. Pro. No.

10-04894 (Bankr. S.D.N.Y.) (BRL); Picard v. Aaron Levey Revocable Living Trust, et al., Adv.

Pro. No. 10-05441 (Bankr. S.D.N.Y.) (BRL); and Picard v. Frances Levey Revocable Living

Trust, et al., Adv. Pro. No. 10-05430 (Bankr. S.D.N.Y.) (BRL).

197. Together with Joel Levey, the other named defendants in the Levey Actions are as follows: Aaron Levey Revocable Living Trust; Frances Levey Revocable Living Trust; Wendy

Kapner Revocable Trust; Wendy Kapner; Sandra Moore; and James Kapner (collectively, the

“Levey Defendants”). The individual Levey Defendants were named in their various capacities, including as grantor, trustee, and/or beneficiary. The Levey Actions seek an aggregate recovery of approximately $6.8 million under SIPA, the Bankruptcy Code, the New York Debtor and

Creditor Law, and other applicable law for the recovery of avoidable transfers and damages related to transfers made by BLMIS to or for the benefit of the Levey Defendants.

198. During this Compensation Period, B&H attorneys communicated with counsel to the Levey Defendants regarding a global settlement of the Levey Actions. B&H attorneys continued reviewing and analyzing initial disclosures and interrogatories served on the Trustee by the Levey Defendants and began drafting responses to the interrogatories. B&H attorneys drafted interrogatories and served them on the Levey Defendants. B&H attorneys began drafting

document requests to be served on the Levey Defendants and initial disclosures to be served on

Joel Levey. B&H attorneys reviewed documents and the deposition testimony of Joel Levey,

and analyzed the possibility of naming additional subsequent transferee defendants in certain of

the Levey Actions.

JJ. MATTER 46 – GLANTZ

avoidance action against Richard M. Glantz, Elaine Ostrin, Jerald Ostrin, Scott Ostrin, Raleigh

Dow Buckmaster, Sr., Barbara Buckmaster, Raleigh Dow Buckmaster, Jr., Drew Buckmaster,

Owen Buckmaster, Joellen Buckmaster, Mirza Inayat Khan, Zia Inayat Khan, and numerous trusts and entities (collectively, the “Glantz Defendants”) seeking the return of more than $113 million under SIPA, the Bankruptcy Code, the New York Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Glantz Defendants. Picard v. Richard M. Glantz, et al., Adv. Pro. No. 10-05394 (Bankr. S.D.N.Y.) (BRL).

200. In addition to the tasks outlined above, during this Compensation Period, B&H attorneys have continued to grant the Glantz Defendants additional time to respond to the complaint. B&H attorneys engaged in settlement discussions and reviewed Hardship Program applications and related materials on behalf of several defendants. B&H attorneys entered into stipulations dismissing the action against four defendants based on settlement, and entered into a stipulation dismissing the action against one defendant based on a Hardship application.

KK. MATTER 47 – BONVENTRE

201. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against Daniel Bonventre and Barbara Bonventre (together, the “Bonventre

Defendants”) seeking the return of approximately $12.6 million under SIPA, the Bankruptcy

Code, the New York Fraudulent Conveyance Act, and other applicable law for fraudulent

conveyances and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Bonventre Defendants. Picard v. Daniel Bonventre, et al., Adv. Pro. No. 10-

04214 (Bankr. S.D.N.Y.) (BRL).

attorneys granted the Bonventre Defendants several extensions of time to respond to the

complaint up to and including December 27, 2012, as the action was stayed pending the criminal

case against Daniel Bonventre. See United States v. Bonventre, 10 Cr. 228 (S.D.N.Y.) (LTS).

B&H attorneys have received and reviewed the list of documents requested by the Bonventre

Defendants.

LL. MATTER 48 – BONGIORNO

203. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against Annette Bongiorno and Rudy Bongiorno (together, the “Bongiorno

Defendants”) seeking the return of approximately $22 million under SIPA, the Bankruptcy Code,

the New York Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances

and damages in connection with certain transfers of property by BLMIS to or for the benefit of

the Bongiorno Defendants. Picard v. Annette Bongiorno, et al., Adv. Pro. No. 10-04215 (Bankr.

S.D.N.Y.) (BRL).

204. The action was stayed through December 27, 2012 because of the pending

criminal case against Annette Bongiorno. See United States v. Bongiorno, 10 Cr. 228 (S.D.N.Y.)

(LTS).

MM. MATTER 49 – GREENBERGER

avoidance action against Robert and Phyllis Greenberger (together, the “Greenberger

Defendants”) seeking the return of over $500,000 under SIPA, the Bankruptcy Code, the New

York Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances and

Greenberger Defendants. Picard v. Robert and Phyllis Greenberger, Adv. Pro. No. 10-05408

206. On July 14, 2011, the Greenberger Defendants moved to withdraw the bankruptcy

reference, and B&H prepared an opposition to the motion. No. 11 Civ. 04928 (S.D.N.Y.) (JSR).

During Compensation Period, the Motion to Withdraw was pending.

207. This matter also incorporates time spent by the Trustee and B&H attorneys

pursuing the avoidance action against Michael Lieberbaum and Cynthia Lieberbaum (together,

the “Lieberbaum Defendants”) seeking the return of approximately $2.36 million under SIPA,

to or for the benefit of the Lieberbaum Defendants. Picard v. Michael Lieberbaum, et al., Adv.

208. In addition to the tasks outlined above, during this Compensation Period, in

November 2011, in the case against the Lieberbaum Defendants, B&H attorneys prepared and

served subpoenas duces tecum on third parties with knowledge and information relevant to the

case and in December 2011, B&H attorneys reviewed documents produced in response to those

subpoenas. B&H attorneys also took the depositions of third party witnesses with knowledge

relevant to the case in January 2012.

NN. MATTER 50 – PITZ

avoidance action against Enrica Cotellessa-Pitz and Thomas Pitz (together, the “Pitz

Defendants”) seeking the return of over $3 million under SIPA, the Bankruptcy Code, the New

York Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances and

Pitz Defendants. Picard v. Cotellessa-Pitz, et al., Adv. Pro. No. 10-04213 (Bankr. S.D.N.Y.)

(BRL).

attorneys engaged in settlement discussions with the Pitz Defendants. The adversary proceeding

was stayed up to and including August 22, 2012 because of the criminal case against Ms.

Cotellessa-Pitz. See United States v. Cotellessa-Pitz, 10 Cr. 228 (S.D.N.Y.) (LTS).

OO. MATTER 51 – CRUPI

avoidance action against Jo Ann Crupi, a former BLMIS employee, Judith Bowen, Debra E.

Guston, Guston & Guston, LLP, Pensco Trust Company, as former custodian of an Individual

Retirement Account for the benefit of Jo Ann Crupi, and numerous trusts (collectively, the

“Crupi Defendants”) seeking the return of over $8.7 million under SIPA, the Bankruptcy Code,

the New York Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances

and damages in connection with certain transfers of property by BLMIS to or for the benefit of

the Crupi Defendants. Picard v. Jo Ann Crupi, et al., Adv. Pro. No. 10-04216 (Bankr. S.D.N.Y.)

(BRL). The Trustee alleges, among other things, that Ms. Crupi, as an employee of BLMIS,

played a vital role in perpetuating the Ponzi scheme.

212. During the reporting period, the Trustee’s attorneys conducted further

investigation of defendants Debra Guston and Guston & Guston, LLP in connection with certain

transfers of property. As a result of the investigation, on December 8, 2011, B&H attorneys

negotiated dismissal without prejudice of defendants Debra Guston and Guston & Guston, LLP

from the adversary proceeding. While this matter was originally stayed because of the pending

criminal case against Jo Ann Crupi, this matter is now moving forward. See United States v.

Crupi, 10 Cr. 228 (S.D.N.Y.) (LTS). On December 28, 2011, Ms. Crupi and Ms. Bowen, on behalf of themselves and certain other defendants, filed an answer to the adversary complaint.

PP. MATTER 52 – DONALD FRIEDMAN

213. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against S. Donald Friedman, individually and in his capacity as a beneficiary of an individual retirement account, Saundra Friedman, Broadway-Elmhurst Co. LLC, and Ari

Friedman (collectively, the “Friedman Defendants”), seeking the return of more than $19 million under SIPA, the Bankruptcy Code, the New York Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Friedman Defendants. Picard v. Friedman, Adv.

214. In addition to the tasks outlined above, during this Compensation Period, B&H attorneys met and conferred with opposing counsel and continued discovery, including serving responses to document requests and interrogatories and contention-based interrogatories. B&H attorneys also reviewed documents responsive to Defendants’ document requests and made a document production. The pre-trial conference in this action is scheduled for June 27, 2012.

QQ. MATTER 53 – MAGNIFY

215. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against Magnify Inc., Premero Investments Ltd., Strand International

Investments Ltd., The Yeshaya Horowitz Association, Yair Green, Kurt Brunner, Osnat

Dodelson, Special Situations Cayman Fund LP, Express Enterprises Inc., R.H. Book LLC, and

Robert H. Book (collectively, the “Magnify Defendants”) seeking the return of over $154 million

applicable law for fraudulent conveyances and damages in connection with certain transfers of

property by BLMIS to or for the benefit of the Magnify Defendants. Picard v. Magnify Inc., et

al., Adv. Pro. No. 10-05279 (Bankr. S.D.N.Y.) (BRL).

attorneys continued their investigation of those Magnify Defendants located outside of the

United States. B&H attorneys researched and drafted an opposition to a motion filed by two

Magnify Defendants seeking to dismiss the amended complaint for lack of personal jurisdiction,

and prepared for oral argument which was originally scheduled for January 10, 2012. As to

those Magnify Defendants who answered the amended complaint, B&H attorneys met and

conferred with defense counsel regarding the Trustee’s claims and defendants’ potential

defenses.

RR. MATTER 54 – MENDELOW

avoidance action against Steven B. Mendelow, Nancy Mendelow, Cara Mendelow, Pamela

(Mendelow) Christian, C&P Associates, Ltd., and C&P Associates, Inc. (collectively, the

“Mendelow Defendants”) seeking the return of over $20 million under SIPA, the Bankruptcy

Code, the New York Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Mendelow Defendants. Picard v. Steven B. Mendelow, et al., Adv. Pro. No.

10-04283 (Bankr. S.D.N.Y.) (BRL).

218. The Mendelow Defendants moved to withdraw the reference, which was granted.

Previously, Mendelow moved in the Bankruptcy Court to enforce the automatic stay against a third-party action filed against him in the New York State Supreme Court. B&H attorneys

prepared and filed a response to Mendelow’s motion. The hearing was adjourned several times.

B&H attorneys also granted the Mendelow Defendants several extensions of time to respond to

the complaint pending the outcome of the motion and have monitored the developments in the

third party state court action.

SS. MATTER 55 – KUGEL

avoidance action against David L. Kugel, Phyllis Kugel, Craig Kugel, Heather Kugel, and

several partnerships, trusts and other entities (collectively, the “Kugel Defendants”) seeking the return of more than $22 million under SIPA, the Bankruptcy Code, the New York Fraudulent

Conveyance Act, and other applicable law for fraudulent conveyances and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Kugel

Defendants. Picard v. David L. Kugel, et al., Adv. Pro. No. 10-04217 (Bankr. S.D.N.Y.) (BRL).

220. In addition to the tasks outlined above, during this Compensation Period, B&H attorneys continued developing the Trustee’s case against the Kugel Defendants and consented to several extensions of time for the Kugel Defendants to respond to the complaint. On June 16,

2011, the Kugel Defendants moved to withdraw the bankruptcy reference, but withdrew their motion on September 14, 2011. No. 11 Civ. 04227 (S.D.N.Y.) (JSR). The Trustee dismissed the adversary proceeding against the Kugel Defendants with prejudice after David Kugel pled guilty to several federal crimes before the District Court in November 2011. See United States v.

Kugel, 10 Cr. 228 (S.D.N.Y.) (LTS).

TT. MATTER 56 – LIPKIN

221. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against Irwin Lipkin, Carole Lipkin, Eric Lipkin, Erika Lipkin, Marc Lipkin,

Russell Lipkin, Karen Yokomizo Lipkin, and other individuals (collectively, the “Lipkin

Defendants”) seeking the return of approximately $9 million under SIPA, the Bankruptcy Code, the New York Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances and damages in connection with certain transfers of property by BLMIS to or for the benefit of the Lipkin Defendants. Picard v. Irwin Lipkin, et al., Adv. Pro. No. 10-04218 (Bankr. S.D.N.Y.)

(BRL).

222. In addition to the tasks outlined above, during this Compensation Period, B&H attorneys granted certain Lipkin Defendants extensions of time to respond to the complaint. In

June 2011, defendant Eric Lipkin pled guilty to criminal charges. See United States v. Lipkin, 10

Cr. 228 (S.D.N.Y.) (LTS). For the remaining defendants, the pre-trial conference is scheduled to be held on December 19, 2012.

UU. MATTER 57 – PEREZ/O’HARA

223. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against Jerome O’Hara, Bernadette O’Hara, O’Hara Family Partnership,

Elizabeth Sarro, George Perez, and Jeanette Perez (collectively, the “Perez/O’Hara Defendants”) seeking the return of over $6 million under SIPA, the Bankruptcy Code, the New York

Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances and damages in connection with certain transfers of property by BLMIS to or for the benefit of the

Perez/O’Hara Defendants. Picard v. Jerome O’Hara, et al., Adv. Pro. No. 10-04272 (Bankr.

S.D.N.Y.) (BRL). The proceeding against Jerome O’Hara and George Perez was stayed through

September 14, 2012 because of the pending criminal cases against them. See United States v.

O’Hara, 10 Cr. 228 (S.D.N.Y.) (LTS); United States v. Perez, 10 Cr. 228 (S.D.N.Y.) (LTS).

VV. MATTER 58 – PJ ADMINISTRATORS

224. This matter categorizes time spent by the Trustee and B&H attorneys pursuing the avoidance action against American Securities Management, L.P., PJ Associates Group, L.P., and

numerous other individuals and entities (collectively, the “PJ Defendants”) seeking the return of

approximately $91 million, including approximately $10 million in fictitious profits under SIPA,

to or for the benefit of the PJ Defendants. Picard v. American Sec. Management, L.P., et al.,

attorneys granted the PJ Defendants extensions of time to respond to the complaint.

WW. MATTER 59 – STANLEY SHAPIRO

avoidance action against Stanley Shapiro, Renee Shapiro, David Shapiro, Rachel Shapiro, Leslie

Shapiro Citron, Kenneth Citron, and numerous trusts (collectively, the “Shapiro Defendants”)

seeking the return of over $61.7 million under SIPA, the Bankruptcy Code, the New York

Fraudulent Conveyance Act, and other applicable law for fraudulent conveyances and damages

in connection with certain transfers of property by BLMIS to or for the benefit of the Shapiro

Defendants. Picard v. Stanley Shapiro, et al., Adv. Pro. No. 10-05383 (Bankr. S.D.N.Y.) (BRL).

attorneys continued to develop the Trustee’s case against the Shapiro Defendants and consented

to several extensions of time for the Shapiro Defendants to respond to the complaint. B&H

attorneys also argued the Trustee’s opposition to the Shapiro Defendants’ motion to withdraw

the bankruptcy reference before the District Court. No. 11 Civ. 05835 (S.D.N.Y.) (JSR). The

reference to the bankruptcy court was withdrawn on several issues on February 29, 2012.

XX. MATTER 60 – AVELLINO & BIENES

avoidance action against Avellino & Bienes, Frank J. Avellino, Michael S. Bienes, Nancy C.

Avellino, Dianne K. Bienes, Thomas G. Avellino, and numerous other trusts and entities

(collectively, the “A&B Defendants”) seeking the return of over $904 million under SIPA, the

to or for the benefit of the A&B Defendants. Picard v. Frank J. Avellino, et al., Adv. Pro. No.

10-05421 (Bankr. S.D.N.Y.) (BRL).

229. On June 6, 2011, certain A&B Defendants moved to dismiss the complaint in the

Bankruptcy Court. On June 7, 2011, certain A&B Defendants moved to withdraw the reference

from Bankruptcy Court. No. 11 Civ. 03882 (S.D.N.Y.) (JSR). The motion to withdraw the

reference was fully briefed in the District Court and oral argument was held on October 18,

2011. The reference to the bankruptcy court was withdrawn on several issues on February 29,

2012. The A&B Defendants are currently proceeding in a consolidated briefing before the

District Court. As such, the motion to dismiss briefing schedule has been vacated.

230. While the above-referenced motions have been pending, B&H attorneys have

continued to engage in discovery preparation. Specifically, B&H attorneys refined a list of

potential deponents and conferred with certain financial institutions regarding preservation letters

sent by B&H attorneys to preserve financial records relevant to the litigation.

YY. MATTER 61 – MAXAM

avoidance action against Maxam Absolute Return Fund, L.P., Maxam Absolute Return Fund,

Ltd., Maxam Capital Management, LLC, Maxam Capital GP LLC, Sandra L. Manzke Revocable

Trust, Sandra L. Manzke, as trustee and individually, Suzanne Hammond, Walker Manzke, and

April Bukofser Manzke (collectively, the “Maxam Defendants”) seeking the return of

Conveyance Act, and other applicable law for fraudulent conveyances and damages in

connection with certain transfers of property by BLMIS to or for the benefit of the Maxam

Defendants. Picard v. Maxam Absolute Return Fund, L.P. et al., Adv. Pro. No. 10-05342

Defendants filed a Second Motion to Withdraw the Reference on October 20, 2011, based on

Judge Rakoff’s decision in Picard v. Katz. Defendants had previously filed a Motion to

Withdraw the Reference based solely on the Trustee’s standing to bring common law claims in

July 2011. That Motion was granted, but the Complaint was amended and the common law

claims were dropped prior to briefing on the common law issues. The case was subsequently

referred back to the Bankruptcy Court. Plaintiffs then filed a Second Motion to Withdraw the

Reference during this Compensation Period based on issues such as antecedent debt, the standard

for proving “good faith” under sections 548(c) and 550 of the Bankruptcy Code, and

interpretations of 502(d) and 546(e) of the Bankruptcy Code. The case was transferred back to

the District Court as No. 11 Civ. 7428 and assigned to Judge Rakoff on October 27, 2011. That

motion was granted.

233. On September 22, 2011, B&H attorneys petitioned the Bankruptcy Court to

enjoin an action for a declaratory judgment of non-liability brought in the Cayman Islands

against the Trustee by Maxam Absolute Return Fund, L.P. On October 12, 2011, the Court

enjoined the action based on Maxam’s violation of the automatic stay and on October 14, 2011,

local counsel for the Trustee in the Cayman Islands received a Notice of Discontinuance. On

October 24, 2011, Maxam Limited filed a notice of appeal to the District Court. The appeal was

assigned to Judge Oetken and the parties briefed the motion in the District Court. The District

Court affirmed the Bankruptcy Court’s order enjoining the Cayman action.

234. The parties also engaged in discovery during the Compensation Period. In

November and December 2011, the parties exchanged requests for production and responses and

objections to those requests. The parties then engaged in discussions regarding the breadth and

scope of document discovery, including issues related to electronic document discovery. The

Trustee also noticed several depositions, including the Rule 30(b)(6) depositions of the four entity defendants and the individual depositions of defendants. In addition, the Trustee’s counsel began the process of organizing, reviewing, and analyzing documents produced by Defendants in an effort to prepare for depositions, anticipated motions, and trial.

ZZ. MATTER 62 – SUBSEQUENT TRANSFERS

235. This matter categorizes time spent by the Trustee and B&H attorneys pursuing recovery actions against entities that received subsequent transfers of Customer Property from

BLMIS. Under Bankruptcy Code § 550, the Trustee may recover transfers from BLMIS to a direct customer or from any entity to whom the customer made transfers.

236. During this Compensation Period, the Trustee commenced eighteen additional actions against subsequent transferees seeking to recover in excess of $850 million. Nearly all of these actions arose from transfers made by “Feeder Funds,” which had customer accounts at

BLMIS and received transfers from BLMIS, to the Funds’ shareholders or partners. B&H attorneys entered into stipulations with several defendants setting schedules for the response to the previously filed subsequent transferee Complaints.

237. The Trustee’s investigation is ongoing and additional recovery actions will be

filed.

V. COMPENSATION REQUESTED

238. This Application has been prepared in accordance with the Amended Guidelines

for Fees and Disbursements of Professionals in Southern District of New York Bankruptcy Cases

adopted by the Court on April 19, 1995 (the “Local Guidelines”) and the Second Amended

Compensation Order. Pursuant to the Local Guidelines, the declaration of David J. Sheehan,

Esq., regarding compliance with the same is attached hereto as Exhibit A.

239. The Trustee and B&H expended 134,431.00 hours in the rendition of professional

and paraprofessional services during the Compensation Period, resulting in an average hourly

discounted rate of $357.86 for fees incurred.5 The blended attorney rate is $420.38.

240. Prior to filing this Application, in accordance with the Second Amended

Compensation Order, the Trustee and B&H provided to SIPC: (i) monthly fee statements setting

forth the Trustee’s and B&H’s fees for services rendered and expenses incurred during the

Compensation Period beginning October 1, 2011 through January 31, 2012, and (ii) a draft of this Application. In connection with four monthly statements, the Trustee and B&H voluntarily adjusted their fees by writing off $1,919,697.00 (in addition to the 10% public interest discount, as discussed below), and wrote off expenses customarily charged to other clients in the amount of $438,739.92.

241. At SIPC’s request, the Trustee’s and B&H’s fees in this case reflect a 10% public interest discount from their standard rates. This discount has resulted in an additional voluntary reduction during the Compensation Period of $5,345,318.20. The requested fees are reasonable

5 In order to streamline the invoices and related fee applications, as of June 1, 2011, the invoice amounts reflect combined amounts for the Trustee and B&H.

based on the customary compensation charged by comparably skilled practitioners in Chapter 11

cases and comparable bankruptcy and non-bankruptcy cases in a competitive national legal

market.

242. Pursuant to the Second Amended Compensation Order, on November 22, 2011,

the Trustee and B&H provided SIPC with their statements of fees and expenses incurred in connection with this case regarding the period from October 1, 2011 through October 31, 2011

(the “October Fee Statement”). The October Fee Statement reflected fees of $12,392,354.50 and expenses of $186,796.62. SIPC’s staff requested certain adjustments and made suggestions, which were adopted by the Trustee and B&H. After such adjustments, the October Fee

Statement reflected fees of $11,153,119.05. After subtracting the Court-ordered 10% holdback,

SIPC advanced $10,037,807.15 for services rendered and $186,796.62 for expenses incurred by the Trustee and B&H.

243. Pursuant to the Second Amended Compensation Order, on December 20, 2011, the Trustee and B&H provided SIPC with their statements of fees and expenses incurred in connection with this case regarding the period from November 1, 2011 through November 30,

2011 (the “November Fee Statement”). The November Fee Statement reflected fees of

$13,005,671.50 and expenses of $186,882.29. SIPC’s staff made certain adjustments and suggestions, which were adopted by the Trustee and B&H. After such adjustments, the

December Fee Statement reflected fees of $11,705,104.35. After subtracting the Court-ordered

10% holdback, SIPC advanced $10,534,593.92 for services rendered and $186,882.29 for expenses incurred by the Trustee and B&H.

244. Pursuant to the Second Amended Compensation Order, on January 26, 2012, the

Trustee and B&H provided SIPC with their statements of fees and expenses incurred in

connection with this case regarding the period from December 1, 2011 through December 31,

2011 (the “December Fee Statement”). The December Fee Statement reflected fees of

$13,119,937.00 and expenses of $259,651.72. SIPC’s staff made certain adjustments and

suggestions, which were adopted by the Trustee and B&H. After such adjustments, the

December Fee Statement reflected fees of $11,807,943.30. After subtracting the Court-ordered

10% holdback, SIPC advanced $10,627,148.97 for services rendered and $259,651.72 for expenses incurred by the Trustee and B&H.

245. Pursuant to the Second Amended Compensation Order, on February 21, 2012, the

Trustee and B&H provided SIPC with their statements of fees and expenses incurred in connection with this case regarding the period from January 1, 2012 through January 31, 2012

(the “January Fee Statement”). The January Fee Statement reflected fees of $14,935,219.00 and expenses of $233,294.81. SIPC’s staff made certain adjustments and suggestions, which were adopted by the Trustee and B&H. After such adjustments, the January Fee Statement reflected fees of $13,441,697.10. After subtracting the Court-ordered 10% holdback, SIPC advanced

$12,097,527.39 for services rendered and $233,294.81 for expenses incurred by the Trustee and

246. Exhibit B annexed hereto is a schedule of the B&H professionals, including the

Trustee, and B&H paraprofessionals who have provided services for the Debtor during the

Compensation Period, the capacity in which each individual is employed by B&H, the year in which each attorney was licensed to practice law, the hourly billing rate charged by B&H for services provided by each individual, the aggregate number of hours billed by each individual, and the total compensation requested for each individual, prior to the 10% discount.

247. Exhibit C annexed hereto is a summary of compensation by work task code and

matter number for total number of hours expended and total fees for services rendered by the

B&H professionals. The 10% discount is taken off the total cumulative amount billed, as

reflected on Exhibit C.

248. Exhibit D annexed hereto provides a schedule of the expenses for which

reimbursement is requested by B&H.

249. Exhibit E annexed hereto is a calculation of the Holdback amounts and the release

sought, explained below in Section IV.

250. There is no agreement or understanding among the Trustee, B&H, and any other

person, other than members of B&H, for sharing of compensation to be received for services

rendered in this case. No agreement or understanding prohibited by 18 U.S.C. § 155 has been

made or will be made by the Trustee or B&H.

251. To the extent that time or disbursement charges for services rendered or

disbursements incurred relate to the Compensation Period, but were not classified or processed

prior to the preparation of this Application, the Trustee and B&H reserve the right to request

additional compensation for such services and reimbursement of such expenses in a future

application.

VI. RELEASE OF THE HOLDBACK

252. The Compensation Order established an orderly, regular process for the allowance

and payment of interim monthly compensation and reimbursement to the Trustee and B&H.

(ECF Nos. 126, 1078, 4125). Pursuant to the Compensation Order, payment of a percentage of

the approved compensation—initially twenty percent (20%), subsequently reduced to fifteen

percent (15%), and thereafter further reduced to ten percent (10%)—is deferred through the

conclusion of the liquidation period or until further order of the Court (the “Holdback”).

253. For this and prior Compensation Periods, the amount of the Holdback for the

Trustee’s and B&H’s fees is $32,117,477.51, which includes $4,810,786.37 held back in

connection with this Application. The Trustee and B&H seek a release of the Holdback in the

amount of $16 million, upon the consent and approval of SIPC.

254. The SIPC recommendation filed in support of the fees and expenses requested in

this Application will also support the release of the Holdback in the amount of $16 million for

the Applicants.

255. The Applicants and SIPC respectfully request that the Court authorize the release

of Holdback payment to the Applicants in the amount of $16 million.

VII. THE REQUEST FOR INTERIM COMPENSATION SHOULD BE GRANTED

256. Section 78eee(b)(5)(A) of SIPA provides in pertinent part that, upon appropriate

application and after a hearing, “[t)he court shall grant reasonable compensation for services

rendered and reimbursement for proper costs and expenses incurred . . . by a trustee, and by the

attorney for such a trustee . . .” Section 78eee(b)(5)(C) of SIPA specifically establishes SIPC’s

role in connection with applications for compensation and the consideration the Court should

give to SIPC’s recommendation concerning fees. That section provides as follows:

In any case in which such allowances are to be paid by SIPC without reasonable expectation of recoupment thereof as provided in this chapter and there is no difference between the amounts requested and the amounts recommended by SIPC, the court shall award the amounts recommended by SIPC. In determining the amount of allowances in all other cases, the court shall give due consideration to the nature, extent, and value of the services rendered, and shall place considerable reliance on the recommendation of SIPC.

SIPA § 78eee(b)(5)(C).

257. To the extent the general estate is insufficient to pay such allowances as an

expense of administration, SIPA § 78eee(b)(5)(E) requires SIPC to advance the funds necessary

to pay the compensation of the Trustee and B&H (see SIPA § 78fff-3(b)(2)).

258. While the Trustee has recovered or entered into agreements to recover over $9

billion to date, a significant portion of these funds must be held in reserve pending final

resolution of several appeals and disputes.

259. Accordingly, the Trustee has determined that, at this time, he has no reasonable

expectation that the general estate will be sufficient to make a distribution to general creditors or

pay administrative expenses. The Trustee has been advised by SIPC that it concurs in this belief

of the Trustee. Any fees and expenses allowed by this Court will be paid from advances by

SIPC without any reasonable expectation by SIPC of recoupment thereof.

260. Therefore, with respect to this Application, the Trustee and B&H request that

consistent with section 78eee(b)(5)(C) of SIPA, the Court “shall award the amounts

recommended by SIPC.” See In re Bell & Beckwith, 112 B.R. 876 (Bankr. N.D. Ohio 1990).

SIPC will file its recommendation to the Court with respect to this Application prior to the

hearing scheduled to be held on August 29, 2012.

261. The Trustee and B&H submit that the request for interim allowance of

compensation and expenses made by this Application is reasonable and complies with the

provisions of the Bankruptcy Code governing applications for compensation and reimbursement

of expenses, pursuant to SIPA § 78eee(b)(5).

VIII. CONCLUSION

262. The Trustee and B&H respectfully submit that the services rendered during the

Compensation Period and accomplishments to date merit the approval of the fees and

disbursements requested herein, and respectfully requests that the Court enter Orders as follows:

(i) allowing and awarding $48,107,863.80 (of which $43,297,077.43 is to be paid currently and

$4,810,786.37 is to be held back through the conclusion of the liquidation period or until further

order of the Court) as an interim payment for professional services rendered by the Trustee and

B&H during the Compensation Period, and $866,625.44 as reimbursement of the actual and

necessary costs and expenses incurred by the Trustee and B&H in connection with the rendition

of such services; (ii) releasing $16 million to the Trustee and B&H from the Holdback; and (iii)

granting such other and further relief as the Court may deem just and proper.

Dated: New York, New York Respectfully submitted, August 1, 2012 BAKER & HOSTETLER LLP

By:/s/ David J. Sheehan______Baker & Hostetler LLP 45 Rockefeller Plaza New York, New York 10111 Telephone: (212) 589-4200 Facsimile: (212) 589-4201 Irving H. Picard Email: [email protected] David J. Sheehan Email: [email protected] Seanna R. Brown Email: [email protected] Jessie Schweller Email: [email protected]

Attorneys for Irving H. Picard, Esq. Trustee for the Substantively Consolidated SIPA Liquidation of Bernard L. Madoff Investment Securities LLC And Bernard L. Madoff

300187727

73 08-01789-brl Doc 4936-1 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit A Pg 1 of 6

EXHIBIT A

08-01789-brl Doc 4936-1 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit A Pg 2 of 6

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

SECURITIES INVESTOR PROTECTION CORPORATION, Adv. Pro. No. 08-01789 (BRL) Plaintiff, SIPA Liquidation v. (Substantively Consolidated) BERNARD L. MADOFF INVESTMENT SECURITIES LLC,

Defendant. In re:

BERNARD L. MADOFF,

Debtor.

DECLARATION OF DAVID J. SHEEHAN

STATE OF NEW YORK ) ss: COUNTY OF NEW YORK )

David J. Sheehan hereby declared as follows:

1. I am an attorney admitted to the bar of this Court and a partner of the firm of

Baker & Hostetler LLP (“B&H”). I submit this affidavit in support of the ninth application of

Irving H. Picard, as trustee (the “Trustee”) for the substantively consolidated liquidation proceeding of Bernard L. Madoff Investment Securities LLC (“BLMIS” or “Debtor”) and

Bernard L. Madoff (“Madoff”), and B&H, as counsel to the Trustee, for allowance of interim compensation for services performed and reimbursement of actual and necessary expenses incurred during the period commencing October 1, 2011 through and including January 31, 2012

(the “Compensation Period”), pursuant to 15 U.S.C.§ 78eee(b)(5),1 sections 330 and 331 of the

Bankruptcy Code, Rule 2016(a) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy

Rules”) and the Order Pursuant to Section 78eee(b)(5) of SIPA, Sections 105, 330 and 331 of the

Bankruptcy Code, Bankruptcy Rule 2016(a) and Local Bankruptcy Rule 2016-1 Establishing

Procedures Governing Interim Monthly Compensation of Trustee and Baker & Hostetler LLP,

dated February 25, 2009 (ECF No. 126), as amended on December 17, 2009 and June 1, 2011

(ECF Nos. 1078 and 4025) (collectively, the “Second Amended Compensation Order”).

2. On December 11, 2008 (the “Filing Date”),2 the Securities and Exchange

Commission (“SEC”) filed a complaint in the United States District Court for the Southern

District of New York (“District Court”) against Madoff, captioned SEC v. Madoff, et al., No. 08

Civ. 10791 (the “Civil Case”). The complaint alleged that the defendants engaged in fraud

through the investment advisor (or “IA”) business of BLMIS.

3. On December 15, 2008, pursuant to section 78eee(a)(4)(A) of SIPA, the SEC

consented to a combination of the Civil Case with an application filed by the Securities Investor

Protection Corporation (“SIPC”). Thereafter, pursuant to section 78eee(a)(3) of SIPA, SIPC

filed an application in the District Court alleging, inter alia, that the Debtor was not able to meet its obligations to securities customers as they came due and, accordingly, its customers needed the protection afforded by SIPA.

4. Accordingly, on December 15, 2008, the District Court entered the order (the

“Protective Decree”) (ECF No. 4), to which BLMIS consented, which, in pertinent part:

1 The Securities Investor Protection Act (“SIPA”) is found at 15 U.S.C. §§ 78aaa et seq. For convenience, subsequent references to SIPA will omit “15 U.S.C. ____.” 2 In this case, the Filing Date is the date on which the SEC commenced its suit against BLMIS, December 11, 2008, which resulted in the appointment of a receiver for the firm. See Section 78lll(7)(B) of SIPA.

a. appointed the Trustee for the liquidation of the business of the Debtor pursuant to section 78eee(b)(3) of SIPA;

b. appointed B&H as counsel to the Trustee pursuant to section 78eee(b)(3) of SIPA; and

c. removed the case to the Bankruptcy Court pursuant to section 78eee(b)(4) of SIPA.

5. I submit this declaration pursuant to Bankruptcy Rule 2016(a) in support of the ninth interim application (the “Application”) (i) allowing and awarding $48,107,863.80 (of which

$43,297,077.43 is to be paid currently and $4,810,786.37 is to be deferred through the conclusion of the liquidation period or until further order of the Court) as an interim payment for professional services rendered by the Trustee and B&H during the Compensation Period, and

$866,625.44 as reimbursement of the actual and necessary costs and expenses incurred by the

Trustee and B&H in connection with the rendition of such services; (ii) release of the Holdback in the amount of $16 million; and (iii) granting such other and further relief as the Court may deem just and proper.

6. As the lead partner at B&H staffed on this matter, I am familiar with such services and with these proceedings. These statements are correct to the best of my knowledge and belief, based upon conversations I have conducted with the Trustee, the partners and associates of B&H, and upon records kept by B&H in the normal course of business.

7. I hereby certify that (i) I have read the Application; and (ii) to the best of my knowledge, information, and belief formed after reasonable inquiry, the Application complies with the guidelines for fee applications under Bankruptcy Rule 2016(a) and the Second Amended

Compensation Order.

8. The Trustee’s and B&H’s fees in this case reflect a 10% public interest discount from standard rates. This discount has resulted in a voluntary reduction during the

Compensation Period of $5,345,318.20. In addition, the Trustee and B&H voluntarily adjusted its fees by writing off $1,919,697.00 and wrote off expenses customarily charged to other clients in the amount of $438,739.92. Such fees are reasonable based on the customary compensation charged by comparably skilled practitioners in comparable bankruptcy and non-bankruptcy cases in a competitive national legal market.

9. I hereby certify that members of SIPC have been provided with a copy of this

Application.

10. I hereby certify that members of SIPC have been provided with monthly statements of fees and disbursements accrued during the Compensation Period in accordance with the Second Amended Compensation Order.

11. I hereby certify that (i) in providing reimbursable non-legal services to the estate,

B&H does not make a profit on such services; and (ii) in seeking reimbursement for a service which B&H justifiably purchased or contracted from a third party, B&H requests reimbursement only for the amount billed to B&H by the third-party vendors and paid by B&H to such vendors.

12. Pursuant to the Second Amended Compensation Order, payment of a percentage of the approved compensation—initially twenty percent (20%) and subsequently reduced to fifteen percent (15%) and then ten percent (10%)—is deferred through the conclusion of the liquidation period or until further order of the Court (the “Holdback”).

13. For this and prior Compensation Periods, the amount of the Holdback for the

Trustee’s and B&H’s fees is $32,117,477.51, which includes $4,810,786.37 held back in connection with this Application. The Trustee and B&H seek a release of the Holdback in the amount of $16 million.

14. Neither the Trustee nor B&H has made any previous application for allowance of fees for professional services rendered during the Compensation Period.

15. There is no agreement or understanding between the Trustee, B&H, and any other person, other than members of B&H, for sharing of compensation to be received for services rendered in this case.

16. No agreement or understanding prohibited by 18 U.S.C. § 155 has been made or shall be made by the Trustee or B&H.

Dated: August 1, 2012 New York, New York By: /s/David J. Sheehan______David J. Sheehan

300203707

6 08-01789-brl Doc 4936-2 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit B Pg 1 of 6

EXHIBIT B SUMMARY OF NINTH INTERIM FEE APPLICATION OF BAKER & HOSTETLER LLP FOR SERVICES RENDERED FROM OCTOBER 1, 2011 THROUGH JANUARY 31, 2012

TOTAL SUMMARY YEAR HOURS TOTAL CLASS NAME ADMITTED HOURLY RATE BILLED COMPENSATION

Partners and of Counsel Lieberstein, Eugene 1965 466.25 98.70 46,372.00 Picard, Irving H. 1966 860.00 623.90 536,583.00 Sheehan, David J. 1968 859.93 835.80 719,202.00 Colombo, Louis A 1973 579.00 107.80 62,905.00 Cymrot, Mark A 1973 850.00 6.00 5,100.00 Matthias, Michael R 1973 613.00 355.10 218,250.50 Moscow, John W 1973 764.14 182.90 139,404.50 Bash, Brian A 1975 662.11 138.60 92,078.00 Beckwith, Edward J 1975 640.00 2.00 1,280.00 Long, Thomas L 1976 690.54 711.30 489,527.50 Markowitz, Laurence S 1977 695.00 1.20 834.00 Horowitz, Robert B.G. 1978 530.00 0.80 424.00 Gibson, Wendy J 1979 477.00 224.80 108,138.00 Goldman, Matthew R 1979 690.00 1.00 690.00 Mooradian, George T 1979 660.00 3.80 2,508.00 Powers, Marc D 1981 759.09 321.40 244,186.00 Bittence, Mary M 1982 470.00 6.20 2,914.00 Chockley III, Frederick W 1982 700.50 208.20 145,009.00 Ponto, Geraldine E. 1982 784.55 597.50 468,840.00 Drogen, Andrew M 1983 580.00 13.20 7,656.00 Hannon, John P 1983 660.00 320.50 211,530.00 McGowan Jr, John J 1984 545.00 37.40 20,698.00 Quiat, Laurin D 1985 532.14 36.70 19,556.00 Smith, Elizabeth A 1985 764.55 346.00 265,038.00 McDonald, Heather J 1986 551.25 463.00 256,343.50 Reich, Andrew W 1987 544.55 396.10 216,444.00 Siegal, John 1987 748.33 113.80 84,631.00 Tobin, Donna A. 1987 645.29 404.50 261,981.50 Burke, John J 1988 626.92 282.10 176,240.00 Ferguson, Gerald J 1988 685.00 7.70 5,274.50 Susanin, Timothy S. 1988 850.00 443.90 377,315.00 DeLancey, Leah E 1990 583.00 68.40 39,498.00 Douthett, Breaden M 1991 364.44 51.20 18,762.00 Goldberg, Steven H 1991 854.99 248.10 212,338.50 Hunt, Dean D 1991 567.78 433.30 246,963.50 Resnick, Lauren J 1991 854.06 359.10 306,117.00 Hirschfield, Marc E. 1992 800.00 573.40 458,720.00 Selby, Judy A. 1992 739.74 683.90 504,637.50 Warren, Thomas D 1992 638.16 290.50 182,402.50 Barr, Jonathan R. 1993 725.00 7.90 5,727.50 Gluck, Peter J. 1993 500.00 18.00 9,000.00 Griffin, Regina L. 1993 789.00 920.60 733,119.00 Kornfeld, Mark A. 1993 785.87 866.50 682,882.50 Renner, Deborah H. 1993 785.10 677.60 535,105.00 Slater, Lourdes M. 1993 700.00 99.90 69,930.00 Dolatly, George C. 1994 705.00 4.50 3,172.50 Jacobs, Tonya A 1994 496.67 441.70 219,861.00 Sarlson, Katherine G 1994 225.00 221.10 49,747.50 Brennan, Terry M 1995 434.55 151.20 65,812.00 Fuller, Lars H. 1995 363.75 140.80 51,099.00 Scaletta, Anthony J 1995 417.50 81.80 33,862.00 Cole, Tracy L 1996 668.57 487.40 329,328.00 Levin, Richard B. 1996 400.00 11.40 4,560.00 Munn, Demetri E 1996 422.00 43.80 18,461.00 Turner, Christa C. 1996 413.75 395.60 164,656.00 Enockson, Paul S 1997 431.67 142.10 61,508.00 Hoang, Lan 1997 710.00 480.70 341,297.00 Murphy, Keith R. 1997 795.96 630.60 501,069.00 TOTAL SUMMARY YEAR HOURS TOTAL CLASS NAME ADMITTED HOURLY RATE BILLED COMPENSATION 08-01789-brl Doc 4936-2 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit B Pg 2 of 6

Papp, Edward Daniel 1997 310.00 9.10 2,821.00 Scully, Elizabeth A 1997 563.33 197.00 111,555.00 Fish, Eric R. 1998 579.86 365.90 209,408.50 New, Jonathan B. 1998 793.00 101.40 80,399.00 Perdion, Jason P 1998 380.71 74.90 28,535.50 Roegge, Jeannette O. 1998 350.00 17.90 6,265.00 Rollinson, James H 1998 384.17 309.70 118,486.00 Rose, Jorian L. 1998 717.62 503.80 362,898.00 Wall, Brett A 1998 414.17 227.10 94,001.00 Wang, Ona T 1998 660.00 0.90 594.00 Warshavsky, Oren J. 1998 744.40 769.50 578,367.50 Fischbach, Ryan D 1999 438.57 54.40 23,814.00 Pergament, Benjamin D 1999 570.00 355.20 203,004.00 Bohorquez Jr, Fernando A 2000 623.57 1,301.00 821,157.00 Cremona, Nicholas J. 2000 718.24 769.70 552,439.00 Schlegelmilch, Stephan J 2000 365.00 87.40 31,991.50 Alaverdi, Loura L 2001 466.67 403.90 196,395.00 Beckerlegge, Robertson D 2001 522.14 232.80 121,299.50 Burgan, Kelly S 2001 423.57 81.30 34,135.50 Fokas, Jimmy 2001 680.56 247.00 167,587.50 Oppenheim, Adam B. 2001 660.50 577.40 380,574.00 Pfeifer, Timothy S. 2001 661.11 539.80 357,400.00 Skapof, Marc 2001 659.66 566.00 373,181.50 Wall, Andrea C 2001 355.00 1.00 355.00 Weiser, Scott R. 2001 568.75 295.40 168,398.00 Zeballos, Gonzalo S. 2001 712.04 500.50 357,995.00 Garg, Anjula 2002 545.00 172.00 94,784.00 Wearsch, Thomas M 2002 510.00 392.40 197,038.00 Hochmuth, Farrell A 2003 421.15 338.70 142,874.50 Jacobs, Edward J. 2003 550.63 685.60 372,332.00 Jenson, Karin Scholz 2003 411.67 970.90 391,143.50 Oliver, Jason S. 2003 515.00 51.10 26,045.00 Wilde, Michael C 2003 313.75 169.50 53,343.00 Evans Jr, David L 2004 300.00 2.30 690.00 Kitaev, Erica G. 2004 331.25 282.30 93,905.00 Kitchen, David E 2004 343.00 329.00 113,843.00 Smith, Rachel M 2004 383.33 146.70 55,725.00 Proano, David F 2005 295.00 6.00 1,770.00 Weber, William J 2005 515.00 0.30 154.50 Conley, Sylvia J 2006 536.00 367.90 197,279.00 Partners and of Counsel Total 641.09 28,327.70 18,160,572.50 Associates Meisels, Naomi P. 1984 525.00 110.30 57,907.50 Bieler, Philip 1994 425.00 710.70 302,047.50 Procell, Karen W. 1995 410.00 215.30 88,273.00 Kates, Elyssa S. 2000 533.33 262.40 138,700.00 Bell, Stacey A. 2001 577.78 971.40 564,487.50 Esser, Brian K 2001 596.09 617.90 366,055.50 Shivnarain, Dwayne A. 2001 503.00 323.70 163,258.50 North, Geoffrey A. 2002 539.00 754.00 410,078.00 Song, Brian W. 2002 450.00 685.30 308,385.00 Cheema, Bik 2003 496.43 446.50 222,608.50 Malek, Sammi 2003 536.00 187.50 101,694.00 Shields, Nkosi D. 2003 440.00 592.80 260,832.00 Wlodek, Heather 2003 442.73 298.40 132,099.00 Cohen, Dennis O 2004 500.00 106.70 53,350.00 Gabriel, Jessie M 2004 424.32 266.00 113,175.00 Glasser, Michael P. 2004 458.89 200.60 92,701.00 Karttunen, Timo 2004 465.00 143.80 66,867.00 Kolm, Julie A. 2004 440.00 41.80 18,392.00 Obhof, Larry J. 2004 310.00 1.30 403.00 Powell, Michael L 2004 442.50 302.10 131,784.00 Smith, Adam J 2004 450.00 43.70 19,665.00 Allen, Brian F. 2005 430.00 498.90 214,527.00 Benavides, Michelle 2005 382.50 128.60 49,163.00 Bodenheimer, Henry C. 2005 458.75 360.60 165,813.00 TOTAL SUMMARY YEAR HOURS TOTAL CLASS NAME ADMITTED HOURLY RATE BILLED COMPENSATION Carvalho, Melissa M. 2005 462.50 408.70 190,410.00 Chow, Teresa C. 2005 376.25 188.40 72,405.50 Hartman, Ruth E 2005 300.45 402.70 121,002.50 08-01789-brl Doc 4936-2 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit B Pg 3 of 6

Leeper, Kurt A 2005 285.00 8.10 2,308.50 Madbak, Hanna F. 2005 490.00 8.50 4,165.00 Raley, Matthew R 2005 375.00 4.30 1,612.50 Rodriguez, Alberto 2005 480.00 74.90 35,557.50 Stump, Jacob R. 2005 295.00 306.00 90,700.00 Thorpe, Courtni E 2005 285.00 19.20 5,472.00 White, Nicholas L 2005 285.00 95.40 27,189.00 Carlisle, Marie L. 2006 356.25 570.70 203,632.50 DeGaetano, Melissa A 2006 275.00 6.60 1,815.00 Feil, Matthew D. 2006 467.78 515.00 240,885.00 Heim, Kathryn M. 2006 453.57 58.00 26,354.00 Kosack, Melissa L. 2006 456.36 1,077.40 494,525.00 Lange, Gretchen L 2006 280.71 81.80 22,723.00 Longstaff, Carrie 2006 459.72 721.40 331,399.00 Nevin, Douglas M 2006 451.11 193.20 86,265.50 Olson, Stephen T 2006 375.00 10.70 4,012.50 Petrelli III, John W 2006 356.67 66.80 24,103.00 Shoshany, Lindsey A. 2006 417.00 649.90 270,976.50 Smith, Greer D 2006 275.00 1.50 412.50 Tobin, Sarah M 2006 354.29 249.00 88,743.00 Vanderwal, Amy E. 2006 525.00 34.70 18,217.50 Yates, Shana M. 2006 391.25 543.50 212,483.50 Barker Brown, Erin R 2007 260.00 11.10 2,917.50 Biegelman, Daniel R. 2007 419.44 99.10 41,440.50 Bobb, Matthew I. 2007 415.00 537.30 222,979.50 Brown, Seanna R. 2007 514.19 736.90 378,050.00 Calvani, Torello H. 2007 503.85 771.70 392,347.50 Casey IV, James P. 2007 337.50 3.70 1,260.00 Garvin, Naima J. 2007 500.00 17.10 8,550.00 Goldmark, Jena B. 2007 415.00 422.80 175,462.00 Howard, Emily A. 2007 419.44 317.90 135,030.50 Jacobson, Michael B 2007 404.55 209.20 83,910.00 Karp, Brian S. 2007 458.75 235.20 108,541.50 Klidonas, George 2007 371.58 385.20 146,077.00 Lawrence, Kelvin M 2007 258.00 342.50 86,619.00 Lee, Joon 2007 415.00 745.90 309,548.50 Liburd, Essence 2007 431.45 225.60 96,892.50 McGibbon, Joanna S. 2007 415.00 136.80 56,772.00 Nelson, Maritza S 2007 257.14 339.10 86,550.00 Ranade, Samir K. 2007 500.00 421.80 210,900.00 Ritz, Kenneth A. 2007 415.00 742.20 308,013.00 Truong, Sarah J. 2007 506.88 558.00 283,090.00 Walrath, Jennifer M 2007 420.00 4.80 2,016.00 Amin, Tina U 2008 277.50 316.80 88,117.50 Carbajal, Natacha 2008 415.70 303.70 127,525.00 Chang, Willy 2008 375.00 9.30 3,487.50 Day, James W. 2008 406.25 625.70 254,000.00 Goldstein, Robyn R. 2008 308.33 637.60 197,198.00 Kaplan, Deborah A 2008 417.86 454.00 186,410.00 Kaplan, Michelle R. 2008 404.62 706.60 286,324.00 Luke, Tarsha L 2008 405.00 186.20 75,567.50 McCurrach, Elizabeth G. 2008 420.00 264.10 110,563.50 Moody, Matthew J. 2008 423.42 549.40 231,053.00 Murdock-Park, Erin K. 2008 240.00 24.80 5,952.00 Nixon, Christy A. 2008 381.82 228.20 86,255.00 O'Neal, Stephen T. 2008 225.00 628.70 141,457.50 Osburn, Alexis C. 2008 240.00 10.20 2,448.00 Ramos-Mrosovsky, Carlos 2008 410.00 42.10 17,485.00 Rovine, Jacqlyn 2008 400.00 720.50 288,200.00 Schutte, Elizabeth M. 2008 400.00 224.10 89,640.00 Stanley, Trevor M. 2008 389.64 89.00 34,967.50 TOTAL SUMMARY YEAR HOURS TOTAL CLASS NAME ADMITTED HOURLY RATE BILLED COMPENSATION Stark, Anthony M. 2008 418.20 386.90 160,791.50 Thomas, Joshua C. 2008 309.29 144.20 44,414.50 Walgenbach, Emilie J. 2008 415.00 397.70 165,045.50 Whittlesey, Gillian L. 2008 350.00 27.10 9,485.00 Woltering, Catherine E. 2008 243.67 748.20 182,634.00 Zunno, Kathryn M. 2008 505.00 983.90 498,595.00 Bogucki, Scott J. 2009 400.00 617.00 246,800.00 08-01789-brl Doc 4936-2 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit B Pg 4 of 6

Budd, Ashley J. 2009 225.00 678.40 152,640.00 Campbell, Patrick T 2009 406.25 348.20 140,960.00 Collins, Tarique N. 2009 415.00 427.70 177,495.50 D'Andrea, Lindsey 2009 233.75 348.50 82,471.00 Gentile, Dominic A. 2009 400.00 693.10 277,240.00 Hangawatte, Udyogi A. 2009 367.50 103.10 37,440.00 Harker, Francesca M. 2009 381.25 92.80 35,112.50 Howe, Mary E. 2009 382.95 612.10 234,097.50 Kamath, Pramila A. 2009 226.94 435.90 98,943.50 Kessler, Dena S. 2009 320.00 10.10 3,232.00 Kramer, Kathryn M. 2009 225.00 794.00 178,650.00 Law, Karen 2009 294.17 85.20 26,045.50 LeClair, Nicole D. 2009 225.00 480.50 108,112.50 Marck, Michelle K 2009 400.00 78.80 31,520.00 Markel, Tatiana 2009 382.35 876.60 333,362.50 Maynard, Kim M. 2009 360.00 622.60 225,303.00 McKnight, Katherine L. 2009 380.00 11.70 4,446.00 Molina, Marco 2009 404.29 746.30 302,500.00 Murray, Kelli A. 2009 248.75 40.60 10,241.00 Nickodem, Robert G. 2009 225.00 421.70 94,882.50 Ozturk, Ferve E. 2009 405.91 769.50 311,674.00 Schweller, Jessie A. 2009 403.75 590.90 238,858.00 Shapiro, Peter B. 2009 404.71 422.30 172,532.00 Stuber, Kristen D. 2009 230.00 141.00 32,430.00 Tremaglio, Analiese 2009 350.00 425.80 149,030.00 Vessells, Jennifer A. 2009 235.63 584.10 135,934.50 Winquist, Justin T. 2009 263.75 321.20 84,212.50 Witt, Sara L. 2009 230.00 2.20 506.00 Abraham, Asha 2010 391.88 676.00 264,355.50 Barra, Jonathan P. 2010 225.00 581.90 130,927.50 Burgos, Jocelyn 2010 400.00 130.40 52,160.00 Bushnell, Christina M. 2010 225.00 474.70 106,807.50 Carney, Brian W. 2010 225.00 634.80 142,830.00 Castillon, Jesus J. 2010 290.00 413.20 119,740.00 Chandler, Tara R. 2010 225.00 709.20 159,570.00 Chohan, Raj 2010 240.00 153.40 36,983.00 Choi, David 2010 400.00 704.60 281,840.00 Clegg, Sammantha E. 2010 397.50 431.70 171,570.00 Cominsky, Mark A. 2010 226.92 502.80 114,229.00 Cook, Nora K. 2010 225.00 701.20 157,770.00 Crist, John W. 2010 225.00 607.10 136,597.50 Estes, Yelena 2010 391.85 615.90 241,133.50 Fein, Amanda E. 2010 364.00 995.80 365,992.00 Flynn, Alison 2010 400.00 113.80 45,520.00 Geronimo, Andrew C. 2010 225.00 594.30 133,717.50 Hansford, Melissa L. 2010 225.00 570.90 128,452.50 Hoff, Michelle M. 2010 230.00 114.10 26,243.00 James, Christopher T. 2010 290.00 322.70 93,061.50 Khatib, Hadi 2010 390.00 299.80 116,922.00 Koch, Jacqueline R. 2010 322.50 228.80 70,413.00 Martin, David J. 2010 227.08 496.80 112,841.50 Maytal, Anat 2010 391.36 699.20 273,577.00 McMillan, David M. 2010 391.18 585.10 229,016.50 Mosier, A. Mackenna 2010 402.00 417.50 168,680.00 Needham, Kelly C. 2010 225.00 707.10 159,097.50 Portnoy, Lesley F. 2010 363.00 356.40 129,894.00 Pratt, Rodney E. 2010 225.00 419.70 94,432.50 Rog, Joshua B. 2010 400.00 730.60 292,240.00 TOTAL SUMMARY YEAR HOURS TOTAL CLASS NAME ADMITTED HOURLY RATE BILLED COMPENSATION Rollins, Jennifer B. 2010 226.43 569.20 128,973.00 Rouach, Sophie 2010 415.00 153.80 63,827.00 Schichnes, Jessica 2010 392.73 567.10 222,000.00 Schlueter, Andrew C. 2010 225.00 670.80 150,930.00 Scott, Justin T. 2010 290.00 504.30 145,593.50 Sobel, Sean H. 2010 225.00 863.80 194,355.00 Taddeo, Luisa 2010 225.00 582.20 130,995.00 Ubaid, Maryland H. 2010 225.00 693.30 155,992.50 Vasel, Denise D. 2010 363.89 365.00 131,635.00 Wasko, Lindsay J. 2010 225.00 748.10 168,322.50 08-01789-brl Doc 4936-2 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit B Pg 5 of 6

Young, Michelle L. 2010 338.00 270.40 92,301.50 Abonamah, Ahmed 2011 225.00 374.50 84,262.50 Bacon, Natalie R. 2011 230.00 114.90 26,427.00 Ball, Stephen L. 2011 338.46 377.30 129,143.50 Barhorst, Damon C. 2011 226.39 391.60 88,923.00 Beck, Christopher R. 2011 230.00 111.80 25,714.00 Becker, Eric J. 2011 230.00 105.00 24,150.00 Buskirk, Alex D. 2011 230.00 117.20 26,956.00 Cabico, Jason D. 2011 339.29 307.60 105,300.50 Cutler, Sima L. 2011 226.56 510.70 116,127.00 deVries, Alan C. 2011 207.50 538.60 113,825.00 Dorner, Drew T. 2011 226.67 438.60 99,513.50 Durbin, Damon M. 2011 230.00 112.30 25,829.00 Economides, Constantine P. 2011 391.39 581.00 227,395.50 Ekechuku, Steven D. 2011 390.83 680.70 266,152.00 Elam, Elise R. 2011 227.31 458.00 104,051.00 Farnsworth, Joshua L. 2011 226.50 372.00 84,573.50 Feldstein, Robyn M 2011 391.77 736.50 288,251.50 Gottesman, Joel D. 2011 225.00 512.00 115,200.00 Grant, Lindsey M. 2011 230.00 116.30 26,749.00 Jagunic, Michael H. 2011 230.00 115.00 26,450.00 Kahner, Tegan E. 2011 226.58 513.60 116,609.00 Knappick, Justin L. 2011 226.50 463.70 105,245.50 Krishna, Ganesh 2011 391.82 710.90 278,155.50 Lundregan, Scott M. 2011 227.00 438.20 99,506.50 Nowakowski, Jonathan 2011 391.79 734.20 287,512.00 Nutt, Jessica E. 2011 391.67 581.30 227,570.00 Oliva, Frank M. 2011 391.25 707.90 276,752.00 Paul, Shuva J. 2011 226.88 401.50 91,277.00 Polsinelli, Jaclyn R. 2011 226.92 422.90 96,044.00 Powell, Robin D. 2011 226.50 487.10 110,595.50 Ruginis, Alexis N. 2011 391.25 587.30 229,992.50 Schechter, Jody E. 2011 318.33 763.10 244,272.50 Sinclair, Jordan A. 2011 276.11 383.90 106,094.50 Spears, Ericka H. 2011 226.18 693.90 157,210.00 Stewart, Justin T. 2011 226.92 515.40 116,952.50 Tasan, Sinem B. 2011 230.00 109.50 25,185.00 Thompson, Eric D. 2011 230.00 108.20 24,886.00 Towner, Amber N. 2011 230.00 116.10 26,703.00 von Ansbach-Young, Michael R. 2011 225.94 583.50 132,120.00 Wangsgard, Kendall E. 2011 338.75 141.00 47,874.00 Wells, Carrie T. 2011 225.00 719.90 161,977.50 White, Jason T. 2011 350.00 435.30 152,355.00 White, Lauren A. 2011 226.67 470.40 106,855.00 Wolf, Jacob H. 2011 230.00 104.20 23,966.00 Zuberi, Madiha M. 2011 390.56 750.50 293,605.50 Consolino, Serine R. 2012 318.33 268.10 84,853.50 Gallagher, Christopher B. 2012 391.47 756.90 296,409.50 Hough, Shawn P. 2012 390.00 355.80 138,762.00 Khan, Juvaria S. 2012 319.00 611.30 196,011.50 Kravitz, Bret D. 2012 227.00 503.30 114,319.50 Babka, Sarah R. #N/A 391.33 572.40 223,600.00 Cunningham-Minnick, Jennifer A. #N/A 225.00 112.70 25,357.50 Curtin, Daniel P. #N/A 319.00 165.50 53,184.50 Houston, Christopher S. #N/A 225.00 32.20 7,245.00 TOTAL SUMMARY YEAR HOURS TOTAL CLASS NAME ADMITTED HOURLY RATE BILLED COMPENSATION Plummer, Caitlin M. #N/A 315.00 0.90 283.50 Rice, David W. #N/A 391.00 859.30 336,332.50 Associates Total 348.15 86,552.50 30,133,099.00 Paralegals, Clerks, Library Staff and Other Non-Legal Staff Allemant-Salas, Gonzalo #N/A 302.50 460.30 139,336.50 Bekier, James M. #N/A 366.90 619.90 226,072.00 Bitman, Oleg #N/A 248.33 393.30 97,484.50 Blaber, Theresa A #N/A 278.60 265.80 73,905.00 Bliss, Stephanie L. #N/A 211.00 133.10 28,087.00 Cabrera, Ramon C #N/A 228.33 182.80 41,524.00 Chan, Angeline #N/A 225.00 611.20 137,520.00 08-01789-brl Doc 4936-2 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit B Pg 6 of 6

Charlotten, Magdalena #N/A 249.38 280.70 69,699.50 Chiofalo, Frank A. #N/A 227.00 826.80 188,395.00 Cohen, Justin H. #N/A 300.00 23.30 6,990.00 Craig, Robert E #N/A 425.00 6.10 2,592.50 Creagan, Carol A #N/A 175.00 102.80 17,990.00 Dyer, Ricky J #N/A 185.00 36.70 6,719.00 Fetzer, Jeffrey L #N/A 202.50 202.00 40,714.00 Fishelman, Benjamin D. #N/A 355.26 791.40 280,370.00 Fredle, Vicki M #N/A 185.00 8.00 1,480.00 Gardner, Bronson R #N/A 200.00 128.50 25,700.00 Halwes, Shannon L. #N/A 187.50 201.20 38,127.00 Heller, Julie M. #N/A 364.35 267.70 96,614.00 Iskhakova, Yuliya #N/A 260.80 670.30 176,171.00 Jones, Michael K. #N/A 135.00 6.10 823.50 Kurtock, Julie A #N/A 205.00 6.10 1,250.50 Landrio, Nikki M. #N/A 314.42 740.60 232,506.50 Lee, Magali L. #N/A 259.47 723.20 187,716.00 Little, Lynn M. #N/A 288.41 187.10 53,991.00 Martin, Sasha L. #N/A 248.46 480.00 119,428.50 Maxwell, Sarah A #N/A 165.97 250.80 41,657.00 McLaughlin, Christopher #N/A 162.58 605.80 98,414.00 Mearns, Erin F. #N/A 223.08 154.60 34,295.00 Medina, Rebecca J. #N/A 160.00 181.50 29,040.00 Monge, Tirsa #N/A 290.00 633.80 182,994.00 Montalvo, Jason M. #N/A 302.50 573.30 173,832.00 Montani, Christine A. #N/A 287.94 467.00 134,001.00 Nikac, Mario #N/A 335.00 207.90 69,646.50 Nunes, Silas T #N/A 262.86 745.50 195,796.00 Oliver-Weeks, Marcella J. #N/A 279.57 520.00 144,896.00 Ostrander, John C. #N/A 202.11 418.10 84,538.00 Paremoud, Jana #N/A 227.41 285.40 65,005.00 Pulsipher, Eric K. #N/A 275.00 394.40 108,460.00 Rawles, Michael M #N/A 195.00 9.90 1,930.50 Remus, Amanda #N/A 279.00 629.70 175,371.00 Reynolds, Julie L. #N/A 200.00 28.40 5,680.00 Rivera, Eileen G. #N/A 167.62 625.60 104,551.00 Samarasekera, Dilip #N/A 200.00 186.10 37,220.00 Schnarre, Nicole L. #N/A 366.40 605.50 220,920.00 Stone, Adrian #N/A 249.00 583.00 144,968.00 Sulhan, Barbara J #N/A 176.25 60.90 10,705.00 Sweet, Karen R #N/A 208.00 181.50 37,555.50 Tushaj, Diana M. #N/A 235.00 261.70 61,499.50 Van Dyke, Dawn M #N/A 235.00 6.20 1,457.00 Villamayor, Fidentino L. #N/A 304.69 564.60 171,435.00 von Collande, Constance M. #N/A 262.09 705.30 186,058.50 Wallace, Dawn L. #N/A 279.04 465.70 129,809.00 Wasserman, Gabor M. #N/A 335.00 177.30 59,395.50 Weaver, Scott #N/A 250.00 534.10 133,525.00 Wilkins, Kerrick T. #N/A 176.25 132.20 23,648.50 Paralegals, Clerks, Library Staff and Other Non-Legal Staff Total #N/A 263.90 19,550.80 5,159,510.50

TOTAL BLENDED HOURS TOTAL PROFESSIONALS RATE BILLED COMPENSATION

Partners and of Counsel Total $ 641.09 $ 28,327.70 $ 18,160,572.50

Associates Total 348.15 86,552.50 30,133,099.00

Paralegals, Clerks, Library Staff and Other Non-Legal Staff Total 263.90 19,550.80 5,159,510.50 Blended Attorney Rate 420.38 Total Fees Incurred 134,431.00 53,453,182.00

Less 10% Public Interest Discount (5,345,318.20)

Grand Total $ 48,107,863.80 08-01789-brl Doc 4936-3 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit C Pg 1 of 2

EXHIBIT C

COMPENSATION BY WORK TASK CODE FOR SERVICES RENDERED BY BAKER & HOSTETLER LLP FOR NINTH INTERIM PERIOD OF OCTOBER 1, 2011 THROUGH JANUARY 31, 2012

Task/Matter Task/Matter Name HOURS AMOUNT 01 Trustee Investigation 722.60 $ 426,701.00 02 Bankruptcy Court Litigation and Related Matters 1,006.60 503,533.50 03 Feeder Funds 795.60 471,700.50 04 Asset Search Recovery and Sale 506.80 328,744.00 05 Internal Office Meetings with Staff 464.00 141,404.00 07 Billing 683.00 233,143.00 08 Case Administration 2,236.10 743,179.50 09 Banks 635.30 346,885.00 10 Court Appearances 0.20 170.00 11 Press Inquires and Responses 379.50 181,422.50 12 Document Review 8,861.60 2,593,516.00 13 Discovery - Depositions and Document Productions 6,345.70 2,467,113.50 14 International 987.70 479,058.50 15 Charities 3.20 1,590.00 17 Access - Luxembourg 771.70 212,807.00 18 Auditors 3.10 2,679.00 19 Non-Bankruptcy Litigation 11.60 9,719.50 20 Governmental Agencies 280.10 166,922.50 21 Allocation 85.60 59,294.50 000003 Stanley Chais 811.10 394,927.50 000004 J. Ezra Merkin 8,821.30 2,903,322.00 000005 Customer Claims (2009 - 2011) 2,257.80 1,025,209.00 000006 Vizcaya 394.20 173,971.00 000007 Madoff Family 3,049.70 1,513,795.00 000008 Norman Levy 7.50 2,749.00 000009 Fairfield Greenwich 3,157.50 1,020,393.00 000010 Harley 33.30 18,679.00 000011 Cohmad Securities Corporation 4,183.10 1,594,114.50 000012 Picower 286.30 169,606.00 000013 Kingate 2,113.00 1,157,918.50 000018 Thybo 381.90 194,549.00 000019 Ruth Madoff 2.40 1,898.50 000020 Carl Shapiro 93.50 37,222.00 000021 Avoidance Action Investigation/Litigation 2010-2012 22,138.70 8,730,021.00 000024 Robert Luria 3.50 1,629.50 000025 Amy Luria 0.50 294.00 000026 Richard Stahl 185.10 93,363.00 000027 JPMorgan Chase 1,541.30 618,032.00 000028 Westport 602.50 173,242.00 000029 Rye/Tremont 272.90 162,190.50 000030 HSBC 3,818.30 1,916,246.50 000031 Katz/Wilpon 38,103.70 15,129,969.00 000032 LuxAlpha/UBS 2,726.40 1,097,840.00 000033 Nomura Bank International PLC 17.80 7,767.00 000034 Citibank 245.20 113,332.00 000035 Natixis 735.20 325,562.00 000036 Merrill Lynch 162.80 39,053.50 000037 ABN AMRO 299.00 146,580.00 000038 Banco Bilbao 377.50 173,582.50 08-01789-brl Doc 4936-3 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit C Pg 2 of 2

Task/Matter Task/Matter Name HOURS AMOUNT 000039 Fortis 7.00 3,285.00 000040 Medici Enterprise 1,951.00 907,401.50 000041 Whitechapel 53.10 27,445.00 000042 Equity Trading 47.60 24,928.00 000043 Defender 30.70 16,194.00 000044 Maccabee 23.40 12,327.00 000045 Levey 68.30 36,911.50 000046 Glantz 470.30 240,090.00 000047 Bonaventre 25.50 12,519.00 000048 Bongiorno 63.30 30,640.00 000049 Greenberger 623.00 338,213.50 000050 Pitz 42.30 16,699.50 000051 Crupi 58.30 19,184.50 000052 Donald Friedman 3,853.60 1,058,978.00 000053 Magnify 842.50 382,045.50 000054 Mendelow 198.30 110,175.50 000055 Kugel 52.10 27,191.00 000056 Lipkin 72.80 25,728.50 000057 Perez/O'Hara 25.70 11,892.00 000058 PJ Administrators 203.40 90,398.00 000059 Stanley Shapiro 133.60 59,404.00 000060 Avellino & Bienes 180.30 91,279.50 000061 Maxam 2,245.50 976,331.00 000062 Subsequent Transfer 1,556.40 627,278.50 Grand Total 134,431.00 53,453,182.00

Less 10% Public Interest Discount (5,345,318.20)

Grand Total $ 48,107,863.80

Current Application Interim Compensation Requested $ 48,107,863.80 Interim Compensation Paid (43,297,077.43) Interim Compensation Deferred $ 4,810,786.37

Prior Applications Interim Compensation Requested $ 273,066,911.54 Interim Compensation Paid (245,760,220.40) Interim Compensation Deferred $ 27,306,691.14 08-01789-brl Doc 4936-4 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit D Pg 1 of 1

EXHIBIT D

EXPENSE SUMMARY BY BAKER & HOSTETLER LLP FOR NINTH INTERIM PERIOD OF OCTOBER 1, 2011 THROUGH JANUARY 31, 2012

E101 Copying (E101) 87,289.98 E102 Outside Printing (E102) 39,494.90 E104 Facsimile (E104) 29.90 E105 Telephone (E105) 13,032.96 E106 Online Research (E106) 172,585.27 E107 Delivery Services/ Messengers (E107) 14,257.87 E108 Postage (E108) 2,190.37 E109 Local Travel (E109) 5,427.58 E110 Out-of-Town Travel (E110) 190,338.56 E111 Business Meals, etc. (E111) 286.23 E112 Court Fees (E112) 14,777.76 E113 Subpoena Fees (E113) 1,825.29 E114 Witness Fees (E114) 240.00 E115 Deposition Transcripts (E115) 102,815.18 E116 Trial Transcripts (E116) 1,737.94 E119 Experts (E119) 4,885.12 E123 Other Professionals (E123) 36,084.29 E124 Other (E124) 13,324.66 E125 Translation Costs (E125) 165,311.58 E129 Official Fees (E129) 690.00 Grand Total 866,625.44

Prior Applications

Reimbursement of Expenses Requested and Rewarded$ 6,149,828.34 08-01789-brl Doc 4936-5 Filed 08/01/12 Entered 08/01/12 11:42:09 Exhibit E Pg 1 of 1

EXHIBIT E

INTERIM COMPENSATION DEFERRED SUMMARY FOR SERVICES RENDERED BY BAKER & HOSTETLER LLP FOR NINTH INTERIM PERIOD OF OCTOBER 1, 2011 THROUGH JANUARY 31, 2012

Counsel and Trustee

Interim Compensation Requested (All Periods) $ 321,174,775.34

Interim Compensation Deferred $ 32,117,477.51

Holdback Amount to be Released 16,000,000.00

Holdback After Release $ 16,117,477.51