08-01789-smb Doc 8490 Filed 11/17/14 Entered 11/17/14 18:57:21 Main Document Pg 1 of 4 Baker & Hostetler LLP 45 Rockefeller Plaza New York, NY 10111 Telephone: (212) 589-4200 Facsimile: (212) 589-4201 David J. Sheehan Attorneys for Irving H. Picard, Trustee for the Substantively Consolidated SIPA Liquidation of Bernard L. Madoff Investment Securities LLC and the Estate of Bernard L. Madoff UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK SECURITIES INVESTOR PROTECTION CORPORATION, Adv. Pro. No. 08-01789 (SMB) Plaintiff, SIPA LIQUIDATION v. (Substantively Consolidated) BERNARD L. MADOFF INVESTMENT SECURITIES LLC, Defendant. In re: BERNARD L. MADOFF, Debtor. IRVING H. PICARD, Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC, Adv. Pro. No. ________ (SMB) Plaintiff, v. DECLARATION OF KEITH R. MURPHY IN SUPPORT OF APPLICATION FOR A & G GOLDMAN PARTNERSHIP and PAMELA ENFORCEMENT OF THE GOLDMAN, PERMANENT INJUNCTION AND AUTOMATIC STAY Defendants. 08-01789-smb Doc 8490 Filed 11/17/14 Entered 11/17/14 18:57:21 Main Document Pg 2 of 4 KEITH R. MURPHY, under penalty of perjury, declares: 1. I am a member of the Bar of this Court and a partner at the firm of Baker & Hostetler LLP, counsel for Irving H. Picard, Trustee for the substantively consolidated liquidation of Bernard L. Madoff Investment Securities LLC (“BLMIS”) under the Securities Investor Protection Act, 15 U.S.C. §§ 78aaa, et seq. (“SIPA”), and the estate of Bernard L. Madoff (“Madoff”), individually. 2. As an attorney of record in these proceedings, I am fully familiar with the facts set forth herein. I make this declaration to provide certain information to the Court and to transmit true and correct copies of the documents identified herein. 3. The Picower Parties1 are simultaneously filing a related action that seeks enforcement of the Permanent Injunction against the Goldman Plaintiffs. The Picower Parties are filing a motion to consolidate their action with the Trustee’s action. The Trustee consents to the consolidation of the actions. Counsel for the Goldman Plaintiffs was unwilling to take a position on the proposed consolidation of the actions until after the actions are filed. 4. True and correct copies of the following documents are attached: Exhibit A: Complaint, Picard v. Picower, Adv. Pro. No. 09-1197 (Bankr. S.D.N.Y. May 12, 2009), ECF No. 1 Exhibit B: Memorandum of Law in Opposition to Defendants’ Partial Motion to Dismiss Under Fed. R. Bankr. P. 7012(b) and 7009, Picard v. Picower, Adv. Pro. No. 09-1197 (Bankr. S.D.N.Y. Sept. 30, 2009), ECF No. 11 Exhibit C: Memorandum of Law in Support of Motion for Entry of an Order Pursuant to Section 105(a) of the Bankruptcy Code and Rules 2002 and 9019 of the Federal Rules of Bankruptcy Procedure Approving an Agreement By and Between the Trustee and the Picower BLMIS Account Holders and Enjoining Certain Claims, Picard v. 1 Unless otherwise defined herein, defined terms have the meaning given to them in the Trustee’s Memorandum of Law in Support of Application for Enforcement of the Permanent Injunction and Automatic Stay, filed on November 17, 2014. 2 08-01789-smb Doc 8490 Filed 11/17/14 Entered 11/17/14 18:57:21 Main Document Pg 3 of 4 Picower, Adv. Pro. No. 09-1197 (Bankr. S.D.N.Y. Dec. 17, 2010), ECF No. 25 Exhibit D: Permanent Injunction Order and Exhibit, Picard v. Picower, Adv. Pro. No. 09-1197 (Bankr. S.D.N.Y. Jan. 13, 2011), ECF No. 43 Exhibit E: Fox v. Picower, Adv. Pro. No. 10-80252 (S.D. Fla.), Initial Complaint, filed Feb. 16, 2010 (ECF No. 1) (without exhibits), and Amended Complaint, filed Mar. 15, 2010 (ECF No. 5) (without exhibits) Exhibit F: Marshall v. Picower, Adv. Pro. No. 10-80254 (S.D. Fla.) (without exhibits), Initial Complaint, filed Feb. 17, 2010 (ECF No. 1), and Amended Complaint, filed Mar. 15, 2010 (ECF No. 7) (without exhibits) Exhibit G: Fox Plaintiffs’ Proposed Second Amended Complaint, Fox v. Picower, No. 10-80252 (S.D. Fla. Feb. 5, 2014), ECF No. 28-3 Exhibit H: Motions of A&G Goldman Partnership and Pamela Goldman to Determine Application of Automatic Stay and Exhibit A, Sec. Inv. Prot. Corp. v. Bernard L. Madoff Inv. Sec. LLC, Adv. Pro. No. 08- 1789 (Bankr. S.D.N.Y. Dec. 13, 2011), ECF Nos. 4580, 4581 Exhibit I: Oral Argument Transcript, Goldman v. Picard, No. 12-6109 (S.D.N.Y. Sept. 24, 2013), ECF No. 34 Exhibit J: “Goldman II” Docket as of November 17, 2014, Goldman v. Capital Growth Co., No. 14-80012 (S.D. Fla. filed Jan. 6, 2014) Exhibit K: Complaint for Declaratory Judgment (without exhibits), Goldman v. Picower, No. 14-80012 (S.D. Fla. filed Jan. 6, 2014), ECF No. 1 Exhibit L: Second Goldman Complaint, Goldman v. Capital Growth Co., No. 14-80012 (S.D. Fla. filed Jan. 6, 2014), ECF No. 1-2 Exhibit M: “Goldman III” Docket as of November 17, 2014, Goldman v. Picard, No. 14-81125 (S.D. Fla. filed Aug. 28, 2014) Exhibit N: Third Goldman Complaint, Goldman v. Capital Growth Co., No. 14-81125 (S.D. Fla. filed Aug. 28, 2014), ECF No. 1 Exhibit O: Joint Stipulation and Agreed Motion for Stay, Goldman v. Capital Growth Co., No. 14-81125 (S.D. Fla. Sept. 24, 2014), ECF No. 4 3 08-01789-smb Doc 8490 Filed 11/17/14 Entered 11/17/14 18:57:21 Main Document Pg 4 of 4 Exhibit P: Order on Joint Stipulation and Agreed Motion for Stay, Goldman v. Capital Growth Co., No. 14-81125 (S.D. Fla. Sept. 29, 2014), ECF No. 6 I declare under penalty of perjury that the foregoing is true and correct. Executed on November 17, 2014 New York, New York _______/s/ Keith R. Murphy____ Keith R. Murphy 4 08-01789-smb Doc 8490-1 Filed 11/17/14 Entered 11/17/14 18:57:21 Exhibit A Pg 1 of 59 EXHIBIT A 09-01197-smb08-01789-smb Doc Doc 1 8490-1 Filed 05/12/09 Filed 11/17/14 Entered Entered 05/12/09 11/17/14 18:13:48 18:57:21 Main Document Exhibit A PgPg 21 ofof 5940 Baker & Hostetler LLP 45 Rockefeller Plaza New York, NY 10111 Telephone: (212) 589-4200 Facsimile: (212) 589-4201 David J. Sheehan Email: [email protected] Marc E. Hirschfield Email: [email protected] Attorneys for Irving H. Picard, Esq., Trustee for the SIPA Liquidation of Bernard L. Madoff Investment Securities LLC UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: SIPA LIQUIDATION BERNARD L. MADOFF INVESTMENT No. 08-01789 (BRL) SECURITIES LLC, Debtor. IRVING H. PICARD, Trustee for the Liquidation Adv. Pro. No. __________ (BRL) of Bernard L. Madoff Investment Securities LLC, Plaintiff, v. JEFFRY M. PICOWER, individually and as trustee for the Picower Foundation; BARBARA PICOWER, individually and trustee for the Trust FBO Gabrielle H. Picower and the Picower Foundation; CAPITAL GROWTH COMPANY; FAVORITE FUNDS; JA PRIMARY LIMITED PARTNERSHIP; JA SPECIAL LIMITED PARTNERSHIP; 09-01197-smb08-01789-smb Doc Doc 1 8490-1 Filed 05/12/09 Filed 11/17/14 Entered Entered 05/12/09 11/17/14 18:13:48 18:57:21 Main Document Exhibit A PgPg 32 ofof 5940 JAB PARTNERSHIP; JEMW PARTNERSHIP; JF PARNERSHIP; JFM INVESTMENT COMPANY; JLN PARTNERSHIP; JMP LIMITED PARTNERSHIP; JEFFRY M. PICOWER SPECIAL CO.; JEFFRY M. PICOWER, P.C.; DECISIONS INCORPORATED; THE PICOWER FOUNDATION; THE PICOWER INSTITUTE FOR MEDICAL RESEARCH; THE TRUST FBO GABRIELLE H. PICOWER; and DOES 1-25. Defendants. COMPLAINT Irving H. Picard, Esq. (the “Trustee”), as trustee for the liquidation of the business of Bernard L. Madoff Investment Securities LLC (“BLMIS”), under the Securities Investor Protection Act, 15 U.S.C. §§ 78aaa, et seq. (“SIPA”), by and through his undersigned counsel, for his Complaint, states as follows: NATURE OF PROCEEDING 1. This adversary proceeding arises from the massive Ponzi scheme perpetrated by Bernard L. Madoff (“Madoff”). In early December 2008, BLMIS generated client account statements for its nearly 7,000 client accounts at BLMIS. When added together, these statements purportedly show that clients of BLMIS had approximately $64.8 billion invested with BLMIS. -2- 09-01197-smb08-01789-smb Doc Doc 1 8490-1 Filed 05/12/09 Filed 11/17/14 Entered Entered 05/12/09 11/17/14 18:13:48 18:57:21 Main Document Exhibit A PgPg 43 ofof 5940 In reality, BLMIS had assets on hand worth a small fraction of that amount. On March 12, 2009, Madoff admitted to the fraudulent scheme and pled guilty to 11 felony counts. Defendants received avoidable transfers from BLMIS, and the purpose of this proceeding is to recover the avoidable transfers received by one or more of the Defendants. 2. Jeffry Picower (“Picower”) was a beneficiary of this Ponzi scheme for more than 20 years. Since December 1995, he and the other Defendants collectively profited from this scheme through the withdrawal of more than $6.7 billion dollars. The Trustee’s investigation to date has revealed that at least five billion dollars of this amount was fictitious profit from the Ponzi scheme. In other words, Defendants have received, at a minimum, more than five billion dollars of other people’s money. 3. Among other reasons, Defendants knew or should have known that they were profiting from fraud because of the implausibly high rates of return that their accounts supposedly achieved. Picower was one of a handful of BLMIS clients with special access to information from BLMIS, including access to information about BLMIS’ ‘target’ rates of return for Defendants’ accounts.