Irving H. Picard v. Saul B. Katz et al Doc. 174 UNITED STATES DISTJUCT COURT SOUTHERN DISTRICT OF NEW YORK Adv. Pro. No. 08-01789 (BRL) BERNARD L. MADOFF I:\TVESTMENT SIPA LIQUIDATIO"N SECURITIES LLC. Debtor, I (Substantively Consolidated) -r-R-V-IN-O-H-.ＭｐＭｉｃＭＮＭｇ｜ＬＭｒｄＭＬＭｔＭｲｵＭｳＭｴＭ･･ＭｦＬＭｯＭｲＭｴｨＭ･ＭｌＭｩＭｱＭｵＭｩ､ＭＺＭ｡ＭｴｩＭｯｮＭｯｾｦＭｩｬ＠ Adv. Pro. 1'\0. 10-5287 (BRL) Bernard L. lv!ad 0 ffInvestment Sceuri ti es L LC , I Plaintiff. v. 11-CV-03605 (JSR) (HBP) SAUL B. KATZ, et aL Defendants. PROPOSED JOINT PRETRIAL CONSENT ORDER Pursuant to Rule 4 of the Court's Individual Rules of Practice, Irving H. Picard (the "Trustee"), as trustee for the liquidation of the business of Bernard L. ｾｬ｡､ｯｦｦｉｮｶ｣ｳｴｭ｣ｮｴ＠ Securities LLC C'BL\lIS'} under t:le Securities Investor Protection Act, 15 U.S.c. §§ 78aaa. el seq. ("SIPA") and Bernard L. ivfadoff ("Madoff'), by and through his counsel Baker & Hostetler LLP, and Defendants Saul B. Katz et al., by and through their counsel Davis Polk & Wardvvell LLP, hereby submit their Proposed Joint Pretrial Consent Order as follows: A. A Stntement of the Facts and other Matters on which the Parties Agree The patties' joint statement of facts and other matters 0:1 ｶｶｾｩ｣ｨ＠ the parties agree is attached as Exhibit:. B. A Particularized ｄ｣ｾ｣ｲｩｰｴｩｯｮ＠ of Each Party's Remaining Claims The Trustee's remaining claims are as follows: Count One: In Count One of his Second Amended Complaint, the Trustee seeks to Dockets.Justia.com avoid and recover intentional fraudulent transfers (the "Transfers") made by BLMIS to the following Defendants pursuant to sections 548(a)(1 )(A), 550(a) and 551 of the United States Bankruptcy Code, 11 V.S.c. §§ 101 el seq. (the "Bankruptcy Code") and section 78fff-(2)(c)(3) of SIPA: Amy Beth Katz Jeffrey Wilpon Sterling 10 LLC Arthur Friedman Judith Wilpon Sterling 15C LLC Charles Sterling Sub LLC Judy and Fred Wilpon Family Sterling 20 LLC Foundation, Inc. College Place Enterprises Sterling Acquisitions LLC LtC Katz 2002 Descendants' Trust Sterling American Advisors II David Katz L. Thomas Ostcnnan LP Dayle Katz Marvin B. Tepper Sterling American Property V LP Debra Wilpon Mets Limited Part..nership Sterling Brunswick Seven Dcyva Schreier Arthur Michael Katz LLC Edward M. Tepper Natalie Katz O'Brien Sterling DIST Properties LLC Elise C. Tepper Philip Wachtler Sterling Equities Associates Estate of Leonard Schreier Phyllis Rebell Osterman Sterling Internal V LLC FFB Aviation LLC Red Valley Partners Sterling 1vfets LP Fred Wilpon Richard Wiipon Sterling Thirty Venture LLC Fred Wilpon Family Trust Robbinsville Park LtC Sterlir,g Tracing LLC FS Company LLC Robir. Wilpon Wachtler Sterling Twenty Five LLC Gregory Katz Ruth Friedman Sterling VC IV LLC Iris J. Katz and Saul B. Katz Saul B. Katz Sterling VC V LLC Family Foundation, Inc. Saul B. Katz Family Trust Valerie \Vilpon Ins Katz SEE Holdeo LLC Wilpon 2002 Descendants' Jacqueline G. Tepper Trust - 2 - Specifically, the Trustee seeks to avoid and recover all transfers of customer property made by BLMIS to the foregoing Defendanrs with the intent to hinder, delay or defraud its creditors, including all transfers representing the return of "principal" totaling 2lpproximately $303,399,001 predicated on Defenda.'1ts' willful blindness to fraudulent activity a1 BLMTS.: Defendants dispute the Trustee's claims. Count Nine: In Count Nine of his Second Amended Comp1aint, the Trustee seeks the recovery of the Transfers ｳｵ｢Ｕ･ｱｵ･ｮｾｬｹ＠ transferred by Defendants to the following defendants totaling approximately $118,543,998 pursuant to section 550(a) of the Bankruptcy Code, and section 78fff-2(c)(3) of SIPA: Amy Beth Katz Heather Katz Knopf Red Valley Partners Arthur Friedman Howard Katz Richard Wilpon Daniel Wilpon Iris J. Katz and Saul B. Katz Robin Wilpon Wachtler Family Foundation, Inc. David Katz Ruth Friedman Jeffrey Wilpon Dayle Katz Saul B. Katz Jessica Wilpon Edward M. Tepper Saul B. Katz Family Trust Katz 2002 Descendants' Trust Elise C. Tepper Scott Wilpon L Thomas Osterman Estate of Leonard Schreier Todd KatZ Marvin B. Tepper FFB Aviation LLC Valerie Wilpon :\1ichael Katz Fred Wilpon Wilpon 2002 Descendants' :-.fatalic Katz O'Brien Trust Fred Wilpon Family Trust Philip Wachtler Gregory Katz Defendants dispute the Trustee's claims. 1 By Order dated I'vfarch 5, 2012, this Court granted the Trustee's Partial Motion for Summary Judgment on the basis set forth in the Order. - 3 - Count Eleven: In Count Eleven of his Second Amended Complaint the Trustee seeks to equitably subordinate the SIP A claims filed by the following Defendants pursuant to section 510(c)(1) of the Bankruptcy Code: Amy Beth Katz Tris Katz Saul B. Katz Family Trust Arthur Friedman Jacqueline G. Tepper Seott Wilpon Bon Mick Family Partners LP Jeffrey Wilpon SEE Haldeo LLC Bruce Wilpon Jessica \Vilpon Sterling 10 L L C Charles Sterling Sub LLC Judith \Vilpon Sterling 15C LLC College Place Enterprises Judy and Fred Wilpon Family Sterling 20 LLC LLC Foundation, Inc. Sterling Brunswick Seven Daniel \Vilpon Katz 2002 Descendants' Trust LLC David Katz L. Thomas Osterman Sterling DIST Properties LLC Dayle Katz Marvin B. Tepper Sterling Equities Debra \\i'ilpon Mets II LLC Sterling Internal V LLC Deyva Schreier Arthur Mets Limited Partnership Sterling Mets LP Elise C. Tepper i'vllchael Katz Sterli!'lg Thirty Venture LLC Estate of Leonard Schreier Natalie Katz O'Bric:1 Sterling Tracing LLC FFB Aviation Ltc Philip \Vachtler Sterling Twenty Five LLC Fred Wilpon Phyllis Rebell Ostem1an Sterling VC IV LLC Fred Wilpon Family Trust Red Valley Partners Sterling VC V LLC FS Company LLC Richard Wilpon Todd Katz Gregory Katz Robbins'vme Park LLC Valerie Wilpon Heather Katz Knopf Robin Wilpon Wachtler \Vi]pon 2002 Descendants' Howard Katz Ruth Friedman Trust Iris J. Katz and Saul B. Katz Saul B. Katz Family Foundation, lnc. Specifically, the Trustee alleges that the foregoing Defendants have engaged in inequit.1.ble conduct that has resulted in injury to the customers and creditors of BLMJS' estate and has confened an unfair advantage on these Defendants. Based on these Defendants' inequitable conduct the customers of BLMIS have been misled as to the true financial condition of BLMIS, customers have been induced 10 invest \vithout knowledge of the actual facts regarding BLMIS' financiai condition, and/or customers and creditors are less likely to recover the full amounts duc 10 them because of the conduct of the Defendants. Defendants dispute the Trustee's claims. C. Each Party's Specific Contentions as to the Facts that are in Dispute. The Trust€c'S contentions are attached as Exhibit 2(A). The Defendants' contentions are attached as Exhibit 2(B). D. A Particularized Statement of the Damages Claimed, including amounts, for each Claim. Counterclaim, Cross-claim, or Third-party claim. Fraudulent transfers in the amount ｯｦｓＳＰＳｊＹＹｾｏｏｬＮ＠ Subsequent transfcrs of the fraudulent transfers in the amount ofS1 ] 8,543,998. Prejudgment interest from the initiation of the adversary proceeding as to any fraudulent transfer claims. Defendants dispute these amounts, E. A List of the Names of the \Vitnesses (both fact witnesses and expert witnesses) that Each Party Intends to ｃ｡ｬｬｾ＠ in the Likely Order of Appearance. The Trustee's witness list is attached as Exhibit 3(A). The Defendants' witness list is attached as Exhibit 3(B). F. A List of All Exhibits to be Offered by Each Party. and Particularized Objections thereto Noted in accordance with Fed. R. Civ. P. 26(a)(3}. The Trustee's witness list is attached as Exhibit 4(A}. The Defendants' \vitness list is attached as Exhibit 4(B). G. A Final Estimate of the Length of Trial. The Parties estimate that the trial \\·ill take approximately 10 business days. - 5 - Dated: March 12, 2012 New York, New York BAKER & HOSTETLER LLP DAVIS POLK & \VARD\VELL LLP By: IslDavid J Sheehan By: Is!Robert F. lFise David J. Sheehan Robert F. Wise Regina L. Griffin Karen Wagner Fernando A. Bohorquez Dana :\>1. Seshens 45 Rockefeller Plaza 450 Lexington Avenue New York. New York 10111 New York, New York J0017 Telephone: (212) 589-4200 Telephone: (212) 450-4000 Facsimile: (212) 589-420 J Facsimile: (212) 701-58000 Attorneys for Irving Ii Picard. TrUsTee for the Attorneys for Defendants Substanth'ely Consolidated SIPA Liquidation ofBernard L. lvfadofl1nvestment Securities LLC al1d Bernard 1. AfadofJ - 6 - Exhibit 1 Exhibit 1 to Pretrial CO,nsent Order Picard P. Saul B. Katz. et al., ll-CV-0360S (JSR Statement of Facts and Other Matters on which the Parties Agree' 1. Sterling Equities is a general partnership founded in 1972 hy brothers-in-law Fred Wilpon and Saul Katz. 2, The general partners of Sterling Equities include Defendants Saul Katz, Fred Wilpon. Michael Katz, Richard \Vilpon, David Katz, Thomas Osterman, Jeffrey Wilpon, Arthur Friedman, Gregory Katz, Marvin B Tepper, and the Estate of Leonard B, Sc11reier ("Sterling Partners"). 3. The Sterling Partners and various related entities OVvl1 and operate a number of busincsses and invest in asset classes that include real estate, professional baseball, sports media, and private equity, These businesses involve, among other things, the purchase, development, and management of commercial and residential reaJ estate, both directly and througl1 the Sterling American Property ("SAP") funds, oVvl1ership of the New York ｾＬＬＱ･ｴｳ＠ baseball franchise, a mc..jority ownership interest in SportsNet Nev,! York ("SNY"), private equily and venture capital investments, and an ovvnership interest in the :fund of funds Sterling Stamos Partners ("Sterling Stamos"). 4. The Sterling Partners acquired their first interest in the :\o1ets in 1980, In or around August 2002, the Sterling Partners acquired fuII ownership of the Mets, 5, Saul Katz currently serves as President and Chief Operating Officer of Sterling Equities and as President of the New York r..-Iets and the Brooklyn Cyclones.