Preview
FILED: NEW YORK COUNTY CLERK 02/07/2023 06:40 PM INDEX NO. 651295/2021
NYSCEF DOC. NO. 273 RECEIVED NYSCEF: 02/07/2023
EXHIBIT 2
FILED: NEW YORK COUNTY CLERK 02/07/2023 06:40 PM INDEX NO. 651295/2021
NYSCEF DOC. NO. 273 RECEIVED NYSCEF:
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1
SUPREME COURT OF THE STATE OF NEW YORK
2 COUNTY OF NEW YORK - CIVIL TERM - PART 53
---------------------------------------------X
3 DOMINUS MULTIMANAGER FUND, LTD.
4 Plaintiff, Index No.
-against- 652906/2022
5
INFINITY Q CAPITAL MANAGEMENT LLC,
6 Defendant
---------------------------------------------
7 Motion 60 Centre Street
New York, New York
8 October 17, 2022
9
B E F O R E:
10
HONORABLE ANDREW BORROK,
11
Supreme Court Justice
12
A P P E A R A N C E S:
13
ROBBINS GELLER RUDMAN & DOWD LLP
14 Attorneys For the Plaintiff
58 South Service Road, Suite 200
15 Melville, NY 11747
BY: BRIAN E. COCHRAN, ESQ.
16 ERIC NIEHAUS, ESQ.
17 SCOTT +SCOTT ATTORNEYS AT LAW LLP
Attorneys For the Plaintiff
18 156 South Main Street
PO Box 192
19 Colchester, CT 06415
BY: THOMAS LAUGHLIN, ESQ.
20 JACOB LIEBERMAN, ESQ.
21 THE ROSEN LAW FIRM, P.A.
Attorneys For the Plaintiff
22 275 Madison Avenue, 40th Floor
New York NY 10016
23 BY: PHILLIP KIM, ESQ.
MICHAEL COHEN, ESQ.
24
(Whereupon, appearances continued on the following page.)
25
Senior Court Reporter Cheryl-Lee Lorient Courtminutes@outlook.com
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1 Cont'd Appearances .....
2
MORGAN, LEWIS & BOCKIUS, LLP
3 Attorneys For the Defendants
Trust for Advised Portfolios,
4 Infiniti Diversified Alpha Fund,
Christopher Kashmerick,
5 Russel Simon & Steven Jensen
101 Park Avenue
6 New York NY 10178
BY: SUSAN F. DICICCO, ESQ.
7 BRYANT ANTHONY, ESQ.
8
VEDDER PRICE P.C.
9 Attorneys for the Defendant
U.S. Bancorp Fund Services
10 1633 Broadway, 31st Floor
New York NY 10019
11 BY: THOMAS CIMINO, ESQ. (Pro Hac Vice)
JOSHUA DUNN, ESQ.
12
13 MORRIS KANDINOV
Attorneys for Intervenor
14 3391 Mountain Road
Stowe, VT 05672
15 BY: AARON MORRIS, ESQ.
16
PETRILLO KLEIN & BOXER LLP
17 Attorney for Defendant
Scott Lindell
18 655 3rd Avenue
New York NY 10017
19 BY:JOSH KLEIN, ESQ.
20
MILBANK
21 Attorney for Defendant
Infinity Q Capital Management Leonard Potter
22 Boderman Family Limited Partnership
55 Hudson Yards
23 New York NY
BY: SEAN MURPHY, ESQ.
24
(Whereupon, appearances continued on the following page.)
25
Senior Court Reporter Cheryl-Lee Lorient Courtminutes@outlook.com
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1
Cont'd Appearances .....
2
DAVIS WRIGHT TREMAINE LLP
3 Attorneys for the Defendant
Quasar Distributors, LLC
4 1251 6th Avenue, 21st Floor
New York NY
5 BY: JAMES. K. GOLDFARB, ESQ.
6
FAEGRE DRINKER BIDDLE & REATH LLP
7 Attorneys for the defendants
Eisner Amper LLP
8 1777 6th Avenue, 41st Floor
New York NY
9 BY: BILL CONNOLLY, ESQ.
10
ARNOLD & PORTER KAYE SCHOLER LLP
11 Attorneys for the Defendant
250 West 55th Street
12 New York NY
BY: VERONICA E. CALLAHAN, ESQ.
13
14 DUANE MORRIS
Attorneys for the Defendant
15 230 Park Avenue, Suite 1130
New York, NY 10169
16 BY: MICHAEL A. CABIN, ESQ.
17
18
CHERYL-LEE LORIENT
19 SENIOR COURT REPORTER
20
21
22
23
24
25
Senior Court Reporter Cheryl-Lee Lorient Courtminutes@outlook.com
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1 THE COURT: Dominus Multimanager Fund Ltd.
2 versus Infiniti Q Capital Management LLC, 652906-2022.
3 Your appearances for the record please.
4 MR. COCHRAN: Brian Cochran, from Robbins
5 Geller, on behalf of plaintiffs.
6 MR. LAUGHLIN: Thomas Laughlin, from Scott &
7 Scott, on behalf of plaintiffs.
8 MR. KIM: Phillip Kim, The Rosen Law Firm on
9 behalf of plaintiffs. Good morning, your Honor.
10 THE COURT: Good morning.
11 MS. DICICCO: Susan DiCicco; Morgan Lewis &
12 Bockius, and Bryant Anthony, for Trust for Advised
13 Portfolios, Infiniti Diversified Alpha Fund,
14 Mr. Kashmerick, Mr. Simon and Mr. Jensen.
15 THE COURT: Okay.
16 MR. CIMINO: Good morning, your Honor. Tom
17 Cimino; Vedder Price for U.S. Bancorp Fund Services.
18 THE COURT: Good morning.
19 MR. MORRIS: I don't have a microphone, your
20 Honor. But I'm Aaron Morris from Morris Kandinov.
21 THE COURT: Unfortunately, you're going to
22 have to step up to the microphone, because to the
23 extent that there are folks participating through the
24 technology, they won't hear you unless you speak into
25 the microphone. So I appreciate you stepping up, just
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1 for that purpose. Thank you.
2 MR. MORRIS: Fair enough. I represent the
3 intervener, Charles Sherck. He's another investor in
4 the fund. He is intervening to object to the
5 settlement.
6 THE COURT: Okay.
7 MR. MORRIS: I'd just like a few moments
8 with you, at some point in the hearing, to discuss our
9 argument with you regarding this settlement.
10 THE COURT: Okay. Sure, of course. Is
11 there anybody else who wants to put their appearance on
12 the record now? I see a full room of people. No.
13 Okay. Great.
14 So counsel, I'll hear you.
15 MR. LAUGHLIN: Good morning, your Honor.
16 Tom Laughlin from the mutual fund case. We are
17 proposing that this Court enter an order granting --
18 THE COURT: I'm sorry. You're going to have
19 to speak a little louder. My reporter is indicating,
20 in fact, I think she's gesticulating that she'd prefer
21 you to go to the podium. So if you don't mind doing
22 it. The microphone may work better from there.
23 MR. LAUGHLIN: So, which we believe it's --
24 (Pause in proceeding.)
25 MR. LAUGHLIN: Take two. Good morning, your
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1 Honor. Thomas Laughlin from Scott & Scott. Lead
2 counsel for the mutual fund case.
3 We're asking this Court to enter an order
4 granting preliminary approval of the proposed
5 settlement which we believe is fair, reasonable and
6 adequate.
7 With me today is my colleague, Brian Cochran,
8 from Robbins Geller, who has brought the hedge fund
9 case to State Court who's before you in that case and
10 is also counsel in the federal action who will be here
11 making the arguments today.
12 THE COURT: Okay.
13 MR. COCHRAN: Good morning, your Honor. May
14 it please the Court. As your Honor is aware, this case
15 involves two investment funds that, essentially, blew
16 up; a mutual fund and a related hedge fund.
17 Both of those funds are currently in
18 liquidation mode. They also currently hold hundreds of
19 millions of dollars, both of the funds, that belong to
20 investors. So they are in cash preservation mode.
21 The managers for the funds are withholding
22 the distribution of that money until the resolution of
23 legal liabilities. They're, essentially, reserving for
24 legal liabilities. There's a number of
25 indemnifications amongst the various defendants,
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1 potential crossclaims, that they may have.
2 So the resolution of this case not only is it
3 a fantastic result, under the circumstances, which I'll
4 talk about in a moment, it's also critical to
5 understand the context; which is that continued
6 prosecution is, essentially, depleting the available
7 insurance proceeds.
8 Our objective is to try to grow a pot through
9 the contribution of those insurance proceeds, but also
10 to reach a resolution expeditiously so that the
11 hundreds of million of dollars can be distributed as
12 quickly as possible.
13 The SEC is also overseeing -- and counsel for
14 the trust will be able to speak to this -- to ensure
15 that this is done as expeditiously as possible as well.
16 So, that's the context.
17 The settlement was reached, after nine months
18 of intense negotiation -- overseen by Robert Meyer,
19 respected Mediator Ganz in this case -- and very, very
20 contentious filing of amended pleadings.
21 As your Honor is aware, there is a parallel
22 federal case. There has been a consolidated complaint
23 filed in that case as well, the filing of a hedge fund
24 complaint, partial briefings of motions to dismiss.
25 To date, we've received over 300,000
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1 documents produced by the parties. We've reviewed
2 about 100,000 of them so far. And, at the end of it, I
3 believe we were able to achieve really a remarkable
4 result.
5 THE COURT: I noticed or I was made aware,
6 this morning, that there is an objector to the proposed
7 settlement.
8 Have you had an opportunity to get together
9 and talk about what the objections to the proposed
10 settlement are and why you think, notwithstanding the
11 objections, that, the Court should indicate that this
12 should go forward with a fairness hearing?
13 MR. COCHRAN: Yes, your Honor. We've had
14 conversations with counsel for the proposed intervener.
15 The proposed intervener is the purported
16 investor in the mutual fund. He has filed a parallel
17 class action.
18 So he's not just any objector class member
19 coming in. He has his own case which was filed a year
20 after this case was initiated. After the fact that the
21 parties were in settlement negotiations was publically
22 revealed. And he has told me that he believes overall
23 it's a great result.
24 The issue that he's articulated to me is that
25 he believes one of the defendants, which is the
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1 defendant who he has chosen to sue in a separate
2 proceeding, has not contributed enough to the overall
3 settlement. So just to go over some of the
4 specifics --
5 THE COURT: Could you please. And then, I'm
6 going to give him an opportunity to explain to me what
7 his concerns are. I may require the parties to submit
8 some forms of briefing on the issue. But, go ahead.
9 MR. COCHRAN: So the settlement is up to
10 $48 million; 39.75 million which is guaranteed.
11 THE COURT: Right.
12 MR. COCHRAN: So the objector has pointed to
13 the cash contribution, the $250,000 cash contribution,
14 from the Bancor. But they're ignoring that U.S. Bancor
15 affiliated defendants are contributing over $7 million
16 to the settlement.
17 It's wrong. The position is wrong on a
18 number of factual issues. The position that they've
19 taken is that, essentially, they were at the center of
20 the fraudulent scheme. In reality, they were the
21 administer of the fund.
22 So, just to take one example of their role,
23 they made a few hundred thousand dollars a year in,
24 essentially, administering the fund; so, putting
25 together the NAV for example. The investment advisory
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1 who's contributing over $18 million to the settlement,
2 was doing the pricing.
3 So, as a factual matter, it's not correct.
4 They point to, well they have certain trustees on the
5 valuation committee.
6 We're getting, virtually, every penny of
7 available insurance for those trustees. And if we
8 continue to pursue the claims against U.S. Bancor that
9 number will go down.
10 The auditors are contributing up to
11 $22 million; which is extraordinary at this phase of
12 the proceedings in this type of a case. And the idea
13 that you can simply excise a single defendant is wrong.
14 You can't. If that happens, there is no settlement.
15 And that's because, among other reasons, U.S.
16 Bancor has an indemnification agreement with the
17 trust. And while counsel for Mr. Sherck believes that,
18 that indemnification agreement is not applicable, the
19 trust believes it is.
20 So until you get a judgment, essentially,
21 validating that indemnification agreement, the trust is
22 paying and indemnifying those claims.
23 And there is a risk that even if you were to
24 get a judgment, that would come out of shareholders own
25 money which is sitting in the trust.
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1 But the more important issue for today is
2 that there is a process and there is a briefing process
3 to flush out all those issues.
4 They're very complex factual issues. There's
5 also legal issues; whether being simply an
6 administrator is sufficient for liability under the
7 Securities Act or the Exchange Act which are the claims
8 that are being settled in this case.
9 And, that militates in favor of granting
10 preliminary approval so that notice may issue and the
11 process for airing those objections may proceed.
12 That's part of the fairness approval process.
13 The First Department has been clear.
14 Preliminary approval is not the stage to decide the
15 fairness and adequacy issues. They should be done on a
16 full record; subject to briefing, subject to notice.
17 So that other investors too have a chance to weigh in
18 on the settlement.
19 THE COURT: There may be other objections.
20 MR. COCHRAN: There may be other objections.
21 And we will respond to those in due course. But, the
22 standard for today is whether the settlement is
23 arguably beneficial. There's no question it is. They
24 have conceded it is. And it's imperative that notice
25 get issued so that the class can be apprized of the
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1 settlement.
2 And one other point that I think is crucial
3 here, the settlement expressly excludes the case
4 brought by Mr. Sherck's counsel.
5 THE COURT: So, from your perspective,
6 they're not, in any way, affected by virtue of the
7 settlement, ultimately, being approved. Because it's
8 like any opt out.
9 MR. COCHRAN: It's like any opt. They can
10 opt out. And that's the law on intervention is that
11 they can simply opt out of the settlement.
12 THE COURT: That sounds compelling.
13 MR. COCHRAN: And in addition, your Honor,
14 keep in mind, Sherck's counsel has a parallel
15 derivative case. So they're trying to kind of play
16 both sides of it.
17 THE COURT: I understand.
18 MR. COCHRAN: The claims that they're
19 talking about and that counsel will get up here and
20 discuss in a moment, for Mr. Sherck, are derivative
21 claims. They're claims that -- and, we have excluded
22 those expressly from the settlement. So those can be
23 tested. Those can be pursued to the extent he believes
24 there's merit to those claims.
25 The administrative agreement was with the
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1 trust. There's a derivative case on behalf of the
2 trust in which those claims could be pursued.
3 In addition, we've excluded the special
4 litigation committee which is also about those claims.
5 But, it's important because those are not the types of
6 claims that are being settled and released here today.
7 We are dealing with the purchaser's claims
8 and misrepresentation claims. And it's a very, very
9 different standard. The standard of liability under
10 the Securities Act, as your Honor knows very well, is
11 limited. It's limited because it's a negligence
12 standard.
13 So, you look at Section 11, there's
14 enumerated categories of defenses. "Administrator" is
15 not one of the categories. So you have to try to fit
16 them into one of the other boxes; under 12(a)(2), you
17 have to be a solicitor or seller. And under 10(b),
18 which is in my case in Federal Court, you have to have
19 ultimate authority over the State.
20 There are two Supreme Court cases that have
21 dealt with this issue "Janus" and "Stoneridge." So to
22 the extent that he believes that there are valid claims
23 to the ineffective administration of the fund, he is
24 free to pursue those claims.
25 To the extent that he has issues in terms of
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1 the misrepresentation aspect of the case, it is a full
2 package and it is a good number as his counsel has
3 admitted to me. And if he has particular objections,
4 there is a process. And I think it is imperative --
5 THE COURT: Right. You would discuss the
6 briefing schedule that's in your proposed order, right?
7 MR. COCHRAN: Yes, your Honor.
8 THE COURT: Okay. I got it.
9 MR. COCHRAN: Thank you, your Honor.
10 THE COURT: Yes, sir.
11 MR. MORRIS: Your Honor, I'm going to try to
12 make that a little less compelling.
13 THE COURT: Okay.
14 MR. MORRIS: Let me start with the
15 procedural issue.
16 THE COURT: Sure.
17 MR. MORRIS: Should I start somewhere else?
18 THE COURT: No, you start wherever you want.
19 MR. MORRIS: I think the time is now. And
20 here is why.
21 THE COURT: Okay.
22 MR. MORRIS: The way this deal is
23 structured, investors will have to choose. It's not as
24 easy just to opt out. They'll have to choose whether
25 to opt out of the entire deal --
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1 And there's serious money on the table from
2 other defendants here. There's almost nothing on the
3 table from the primary entity responsible for the loss
4 that is at issue in this case. That's U.S. Bank.
5 That's who my client has sued in their home
6 state in Wisconsin. That case is the first case filed
7 against U.S. Bank.
8 THE COURT: And what are the nature of those
9 claims?
10 MR. MORRIS: What's that?
11 THE COURT: What are the nature of those
12 claims?
13 MR. MORRIS: Those are securities claims
14 based on misrepresentations about the valuation of this
15 fund's securities in a prospectus. U.S. Bank was
16 responsible for the funds in the SEC filings.
17 U.S. Bank runs all of the operations of this
18 fund except for Portfolio Management. That's what
19 Infiniti Q manager runs.
20 U.S. Bank is central. They ran the
21 securities valuation, the NAV publication, the SEC
22 filings. That's why we keyed in on it immediately.
23 They weren't named in this case. They still aren't.
24 THE COURT: So I take it you plan on
25 objecting to the settlement and filing papers; and, I
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1 get to read this in the papers and you'll explain it to
2 me in the papers, right?
3 MR. MORRIS: Well, I'm taking the long way
4 there, your Honor. But what I'm circling to is, the
5 structure would require investors to either object to
6 the settlement or opt out, entirely, as to the
7 $48 million from other defendants that may have no
8 objections.
9 THE COURT: I might not approve the
10 settlement, right, if I don't think it's fair and
11 reasonable under the circumstances, if I find your
12 arguments compelling as to why, as you say, the primary
13 wrongdoer isn't paying their fair share?
14 MR. MORRIS: That's true. But why go to the
15 time, expense and resource?
16 THE COURT: Because that's typically the way
17 this is done, right? My job is to protect the absent
18 class members, right?
19 And I want to hear what everybody has to say.
20 And they may have, when they see your stated
21 objections, they may have a response to your stated
22 objections. Shouldn't they get to do that?
23 MR. MORRIS: Well, we, certainly, have
24 already heard from institutional and other retail
25 investors that they don't understand why this proposed
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1 deal, the number is so low as to U.S. Bank. But your
2 Honor, I admit that would be the traditional way, but
3 here it's different because --
4 THE COURT: Tell me why.
5 MR. MORRIS: -- there's a, first filed, case
6 against this entity in Wisconsin. It's being litigated
7 to a judgment or settlement.
8 This party is not a defendant in this case.
9 There's no reason why it should be part of this deal.
10 Now, they subsequently added the party in the federal
11 case, but we're, essentially, here because these
12 plaintiffs are overreaching in the scope of the deal
13 they're trying to get your Honor to approve.
14 THE COURT: But, didn't I hear that they've
15 carved out your claims entirely?
16 MR. MORRIS: No. In fact, it's the
17 opposite. They've carved out the Delaware derivative
18 case on behalf of the fund. The settlement agreement
19 expressly says that this settlement will apply to the
20 Wisconsin case. It's actually mentioned multiple times
21 in the settlement agreement.
22 THE COURT: Okay.
23 MR. MORRIS: And that's why we're here
24 today, your Honor. It's a nonstarter with respect to
25 the bank. It's a $500 million loss in this case. The
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1 banks is a central character here. I can go as deep as
2 you want me to go on that.
3 THE COURT: Well, I'd like you to explain
4 your position. You can go as deep as you want to go.
5 MR. MORRIS: Okay. Well, the responsibility
6 of the bank here was to ensure that the securities held
7 by the fund were accurately valued and accurately
8 reported to investors. And they also had -- these are
9 contractual duties, your Honor.
10 There's two main contracts between U.S. Bank
11 and the fund. And that's where those duties come from.
12 They were the primary entity responsible for securities
13 valuation and also for reporting the value to
14 investors.
15 And so, if you're looking for a finger to
16 point, that's the first one you could point. And
17 they're not a party here. And they are a party in the
18 first filed case in Wisconsin.
19 THE COURT: Okay.
20 MR. MORRIS: So why, if under those
21 circumstances, rope that party into this settlement for
22 essentially peanuts, $250,000 on a $500 million loss?
23 Why even go down that road, your Honor?
24 THE COURT: Are you dissatisfied with the
25 total amount of the settlement in this case or is it
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1 just the allocation?
2 MR. MORRIS: Well, each defendant had a
3 unique role with respect to this case. They have all
4 negotiated their own amounts. And they're all seven
5 and eight figure amounts. Even though these defendants
6 are not as centrally involved as the bank, they are, at
7 least, defendants in this case and they were --
8 THE COURT: You are upset because the bank
9 made a good deal?
10 MR. MORRIS: They've made a very good deal
11 and Sal Solito (phonetic) is a good lawyer. But your
12 Honor we have a first filed case in Wisconsin that's
13 pursuing only U.S. Bank. It proceeded the -- I have
14 said this a bunch of times. They're not even a party
15 in this case. They preceded the addition of the bank
16 to the federal case.
17 And now, you know, after we've been
18 litigating that case is Wisconsin, the proposal is to
19 settle out those claims for 250,000. We were quite
20 shocked to learn of that development.
21 THE COURT: Okay.
22 MR. MORRIS: Your Honor, if I might very
23 quickly address the indemnification issue. There's,
24 absolutely, no way that the bank is entitled to
25 indemnification under its contract. If I could pass up
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1 what I've got.
2 THE COURT: Sure.
3 MR. MORRIS: I've got copies for everyone.
4 THE COURT: Thank you very much. I
5 appreciate it.
6 MR. MORRIS: Judge, if you look behind tab
7 number one, that's an excerpt of -- oh, you're there.
8 You figured out where I was going.
9 If you look at the second page, that's an
10 indemnity provision in U.S. Bank's contract with the
11 trust. It's got two of them. But I just included the
12 one, because they're materially identical.
13 And, you can see that the indemnity
14 provision, starting at Part A, is limited. There's a
15 carve out for cases in which the bank was negligent.
16 And, the standard is ordinary negligence.
17 And in fact, in a case where the bank was
18 negligent, if you go to the last paragraph, it's,
19 actually, required to indemnify the trust. So, if
20 there's any indemnification here, it's the opposite as
21 what plaintiff say it is. It flows from the bank to
22 the trust.
23 And, surprisingly, if you turn to tab two,
24 the plaintiffs have already alleged that in the federal
25 case. This is an excerpt from their federal complaint.
Senior Court Reporter Cheryl-Lee Lorient Courtminutes@outlook.com
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1 And they say in paragraph 169 "U.S. Bank agreed to be
2 responsible for its own negligence." And now, they're
3 arguing, essentially, the opposite in front of you.
4 And if you were to wonder "Well, is there a
5 negligence claim here, was the conduct at issue here
6 negligent which would meet the carve out to the
7 provision," I just showed you in tab one.
8 Tab three is an excerpt from the Wisconsin
9 case. And I could give you the full version of all of
10 these. I have them with me. I can submit them
11 electronically.
12 This highlighted portion is a high-level
13 summary of the type of conduct at issue in the
14 Wisconsin case. And it's pretty egregious, your Honor.
15 This is the largest misevaluation case. Most
16 of my practice, your Honor, involves a fund related to
17 open end close end private fund related cases. And, as
18 far as I know, this is, by far, the largest
19 misevaluation case ever.
20 And the conduct, in a lot of these
21 allegation, come from the SEC's investigation. The SEC
22 broke this open not the U.S. Bank. U.S. Bank appears
23 to have never done discovery of its own errors until it
24 was brought to their attention by the SEC.
25 You have instances where the bank was
Senior Court Reporter Cheryl-Lee Lorient Courtminutes@outlook.com
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1 reporting to investors, mathematically, impossible
2 evaluations; failure to cross check prices that were
3 publically available and reported by other funds in
4 addition to this fund. It's pretty surprising. The
5 idea that you couldn't show negligence under these
6 facts is pretty unlikely.
7 And that's why we think we have a good case
8 in Wisconsin. We were the first filed case and we've
9 been pursuing it. And now, this settlement would,
10 potentially, undercut that.
11 THE COURT: What is the posture of the
12 Wisconsin case right now?
13 MR. MORRIS: It's being briefed on a motion
14 to dismiss.
15 THE COURT: What's the return date?
16 MR. MORRIS: We should have it briefed by
17 the end of the year.
18 THE COURT: The end of the year? I'm not
19 sure how Wisconsin, the Court, manages its docket. Do
20 you have a date when you'll --
21 MR. MORRIS: We are in a commercial court,
22 your Honor. I'm not sure how quickly we'll get a
23 decision, but we, hopefully, will be ready first or
24 second quarter next year to start taking discovery.
25 We'll take discovery, but the facts as they
Senior Court Reporter Cheryl-Lee Lorient Courtminutes@outlook.com
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1 are right now, we could make a showing of negligence at
2 trial.
3 THE COURT: If you survive the motion to
4 dismiss.
5 MR. MORRIS: Of course.
6 THE COURT: Okay.
7 MR. MORRIS: In short, our position is, "Why
8 are you doing this?" It's essential that the defendant
9 is not even a party to this case. They've come to you
10 to try to get you to approve a full classified release
11 for $250,000. Why are we doing this? There's a whole
12 other case that's pursuing this defendant.
13 If you deny approval to this settlement,
14 you're going to create tens of millions of dollars of
15 value for investors. I guarantee it. We're going to
16 come back to you with a much better deal.
17 Every other defendant in this