Anwar et al v. Fairfield Greenwich Limited et al

Filing 1354

LETTER addressed to Douglas M. Wolfe from Robert C. Finkel dated 8/5/2013 re: Please be advised that following the claims process, co-lead counsel will be submitting to the District Court a proposed plan of distribution for the FS settlement fund; we anticipate that the plan will recommend that the Court reject the proofs of claims submitted by ASM. We will give you notice of that submission and you will have the right to be heard with respect thereto. (lmb) Modified on 2/18/2015 (lmb).

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August 5, 2013

By Electronic Mail

Douglas M. Wolfe, Esq.
General Counsel
ASM Capital
7600 Jericho Turnpike, Suite 302
Woodbury, NY 11797

Re:

Anwar, et al. v. Fairfield Greenwich Limited, et al.
09-CV-00118 CVM) (FM)

Dear Mr. Wolfe:
We are one of the co-lead counsel for plaintiffs in the above matter. Co-lead
counsel are responsible for supervising review by the Claims Administrator (Rust
Consulting) of proofs of claim filed with respect to the Fairfield Greenwich ("FG")
settlement. The FG settlement involves in part the resolution of litigation claims by a
settlement class of investors in Greenwich Sentry, L.P. and Greenwich Sentry Pai1ners,
L.P. (among other funds) in the United States District Court against entities and
individuals affiliated with the Fairfield Greenwich Group. Those claims and the FG
settlement are entirely separate from any bankruptcy claims belonging to Greenwich
Sentry or Greenwich Sentry Partners against any defendants, including the FG defendants
that participated in the District Court FG settlement.
ASM Capital ("ASM") has filed multiple proof of claim forms seeking to
participate in the distribution of proceeds from the District Court FG settlement,
purportedly as assignee of Syd Silverman, Mary Kellogg-Joslyn IRA RO, Milton Fine
Revocable Trust, and Robert Critchell III IRA (the "Assignors"). ASM's claim forms
append Claim Purchase Agreements ("Agreements") between ASM and the Assignors
with respect to the bankruptcy proceedings of Greenwich Sentry L.P. (the "Bankruptcy").
The Assignors, however, also have filed proofs of claim in connection with the FG
settlement that dispute ASM's right to recover on these claims.

WOLF POPPER LLP

Douglas M. Wolfe, Esq.
August 5, 2013
Page 2

We have reviewed the Agreements and have concluded that they assign only
claims with respect to the Bankruptcy proceedings and not the litigation claims involved
in the FG settlement.
Our conclusion is based, among other things, on the first paragraph of the
Agreements, quoted in part as follows:
[Assignor] ... does hereby absolutely and unconditionally sell, convey,
and transfer to ASM Capital, L.P .... all of Seller's right, title, benefit and
interest in and to any and all of Seller's pre-petition claim or claims,
equity interests, or as more specifically set forth as any right to payment
(the "Claim"), against Greenwich Sentry, LP (the "Debtor"), in
bankruptcy proceedings in the United States Bankruptcy Court for the
Southern District of New York (the "Court"), Case No. 10-16220 (the
"Case") .... [Emphasis in original.]
The rights assigned by the Agreements thus expressly cover the "Claim"
against "the Debtor" in bankruptcy "Court." The Agreements do not extend to
proceeds distributed pursuant to the FG settlement because the settled claims
derive from litigation claims and not claims against "the Debtor" (i.e., Greenwich
Sentry, L.P.) in bankrtupcy "Court." See, e.g., Sec. Investor Prof. Corp. v.
Bernard L. Madoff Inv. Secs. LLC, 490 B.R. 59, _ (S.D.N.Y. Banl<r. 2013)
(Marrero, J.) (claims involved in the FG settlement, i.e., the Anwar litigation
claims, "are direct and independent claims against non-debtor parties and thus not
claims against a debtor").
At your request, we have reviewed US. v. Okun, No. 3:08cr132, 2009 WL
2762620 (E.D. Va. Aug. 27, 2009). There, the court found that the purchase of a
bankruptcy claim extended to the proceeds of a restitution award. In Okun, the
restitution action against Mr. Okun (who was the sole and controlling shareholder of the
bankrupt entity) was directly related to the bankruptcy proceeding. The Okun court
explicitly found that "the restitution claim and the bankruptcy claim are, in essence, the
same claim." That is wholly different from Anwar, where the litigation claims are, as
Judge Marrero held, unrelated to the bankruptcy because they arise from fraudulent
inducement and breaches of duties owed directly by the FG defendants to investors in the
Greenwich Sentry fund.
Although the Agreements are unambiguous, it also is significant that the
Agreements were drafted by ASM, so that if ASM intended to obtain assignments of

177341-1

WOLF POPPER LLP

Douglas M. Wolfe, Esq.
August 5, 2013

Page 3

litigation claims, it easily could have drafted the Agreements so that they clearly effected
such an assignment. See, e.g., Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S.
52, 62 (1995) (relying upon "the common-law rule of contract interpretation that a court
should construe ambiguous language against the interest of the party that drafted it").
Please be advised that following the claims process, co-lead counsel will be
submitting to the District Court a proposed plan of distribution for the FS settlement
fund; we anticipate that the plan will recommend that the Court reject the proofs of
claims submitted by ASM. We will give rou notice of that submission and you will have
the right to be heard with respect thereto.

RCF:rd
cc: David A. Barrett, Esq.
Mr. Daniel J. Polizzi

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The ASM claim forms are further defective because they do not identify the dates, number of
interests, and prices of limited partnership interests acquired or redeemed by the Assignors, as
required by the Proof of Claim form, nor were the required supporting documents provided with
the claim forms submitted by ASM.

177341-1

Robert C. Finkel
From:
Sent:
To:

Cc:
Subject:
Attachments:

Robert C. Finkel
Monday, January 12, 2015 7:07 PM
'Doug Wolfe'
Natalie M. Mackie!
FG Distribution Letters and Signed Order
FG Settlement Distribution Letter Endorsed by Judge Marrero (No motion p.... pdf;
Anwar - Dec. 17, 2014 Letter to Judge Marrero.pdf; FG - Signed Settlement Distribution
Order.pdf

From: Natalie M. Mackiel
Sent: Monday, January 12, 2015 12:37 PM
To: Robert C. Finkel
Subject: FG Distribution Letters and Signed Order
Attached are the 1) letter submitted to Judge Marrero requesting permission to file the settlement distribution order,
which he endorsed with an instruction not to file a motion; 2) the letter submitted to Judge Marrero in conjunction with
the distribution filing; and 3) the signed distribution order. The phone number for Judge Marrero's chambers is (212)
805-6374. The clerk assigned to our case facilitated the discussions with Judge Marrero regarding the procedure for
filing the distribution papers and is familiar with Judge Marrero's distribution order.
Natalie M. Mackie!
Wolf Popper LLP
845 Third Avenue, 12th Floor
New York, NY 10022
212.451.9667
n [e-mail]

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