Anwar et al v. Fairfield Greenwich Limited et al

Filing 1411

ENDORSED LETTER addressed to Judge Victor Marrero from David A. Barret dated 9/03/2015 re: Anwar Plaintiffs responds to the August 21, 2015 Letter. ENDORSEMENT: The Clerk of Court is directed to enter into the public record of this action the letter above submitted to the Court by Anwar Plaintiff. SO ORDERED. (Signed by Judge Victor Marrero on 9/08/2015) (ama)

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FLOOR• NEW YORK

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September 3. 201i5

BY FAX
The Honorable Victor Marrero
United States District Court
Southern District of New York
500 Pearl Street
New York, New York 10007
'

Re:

Anwar, et al. v. Fairfield 1ree11wich limited, et al
Master File No. 09-CV-00118 (VM) (FM)

Dear Judge Marrero:
We wTite on behalf of the Anwar Plaintiffs to resJ,nd to the August 21. 2015 letter
("Letter") from Robert A. Wallner, counsel for the Succefsor Trustee ("Trustee'') of the
Greenwich Sentry and Greenwich Sentry Partners Litigat~on Trusts. The Letter requests a premotion conference regarding the Trustee's proposed molt'n to intervene for the limited purpose
of objecting to Plaintiffs· settlement with the Citco Defe ants. See Dkt. No. 1398. Plaintiffs
respectfully submit that the Trustee's objections are unfo · nded; and that he lacks standing to
object to the settlement and cannot meet Rule 24's requir4ments for intervention.
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The Trustee's litigation in New York state court atainst Citco was dismissed two years
ago in a comprehensive decision. See Walker, Truesdell, ~orh & Associates, Inc. v. Gloheop
Fin. Servs. LLC, 993 N.Y.S.2d 647 (N.Y. Sup. Ct. 2011). i Although the Trustee filed a notice of
appeal on .lune 27, 2014. he did not perfect the appeal unttI over a year later, on August 10, 2015,
and most recently agreed to adjourn the appeal until Deceµiber 2015. See Exhibits A and B.
'

The Trustee's intervention request and his substan~·ve objections must be addressed in
light of these facts. The Trustee is seeking to inject hims lf into the Citco settlement even
though the only way in which the settlement could even h pathetically affect his claims is in the
event that he prevails on appeal and then takes the case to trial at which he wins damages. Such
wholly conjectural circumstances provide no basis to inte~fere with a $125 mi Ilion settlement.
I

The Trustee's Objections Are Meritless.

Recog~' izing the existence of the Trustee's

claims, the settlement agreement expressly states that it d es not operate to release "any claims
asserted or which may be asserted by the Funds, or the pe ding (though dismissed) derivative
litigation hrought in connection with the Funds." Dkt. No 1 1398 ~ 16. The relevant sentence
provides:
!

This releac.;e does not include any claims asserted dr which may be asserted by the
Funds, or the pending (though dismissed) derivali~e litigation brought in
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The Honorable Victor Marrero
September 3. 20 I 5

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connection with the Funds~ provided, however, ti 'at to the extent that any such
claims have been or may be asserted, nothing in is paragraph or any provision
herein shall prevent the Released Parties from as erting any defenses or raising
any argument as to liability or damages with resp ct to such claims or, with the
exception of the provisions of paragraph 4, prcvc t the Rckasccl Partic.s; from
asserting any rights, remedies or clai~ against e Funds or in the pending
(though dismissed) derivative litigation. Id
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1
The Trustee ignores this Language. which is repea ed i.n if 16 of the proposed Final
Judgment (Dkt. No. 1398-5). Instead, the Trustee claims that one sentence in~ 19 of the
proposed Final Judgement, which contains standard lang age for a bar order. "may imply that
this Court has determined that Citco ha.~ colorable right<: 0 offc;et the Trustee's claims." Letter at
1-2. The sentence reads: "Nothing in this paragraph pre ludcs the Citco Defendants from
arguing that the settlement proceeds in this case are an o set against claims that may be made
against them in other proceedings.'' Dkt. No. 1398-5 ~ l ,. This sentence preserves Citco 's
ability to argue for an offset in other proceedings, but it i~ no way indicates that this Court has
made any determination as to the merits of any offset. O~ the contrary, the merits of any such
argument~ (including how an offset might be calculated) ~ill be ruled upon, if necessary, by rhe
courts in whatever proceedings may occur. Plaintiffs' co\insel has conveyed to the Trustee that
they will make this representation on the record at the fin~I fairness hearing. This will address
1
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any conceivable issue.

Lack of Standing. As this Court found in denyin~· a motion to intervene brought by rhe
BLMIS trustee, who sought to object to the settlement wi h the Fairfield Greenwich defendantS.
"nonparties, such ai; the Trustee, generally do not have st ding to object to a class action
settlement." Okt. No. 1071, aff'd, No. 13-1392 (2d Cir. ~ept. 3, 2014); see Cent. States Health
1

Because the Trustee's objections are groundless and ant offset issues are purely hypothetical,
there is no reason for the class notice to discuss the legal ~asis or computation of an offset, as the
Trustee asserts. See Letter at 2.
The Trustee also points to Citco's argument that the in • stors were injured "(if at all) only
derivatively" in opposing class certification. Letter at 2. owever, Citco 's c:irgument related
only to Plaintiffs' holder claims. See, e.g. Citco Defend ts' Memorandum of Law In
Opposition to Plaintiffs' Motion for Class Certification (S ptember 15, 2014) at 18 ("Here,
plaintiffs' common-law holder claims are derivative in na e."). Moreover. the Court granted
t Plaintiffs have standing to assert
class certification over Citco 's objections and has ruled
direct claims. See Anwar v. Fairfield Greenwich Ltd, 72 F. Supp. 2d 372, 401 (S.D.N.Y. 2010)
("[T]o the extent that Plaintiffs properly allege duties ow by each defendant directly to I.hem ..
. , they have standing to pursue such claims."); Anwar r. airfield Greenwich Ltd, 884 F. Supp.
2d 92, 98 (S.D.N.Y. 2012) (rejecting defendants' argume ,ts that plaintiffs lacked standing to
hring holder claims).
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The I Ionorable Victor Marrero
Seplemher l 20 I5
Page: 3
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& We(fare Fund v Merck-Medco Alanaged Care. 504 FJd 229, 244 (2d Cir. 2007) (Rule
23(e)(5) provides that "any class member may object tot e propos[ed]" settlement. but
"lnJonpartics ... generally do not have standing to object to a settlement of a class action.'').
Among other reasons. because Lhe only issue before the
urt is whether the proposed settlement
is "fair. reasonable. and adequate,'' Rule 23( e )(2), courts ' usually reject ... outc:iders' attempts to
enter the litigation during the settlement phase.'' (Jould v. Alleco, inc:., 883 F.2cl 281, 284 (4th
Cir. 1989). Because the Trustee is not a class member an cannot show'" formal' legal
prejudice." he lacks standing to object to the Citco settle ent. See Bha1;a v. Piedrahira, 756
F.3d 211, 219 (2d Cir. 2014) (Citco and PwC lack standin to object to settlement with Fairfield
Defendants in this ca.c;e); In re American Tnternatirmal Gr up, Tnc. Securities T.itigation, 2013
WL 68928 at *3 (S.D.N.Y. Jan. 7, 2013) (New York Atto.ney General lacks standing to object to
proposed class settlement).
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The Trustee Cannot Meet Ruic 24"s Requiremehtll for Intervention. Intervention
under Ruic 24(a) is allowed only where:
1

(1) the motion is timely; (2) the applicant asserts
interest relating to the
property or transaction that is the ~ubject of the ac ·on; (3) the applicant is so
situated that without intervention, disposition of th· action may, as a practical
matter, impair or impede the applicant's ability to rotect its interest; and (4) the
applicant's interest is not adequately represented b,, the other parties.

MasterCard lnt'l Jnc. v. Visa Int'/ Serv. Ass 'n, inc .. 471 ff'3d 3 77, 389 (2d Cir.2006). "failure to
satisfy any one of these requirements is a sufficient groun to deny the application." Farmland

Dairies v. Comm 'r ofN. Y State Dep 't ofAgric. & Mkts., 47 F.2d 1038 (2d Cir. 1998 (emphasis
in original). Here, the Trustee cannot demonstrate that he as ·'an interest" in this action or that
"without intervention" the TrU51ee 's "ability Lo protect its nteresL" will be impaired or impeded.
As discussed, the Citco settlement and the proposed final udgment do not address the viability
of an offset either way and the Trustee will be able to opp se any such offset when and if the
issue is actually raised by Citco in another proceeding. F her, permissive intervention under
Rule 24(b) is permitted only if the application would not,. duly delay or prejudice the
adjudication of the rights' of the existing parties." Fed. R. Civ. P. 24(b)(3); In re Holocaust
Viccim Assets Litig., 225 F.Jd 191. 201 (2d Cir. 2000). As de from the Tru.~tee's lack ofa legally
cogni:wble interest, his intervention would delay final app~oval and prejudice class members by
needlessly posrponing settlement distribution.!:i.
'
For the reasons set forth above, the Trustee's requejst to file a motion to intervene should
be denied.
:

~~~
Dav1d! A. Barren

cc:

Robert A. Wallner (via email)

004/r) 1:3

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BOIES.

BOIES 2CHILLSR

SCHILLER

The Honorable Victor Marrero
September 3, 2015

Page4
Sarah L. Cave (via email)
Timothy A. Duffy (via email)
Andrew Gordon (via email)

SO ORDERED.

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Exhibit A

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(FILED: NEW YORK COUNTY CLERK 06/27/20141
NYSCEF toe. NO. 262

INDEX NO. 600469/2009

RECEIVED NYSCEF: 06/27/2014

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
WALKER, TRUESDELL, ROTH & ASSOCIATES,
INC., Trustee of Greenwich Sentry, L.P. Litigation

New York County
Index No. 600469/2009

Trust,

Plaintin:

NOTICE OP APPEAL

vs,
GLOBEOP FINANCIAL SERVICES LLC, CITCO
FUND SERVICES (EUROPE) BV, CITCO
(CANADA) fNC., PRICEWATERHOUSECOOPERS
LLP, and PRICEWATERHOUSECOOPERS
ACCOUNTANTS N.V.,
Defendants.
PLEASE TAKE NOTICE that Plaintiff hereby

~ppeals

to the Appellate Division, First

i

Judicial Department, from each and every part of the Decision and Order of the Honorable
Marcy S. Friedman, J.S.C., dated and entered in the Cletk's Office of the Supreme Court of the
State of New York, County of New York, on May 27, 2Ql4, which granted Defendants' motions
'

to dismiss Plaintiffs complaint.
Dated: New York, New York
June 27, 2014

Rob~rt A. Wallner
Jennifer L. oung
Kristi Stalmr,e McGregor
Charles Slid ers

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One Pennsy vania Plaza

New York, lf-Ty 10119
Tel: [phone]

rwallner@ ilberg.com

jyoung@mi berg.com
kmcgregor milberg.com
cslidders@ ilberg.com
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BOIE£ :::CHILLER

SEEGER tEISS LLP
Stephen A. Weiss
Parvin Ami~olroaya
77 Water St eet
New York, Y 10005
Tel: [phone]

swciss@scc erweiss.com
paminolroa a@seegt."rweiss.com
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Attorneysfil Plaintiff Walker, Truesdell, Roth &
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Associates, nc., Trustee of Greenwich Sentry, L.P.

Litigation

ust
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SUPREME COURT OF THE STATE OF NEW YORK

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APPELLATE l)JVISION----FIRST DEPARTMENT

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NEW GREENWICH LITIGATION

TRUSTeE, LLC. a5 SucCCS!;Or Trustee of
Greenwich Sentry, L.P. Li1igation Trust.
Plaimfjf-Appeilan1,
-v-

CITCO FUND SER VICES (EUROPE) B.V.,
CITCO (CANADA) INC ..

PRICEWATERl-IOUSF..COOPERS LLP 11nd
l'RlCE WA TERHOlJSECOOPERS
ACCOUNT ANTS, NV.,

Dcfendant.1·-Rcsp<JndentS.

and
GLOBEOP FlNANCIAL SERVICES LLC,

Defendant.
NcW GRE.F.NWlCH Ll1'1GATION
TRUST.EE, LLC, :is Successor Trus~e 1)f
Greenwich Soncry Partners, L.P. Litigation
Trusr,
Nainl!f!-Appr:llont,
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CITCO FUND SERVICES (EUROPE) B.V.,
CITCO (CANADA) INC.,
PRICEWATERHOUSECOOPERS LLP,
Defe11danrs-&sponde11J.f,

o.nd
GLOB~OP

FlNANCil\L SERVICES LLC,
Defendcml.

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New lvork Counry Clerk's lncfox
Nos. '600469/09 and 600498/09

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WHEREAS, Plainlitl·Appcllant New Greenwich i.icigntion Trustee, LLC. has
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takc:n two re(<1led appeals in the above

r~forenced

mnrters:
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WHEREAS, Plaintiff-Appellant NeW Gl'\?e.nwich l..irigation Trustee, LLC filed a
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Note of Issue und a Notice of Time Requested for Argumlent or Intention to Submit on

10 IS Term nnd requesting
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August 10, 201 S, noticing these appeals for the Ocrober

argumenl;
WHEREAS, the parties have ~greed to adjourn th~ appeals to the December 2015
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Term;

NOW. THERHORE, lT 15 HEREBY STTPULAfED AND AGREED by and
between the parties, through their undersigned counsel, tijot, pursuant to 22 NYCRR
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§ 600.11 (g), the appeals are hereby adjl)urned to the Occ~mber 2015 Term; the deadline
for filing l)efendants-Responctents' answering briefs is qttober 7, 2015; and the deadline
fur llling Plaintiff-Appellant's reply briefs is Novemhi=r li3, 2015.

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