Irving H. Picard v. Saul B. Katz et al

Filing 177

ORDER: At the in-court conference on March 9, 2012, the parties raised the question of whether, on the facts of this case, this issue should be viewed as an issue under 11 U.S.C. § 548(a)(1)(A), in which case the burden of proving willful blindness would be on the plaintiff, or as an issue under 11 U.S.C. § 548(c), in which case the burden of proving the absence of willful blindness would be on the defendants. Having considered the parties' submissions, the Court adheres to its prior determination that this is an issue under § 548(c), and that therefore the burden of proving, by a preponderance of the evidence, that the defendants received the aforementioned transfers in good faith rests on the defendants. The Court will include a discussion of the reasons for this determination in its forthcoming opinion explaining the reasons for its recent rulings on the parties' summary judgment motions. (Signed by Judge Jed S. Rakoff on 3/13/2012) (jfe)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--- --- x

IRVING H. PICARD,
Plaintiff,
11 civ. 3605 (JSR)

-v-

SAUL B. KATZ et al.,

ORDER

Defendants.

- ------ x

JED S. RAKOFF, U.S.D.J.

A central issue in the forthcoming trial is whether the
transfers that Madoff Securities made to the defendants during the two
years preceding Madoff Securities' filing for bankruptcy -- up to an
amount equal to their investment with Madoff Securities during the
same period -

were received by the defendants in good faith,

i.e.,

without their having willfully blinded themselves to Madoff's scheme.
At the in-court conference on March 9, 2012, the parties raised the
question of whether, on the facts of this case, this issue should be
viewed as an issue under 11 U.S.C.

§

548(a) (1) (A), in which case the

burden of proving willful blindness would be on the plaintiff, or as
an issue under 11 U.S.C.

§

548(c), in which case the burden of proving

the absence of willful blindness would be on the defendants. Having
considered the parties' submissions, the Court adheres to its prior
determination that this is an issue under

§

548(c), and that therefore

the burden of proving, by a preponderance of the evidence, that the
defendants received the aforementioned transfers in good faith

(~,

in the absence of willful blindness} rests on the defendants. The
Court will include a discussion of the reasons for this determination
in its forthcoming opinion explaining the reasons for its recent
rulings on the parties' summary judgment motions.

JE~~~S'D'J'

SO ORDERED.

Dated: New York, New York
March 13, 2012

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