Case 1:12-mc-00115-JSR Document 491 Filed 10/29/13 Page 16 of 20 16 As with other consolidated issues of significant impact in this case, interlocutory appeal of these issues is appropriate.6 V. CONCLUSION For the foregoing reasons, Customers request that the Court amend the Order to provide the requisite certification required by Section 1292(b) to permit the Customers to seek immediate interlocutory review by the Court of Appeals of the issues relating to the value defense under Section 548(c) of the Bankruptcy Code in these SIPA Avoidance Actions. Dated: New York, New York October 29, 2013 Respectfully submitted, K&L GATES LLP By: /s/ Richard A. Kirby Richard A. Kirby Laura L. Clinton Martha Rodriguez-Lopez 1601 K Street NW Washington, DC 20006-1600 6 Three overarching legal issues materially affect the avoidance actions against good-faith defendants, such as the Customers.

On the Sixth Claim for Relief, pursuant to DCL sections 275, 278 and/or 279, sections 544(b), 550(a) and 551 of the Bankruptcy Code, and section 78fff-2(c)(3) of SIPA: (a) avoiding and preserving the Six Year Transfers, (b) directing that the Six Year Transfers be set aside, and (c) recovering the Six Year Transfers, or the value thereof, from Defendant NTC and/or FBO Defendant for the benefit of the estate of BLMIS; Case 1:11-cv-08574-JSR Document 1 Filed 11/28/11 Page 24 of 28 22 vii. On the Seventh Claim for Relief as a result of the avoidance of the within Transfers, pursuant to DCL section 278 and/or 279, sections 544(b), 548, 550(a) and 551 of the Bankruptcy Code, and section 78fff-2(c)(3) of SIPA: (a) avoiding and preserving the Subsequent Transfers, (b) directing that the Subsequent Transfers be set aside; and (c) recovering the Subsequent Transfers, or the value thereof, from FBO Defendant for the benefit of the estate of BLMIS; viii. On all Claims for Relief, pursuant to federal common law and N.Y. CPLR 5001 and 5004 awarding the Trustee prejudgment interest from the date on which the Transfers were received; ix. On all Claims for Relief, establishment of a constructive trust over the proceeds of the Transfers in favor of the Trustee for the benefit of BLMIS’ estate; x. On all Claims for Relief, assignment of income tax refunds of Defendant NTC and/or FBO Defendant from the United States, state and local governments paid on fictitious profits during the course of the scheme; xi. On all Claims for Relief, awarding the Trustee all applicable interest, costs, and disbursements of this action; a

The motion Case 1:11-cv-06586-JPO Document 2 Filed 09/21/11 Page 25 of 27 -21- to dismiss also raises issues regarding the legal sufficiency of the four common-law claims; these are issues that have nothing to do with the Code. And, two of the remaining three claims—the actual fraud claim under 11 U.S.C. § 548(a)(1)(A) and the constructive fraud claim under 11 U.S.C. § 548(a)(1)(B)—are, as discussed above, “quintessentially suits at common law” on which the Bankruptcy Court cannot enter final judgment. Stern, 131 S. Ct. at 2614 (quoting Granfinanciera, 492 U.S. at 56).

Courts have universally held that where a Ponzi scheme exists, transfers made by a Ponzi entity are presumed to have been made by the debtor with the “actual intent to hinder, delay, or defraud.”74 Thus, where it is established that an entity functioned as a Ponzi scheme, it is likewise established, as a matter of law, that transfers from the entity were made with the requisite fraudulent intent.75 Regardless of how transferees are labeled— as creditors or equity 74 11 U.S.C. § 548(a)(1)(A); see also Bear, Stearns Sec. Corp. v. Gredd (In re Manhattan Inv.

The Bankruptcy Code defines “value” to include not only “property,” but also “satisfaction or securing of a present or antecedent debt of the debtor.” 11 U.S.C. § 548(d)(2)(A). “Debt” is defined as “liability on a claim.”

If Heller has no such property interest then Heller cannot claim thatthe dissolution agreement constituted a transfer of the property interest. If Heller did have a property interest in its unfinished hourly fee matters, then we will remand to the district court to determine the remaining issues, namely whether the transfer met the criteria in § 548(a)(1) to constitute a fraudulenttransfer that is avoidable by the plan administrator. , es th y ao d 20 IN THE MATTER OF HELLER EHRMAN LLP This issue is significant for California lawyers and law firms, as well as for their clients.

Unless some federal interest requires a different result, there is no reason why such interests should be analyzed differently simply because an interested party is involved in a bankruptcy proceeding.”); BFP v. Resolution Trust Corp., 511 U.S. 531, 544-45 (1994) (rejecting avoidance of state foreclosure sale as fraudulent under 11 U.S.C. § 548 because state law precluded trustee’s avoidance claim; “the Bankruptcy Code will be construed to adopt, rather than to displace, pre-existing state law” unless Congress’s intent to the contrary is “‘clear and manifest’” (quoting English v. Gen. Elec. Co., 496 U.S. 72, 79 (1990))); 1 The cases offered by SIPC do not generally arise in the broker/customer context, and are in any event inapposite. See, e.g., In re Hedged-Investments Assocs., Inc., 84 F.3d 1286, 1290 (10th Cir. 1996) (equity investor identified no pre-existing legal right to payments in excess of principal); In re Bayou Group, LLC, 439 B.R. 284, 337 (S.D.N.Y. 2010) (recognizing, in the context of avoidance claims against equity investors, that if party had contracted for payment in excess of principal, payment consistent with contract would be for reasonably equivalent value).

the Plan Agent relies upon for standing such that state law affirmative defenses like ratification, estoppel, waiver, in pari delicto, and others that would bar the creditor’s claim will also bar the Plan Agent’s claim. Id.; Crescent Resources Litigation Trust v. Duke Energy Corp., 500 B.R. 464 (W.D. Tex. 2013) (dismissing fraudulent transfer claims in part because the creditors who stood to benefit from the claims would be barred from brining the claims under state law defenses of consent, ratification, or estoppel). Accordingly, GT must know the identify of the creditor or creditors upon whom the Plan Agent relies for standing to evaluate the Plan Agent’s standing to assert the claims at issue and all applicable defenses. 8 Section 550(a) provides: “to the extent that a transfer is avoided under section 544, 545, 547, 548, 549, 553(b), or 724(a) of this title, the trustee may recover, for the benefit of the estate, the property transferred, or, if the court so orders, the value of such property.” 11 U.S.C. § 550(a). Case 4:16-cv-00536 Document 23 Filed in TXSD on 05/13/16 Page 11 of 14 36199122.3 Page 12 value”); In re Brentwood Lexford Partners, LLC, 292 B.R. 255 (Bankr. N.D. Tex. 2003) (“the court cannot invoke state law remedies to circumvent or undermine the specific remedy legislated by Congress for the avoidance of a fraudulent transfer”).9 31.

, the Complaint is insufficient to support the Plan Agent’s constructive (or actual) fraudulent transfer allegations, and Counts 1 and 2 must be dismissed.6 5 See 11 U.S.C. § 548(a)(1) (authorizing the avoidance of certain transfers made by “the debtor”); In re GWI PCS I Inc., 230 F.3d 788, 805 (5th Cir. 2000) (necessary element of a constructive fraudulent transfer claim under section 548 includes an allegation that “the debtor transferred an interest in property”); In re Greenhaw Energy, Inc., 359 B.R. 636, 648 (Bankr. S.D. Tex. 2007) (Trustee failed to adequately plead fraudulent transfer claim because there were no plausible allegations that the debtor was “the party to make the transfer”). 6 GT also notes that in paragraphs 34 and 35 of the Complaint, the Plan Agent summarily alleges and concludes

Consequently, the Trustee’s 11 U.S.C. § 510(c) claims should be dismissed. CONCLUSION Movants respectfully request that this Court enter an order: (i) dismissing the Trustee’s actual fraud claims brought under 11 U.S.C. § 548(a)(1)(A), (ii) dismissing the Trustee’s equitable subordination claims brought under 11 U.S.C. § 510(c), and (iii) granting any other and further relief as this Court deems just and proper. Case 1:12-mc-00115-JSR Document 295 Filed 08/13/12 Page 12 of 13 9 nydocs1-993133.4 Dated: August 10, 2012 New York, New York ANDERSON KILL & OLICK, P.C. By: __/s/ Todd E. Duffy Todd E. Duffy Dennis J. Nolan Beth D. Simon 1251 Avenue of the Americas New York, New York 10020 Tel: (212) 278-1000 Attorneys for Alpha Prime Fund Ltd. and Senator Fund S.p.A. KIRKLAND & ELLIS LLP By: __/s/ Joseph Serino, Jr.