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; and xii.

For the reasons set forth herein, GT respectfully requests that the Court grant the Motion and dismiss all claims in the Plan Agent’s Amended Complaint. Alternatively, and solely in the event that the Court does not dismiss all claims in the Amended Complaint, GT 9 Although some courts have permitted attorneys’ fees for claims under section 544, they have done so without analysis and ignored the distinction between avoidance under section 544 and the incorporated applicable state law, on the one hand, and the separate and independent inquiry of remedy under section 550, which does not incorporate any state law fraudulent transfer provisions, on the other hand. Case 4:16-cv-00536 Document 23 Filed in TXSD on 05/13/16

Case 1:12-mc-00115-JSR Document 501 Filed 11/12/13 Page 13 of 29 -9- Products, Inc.), 22 F.3d 37 (2d Cir. 1994); AEM v. United States (In re Mirabilis Ventures, Inc.), 2012 WL 1038773, at *8-11 (Bankr. M.D. Fla. Mar. 21, 2012); In re AVI, Inc., 389 B.R. at 734; Reiser v. Moorman (In re Equity Land Title Agency, Inc.), 370 B.R. 154, 160-61 (S.D. Ohio 2007); Morris v. Emprise Bank (In re Jones Storage & Moving, Inc.), 2005 WL 2590385, at *5-7 (Bankr. D. Kan. April 14, 2005); Covey v. Stahl Lumber Co. (In re Weishaar), 1998 WL 34065284 (Bankr. C.D. Ill. Oct. 26, 1998). There is substantial ground for difference of opinion concerning whether this result is consistent with the plain language of 11 U.S.C. § 550(a). That provision authorizes a trustee to recover transferred property “to the extent that a transfer is avoided.”

33 The Second Circuit precedent is, in fact, well founded in the law. As the CBNA Lenders discussed at length in their moving papers, the fact that the recovery provision of the Bankruptcy Code (Section 550) uses the words “for the benefit of the estate,” while the avoidance provisions (Sections 544 and 548) do not, does not mean that Congress intended to allow a debtor a do-over (at the expense of parties with whom it did business) when that do- over would do nothing to benefit an injured creditor. CCH Mot. at 39.

That issue of federal law, however, is not before this Court. The liability that Heller contends givesrise to the Law Firm Respondents’ obligation to account for the unfinished businessprofits stems here from its contention that the law firms are liable as subsequent transferees under 11 U.S.C. section 550(a)(2) or as the entity “for whose benefit the transfer was made” pursuant to 11 U.S.C. section 550(a)(1). In this respect, Heller’s claim against the law firms — as opposedto the Heller partners — turns 37 on questions of federal law.

14 Section 550(a)(1) contemplates there being only one such entity ("the entity") whereas§ 546(g) is broader, and contemplates multiple beneficiaries ("for the benefit of ... a"). 15 Section 550 establishes a hierarchy of protections for the following parties: (i) "mere conduits" for the initial transferee, from whom the trustee may not recover because they never have control of the transferred assets, see Bonded, 838 F.2d at 893; (ii) subsequent transferees, from whom the trustee may recover only if they did not take for "value" and in "good faith," see 11 U.S.C. § 550(b ); (iii) initial transferees, from whom the trustee may 8 Case 1:12-mc-00115-JSR Document 316 Filed 08/28/12 Page 12 of 15 courts interpret § 550( a)( I) to exclude, and thus to protect, subsequent transferees. Otherwise, trustees could deprive them of the "good faith" defense to which they are entitled under § 550(b) by calling them "entit[ ies] for whose benefit" the transfer was made.

INTRODUCTION Two groups of subsequent transferee defendants previously moved to dismiss the Trustee’s recovery proceedings against them pursuant to Section 550(a) of the Bankruptcy Code. Thereafter, this Court ordered common briefing with respect to the following issues:1 (1) whether, as a precondition for pursuing a recovery action against a subsequent transferee under 11 U.S.C. § 550(a), the Trustee must first obtain a fully-litigated, final judgment of avoidance against the relevant initial transferee under 11 U.S.C. §§ 544, 547 or 548 (“Issue 1”), or (2) whether the Trustee’s recovery action against a subsequent transferee under 11 U.S.C. § 550(a) must be dismissed unless the Trustee has obtained a judgment against the relevant subsequent transferee avoiding the initial transfer or he asserts a claim against the subsequent transferee to avoid the initial transfer within the period prescribed by 11 U.S.C. § 546(a) (“Issue 2”). By Opinion and Order filed October 29, 2013 (the “Order”), this Court properly denied the motions to dismiss with respect to both Issue 1 and Issue 2.

101 See, e.g., Dobin v. Pres. Fin. Corp. of Del. Valley (In re Cybridge Corp.), 312 B.R. 262, 268- 71 (D.N.J. 2004); Bakst v. Sawran (In re Sawran), 359 B.R. 348, 352-53 (Bankr. S.D. Fla. 2007); Bakst v. Wetzel (In re Kingsley), No. 06-2109-BKC-PGH-A, 2007 WL 1491188, at *3-6 (Bankr. S.D. Fla. May 17, 2007); Dahar v. Jackson (In re Jackson), 318 B.R. 5 (Bankr. D.N.H. 2004). 102 11 U.S.C. § 550(d). Additionally, section 550(d) of the Bankruptcy Code concerns recovery of avoided transfers from initial and subsequent transferees.

In fact, the docket just as readily supports the opposite conclusion -- that the Bankruptcy Court detex-rnined correctly that there was no firlality when it received the Case 1:07-cv-06597-AKH Document 6 Filed 08/01/2007 Page 10 of 22 Decl., Ex. 141, the Bankmptcy Court granted the Appellees' motions to dismiss. In the 550 Opinion, Judge Gonzalez reasoned that section 550(a) of the Bankruptcy Code required that Enron first establish the initial transfers as improper and avoided (which Enron failed to do) before it could recover such transfers from the Appellees. (550 Op. p. 84.)

It is not yet known, however, whether the Sixth Circuit will accept the appeal. the Bankruptcy Court’s denial of Hyundai’s motion for derivative standing, sets out substantial evidentiary support for claims by the estate against the JT&T Parties based contract law and bankruptcy law (viz, 11 U.S.C. §§ 544(b), 548 and 550).