IN RE TREMONT SECURITIES LAW, STATE LAW, AND INSURANCE LITIGATION

Nos. 08 Civ. 11117, 11 Civ. 1687

IN RE TREMONT SECURITIES LAW, STATE LAW, AND I NSURANCE LITIGATION. CAYMAN NATIONAL TRUST COMPANY, LTD., as trustee of THE INTERNATIONAL DAD TRUST, Plaintiff, v. TREMONT OPPORTUNITY FUND III, L.P., et al., Defendants.

United States District Court, S.D. New York.

November 14, 2014.


Attorney(s) appearing for the Case

Arthur M. Brainson, Lead Plaintiff, represented by Uri Seth Ottensoser, Bernstein Liebhard, LLP, Jeffrey Michael Haber, Bernstein Liebhard, LLP, Jeffrey D. Lerner, Bernstein Liebhard, LLP, Joseph R. Seidman, Bernstein Liebhard, LLP & Sandy A Liebhard, Bernstein Liebhard, LLP.

Yvette Finkelstein, Lead Plaintiff, represented by Daniel W. Krasner, Wolf Haldenstein Adler Freeman & Herz LLP, Demet Basar, Wolf Haldenstein Adler Freeman & Herz, Jeffrey Michael Haber, Bernstein Liebhard, LLP, Jeffrey D. Lerner, Bernstein Liebhard, LLP, Joseph R. Seidman, Bernstein Liebhard, LLP, Sandy A Liebhard, Bernstein Liebhard, LLP & Stacey Theresa Kelly, Wolf Haldenstein Adler Freeman & Herz.

Group Defined Pension Plan & Trust, Lead Plaintiff, represented by Jeffrey Michael Haber, Bernstein Liebhard, LLP, Jeffrey L. Koenig, Hecht, Kleeger, Pintel, & Damashek, Jeffrey D. Lerner, Bernstein Liebhard, LLP, Joseph R. Seidman, Bernstein Liebhard, LLP & Sandy A Liebhard, Bernstein Liebhard, LLP.

Arthur E. Lange, Plaintiff, represented by Andrew J Entwistle, Entwistle & Cappucci LLP, Robert N Cappucci, Entwistle & Cappucci LLP & Stephen David Oestreich, Entwistle & Cappucci LLP.

Arthur C. Lange, Plaintiff, represented by Andrew J Entwistle, Entwistle & Cappucci LLP.

Arthur C. Lange, Plaintiff, represented by Robert N Cappucci, Entwistle & Cappucci LLP.

Arthur C. Lange, Plaintiff, represented by Stephen David Oestreich, Entwistle & Cappucci LLP.

Arthur C. Lange, Plaintiff, represented by Reed Richard Kathrein, Hagens Berman Sobol Shapiro LLP.

Chateau Fiduciaire S.A., Plaintiff, represented by Paulette Suzanne Fox, Wolf Haldenstein Adler Freeman & Herz, Daniel W. Krasner, Wolf Haldenstein Adler Freeman & Herz LLP, David Avi Rosenfeld, Robbins Geller Rudman & Dowd LLP, Demet Basar, Wolf Haldenstein Adler Freeman & Herz, Gregory Mark Nespole, Wolf Haldenstein Adler Freeman & Herz LLP & Stacey Theresa Kelly, Wolf Haldenstein Adler Freeman & Herz.

The Matthew L. Klein Irrevocable Family Trust, Plaintiff, represented by Paulette Suzanne Fox, Wolf Haldenstein Adler Freeman & Herz, Daniel W. Krasner, Wolf Haldenstein Adler Freeman & Herz LLP, David Avi Rosenfeld, Robbins Geller Rudman & Dowd LLP, Demet Basar, Wolf Haldenstein Adler Freeman & Herz, Gregory Mark Nespole, Wolf Haldenstein Adler Freeman & Herz LLP & Stacey Theresa Kelly, Wolf Haldenstein Adler Freeman & Herz.

The Harriet Rutter Klein Revocable Trust, Plaintiff, represented by Paulette Suzanne Fox, Wolf Haldenstein Adler Freeman & Herz, Daniel W. Krasner, Wolf Haldenstein Adler Freeman & Herz LLP, David Avi Rosenfeld, Robbins Geller Rudman & Dowd LLP, Demet Basar, Wolf Haldenstein Adler Freeman & Herz, Gregory Mark Nespole, Wolf Haldenstein Adler Freeman & Herz LLP & Stacey Theresa Kelly, Wolf Haldenstein Adler Freeman & Herz.

The Geoffrey Rabie Credit Shelter Trust, Plaintiff, represented by Demet Basar, Wolf Haldenstein Adler Freeman & Herz, David Avi Rosenfeld, Robbins Geller Rudman & Dowd LLP & Edward Y. Kroub, Robbins Geller Rudman & Dowd LLP.

The Joanne Brenda Rabie Credit Shelter Trust, Plaintiff, represented by Demet Basar, Wolf Haldenstein Adler Freeman & Herz, David Avi Rosenfeld, Robbins Geller Rudman & Dowd LLP & Edward Y. Kroub, Robbins Geller Rudman & Dowd LLP.

Arthur E. Lange Revocable Trust, Plaintiff, represented by Andrew J Entwistle, Entwistle & Cappucci LLP & Reed Richard Kathrein, Hagens Berman Sobol Shapiro LLP.

NPV Positive Corp., Plaintiff, represented by Andrew J Entwistle, Entwistle & Cappucci LLP, Reed Richard Kathrein, Hagens Berman Sobol Shapiro LLP & Steve W. Berman, Hagens Berman Sobol Shapiro LLP.

Eastham Capital Appreciation Fund LP, Plaintiff, represented by Andrew J Entwistle, Entwistle & Cappucci LLP, Reed Richard Kathrein, Hagens Berman Sobol Shapiro LLP & Steve W. Berman, Hagens Berman Sobol Shapiro LLP.

Laborers Local 17 Pension Plan, Plaintiff, represented by Christopher Lometti, Cohen Milstein Sellers & Toll P.L.L.C., Joel Paul Laitman, Schoengold & Sporn, P.C., Andrew J Entwistle, Entwistle & Cappucci LLP, Kenneth Mark Rehns, Cohen Milstein Sellers & Toll P.L.L.C., Reed Richard Kathrein, Hagens Berman Sobol Shapiro LLP & Steve W. Berman, Hagens Berman Sobol Shapiro LLP.

Daniel Jackson, Plaintiff, represented by Christopher Lometti, Cohen Milstein Sellers & Toll P.L.L.C., Joel Paul Laitman, Schoengold & Sporn, P.C., Andrew J Entwistle, Entwistle & Cappucci LLP, Kenneth Mark Rehns, Cohen Milstein Sellers & Toll P.L.L.C. & Reed Richard Kathrein, Hagens Berman Sobol Shapiro LLP.

Neal J. Polan, Plaintiff, represented by Andrew J Entwistle, Entwistle & Cappucci LLP.

Yale M. Fishman 1998 Insurance Trust, Plaintiff, represented by David Avi Rosenfeld, Robbins Geller Rudman & Dowd LLP.

The Tremont Insurance Plaintiffs' Litigation Trust, Consolidated Plaintiff, represented by Daniel W. Krasner, Wolf Haldenstein Adler Freeman & Herz LLP, Demet Basar, Wolf Haldenstein Adler Freeman & Herz & Kate Marietta McGuire, Wolf Haldenstein Adler Freeman & Herz.

M. Kenneth Witover, Consolidated Plaintiff, represented by Mark Steven Mulholland, Ruskin Moscou Faltischek, P.C. & Thomas Anthoney Telesca, Connell Foley LLP .

Ronald Gallatin, Consolidated Plaintiff, represented by Mark Steven Mulholland, Ruskin Moscou Faltischek, P.C. & Thomas Anthoney Telesca, Connell Foley LLP .

The 2001 Frederick Dematteis Revocable Trust, Consolidated Plaintiff, represented by Mark Steven Mulholland, Ruskin Moscou Faltischek, P.C. & Thomas Anthoney Telesca, Connell Foley LLP .

Dematteis FLP Assets, LLC, Consolidated Plaintiff, represented by Mark Steven Mulholland, Ruskin Moscou Faltischek, P.C. & Thomas Anthoney Telesca, Connell Foley LLP .

John Patience, Consolidated Plaintiff, represented by James L. Kopecky, Kopecky, Schumacher & Bleakley, P.C., Jonathan David Berg, Jaffe & Asher LLP, Jonathan Kord Lagemann, Kevin M. Flynn, Kevin M. Flynn & Associates, James L. Kopecky, Kopecky, Schumacher & Bleakley, P.C., Jonathan David Berg, Jaffe & Asher LLP, Jonathan Kord Lagemann & Kevin M. Flynn, Kevin M. Flynn & Associates.

Cummins Inc., Consolidated Plaintiff, represented by Jonathan David Berg, Jaffe & Asher LLP & Jonathan Kord Lagemann.

Cummins Inc., as the authorized representative of the Cummins, Inc. Grantor Trust dated September 10, 2007, as amended, Consolidated Plaintiff, represented by Kevin M. Flynn, Kevin M. Flynn & Associates.

Cummins Inc., Consolidated Plaintiff, represented by Robert Andrew Chapman, Chapman & Spingola LLP & Sara Lillian Siegall, Chapman Spingola, LLP.

Lakeview Investments, LP, Consolidated Plaintiff, represented by Kevin M. Harr.

The International Dad Trust, Consolidated Plaintiff, represented by Ralph C Perry-Miller, Looper Reed & McGraw PC.

F. Daniel Prickett, Movant, represented by William H. Narwold, Motley Rice LLC, William Stephen Norton, Motley Rice LLC, James M. Hughes, Motley Rice LLC & John C. Duane, Motley Rice LLC.

Harry Hodges, Defendant, represented by Seth M Schwartz, Skadden, Arps, Slate, Meagher & Flom LLP.

RYE Select Broad Market Prime Fund, L.P, Defendant, represented by David Jeffrey Kanfer, Tannenbaum Helpern Syracuse & Hirschtritt LLP, George Foulke du Pont, Tannenbaum Helpern Syracuse & Hirschtritt LLP & Jamie Benjamin Walton Stecher, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

RYE Select Broad Market Fund, L.P, Defendant, represented by David Jeffrey Kanfer, Tannenbaum Helpern Syracuse & Hirschtritt LLP, George Foulke du Pont, Tannenbaum Helpern Syracuse & Hirschtritt LLP & Jamie Benjamin Walton Stecher, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

Austin Capital Management GP Corporation, Defendant, represented by Geoffrey J. Ritts, Jones Day, Harold Keith Gordon, Jones Day & Richard Joseph Bedell, Jr, Jones Day.

Austin Capital Management Limited, Defendant, represented by Geoffrey J. Ritts, Jones Day, Harold Keith Gordon, Jones Day & Richard Joseph Bedell, Jr, Jones Day.

Sandra L. Manzke, Defendant, represented by Carrie Ann Tendler, Kobre & Kim LLP, Jonathan David Cogan, Kobre & Kim LLP, Michael Sangyun Kim, Kobre & Kim LLP & Maggie E. Sklar, Kobre & Kim, LLP .

Robert Schulman, Defendant, represented by Seth M Schwartz, Skadden, Arps, Slate, Meagher & Flom LLP.

Oppenheimerfunds, Inc., Defendant, represented by David Adam Kotler, Dechert, LLP.

FutureSelect Portfolio Management, Inc., Defendant, represented by Emily Sinclair Alexander, Thomas, Alexander & Forrester, LLP, Nicholas Kord Lagemann, Sidley Austin LLP & Thomas K. Cauley, Sidley Austin, LLP.

Ron Ward, Defendant, represented by Nicholas Kord Lagemann, Sidley Austin LLP & Thomas K. Cauley, Sidley Austin, LLP.

Austin Capital Management Ltd., Defendant, represented by Geoffrey J. Ritts, Jones Day & Richard Joseph Bedell, Jr, Jones Day.

Jim Mitchell, Defendant, represented by Seth M Schwartz, Skadden, Arps, Slate, Meagher & Flom LLP.

Tremont Market Neutral Fund, Defendant, represented by Ralph A. Siciliano, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

Rupert Allan, Defendant, represented by Seth M Schwartz, Skadden, Arps, Slate, Meagher & Flom LLP.

Rye Select Broad Market Fund, Defendant, represented by David Jeffrey Kanfer, Tannenbaum Helpern Syracuse & Hirschtritt LLP, Ralph A. Siciliano, Tannenbaum Helpern Syracuse & Hirschtritt LLP & Richard Walker Trotter, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

Rye Select Broad Market Prime Fund, Defendant, represented by Ralph A. Siciliano, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

Susan Hammond, Defendant, represented by Maggie E. Sklar, Kobre & Kim, LLP.

Lynn O. Keeshan, Defendant, represented by Seth M Schwartz, Skadden, Arps, Slate, Meagher & Flom LLP.

Tremont Market Neutral Fund II LP, Defendant, represented by David Jeffrey Kanfer, Tannenbaum Helpern Syracuse & Hirschtritt LLP & Richard Walker Trotter, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

Tremont Opportunity Fund II LP, Defendant, represented by David Jeffrey Kanfer, Tannenbaum Helpern Syracuse & Hirschtritt LLP & Richard Walker Trotter, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

Spectrum Select L.P., Nominal Defendant, represented by Alan William Sparer, Sparer Law Group, Bennette Deacy Kramer, Schlam Stone & Dolan LLP, James Nabwangu, Sparer Law Group, Kevin Harvey Lewis, Sparer Law Group & Richard Henry Dolan, Schlam Stone & Dolan LLP.

Rye Select Broad Market XL Fund, L.P., Nominal Defendant, represented by Jamie Benjamin Walton Stecher, Tannenbaum Helpern Syracuse & Hirschtritt LLP & Ralph A. Siciliano, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

Rye Select Broad Market XL Portfolio Limited, Nominal Defendant, represented by Ralph A. Siciliano, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

FutureSelect Prime Advisor II, LLC, Nominal Defendant, represented by Emily Sinclair Alexander, Thomas, Alexander & Forrester, LLP.

Stuart Pologe, Consolidated Defendant, represented by Seth M Schwartz, Skadden, Arps, Slate, Meagher & Flom LLP.

Patrick Kelly, Consolidated Defendant, represented by Seth M Schwartz, Skadden, Arps, Slate, Meagher & Flom LLP.

Rye Select Broad Market Prime Fund LP, Consolidated Defendant, represented by David Jeffrey Kanfer, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

Rye Select Broad Market XL Fund LP, Consolidated Defendant, represented by David Jeffrey Kanfer, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

Rye Select Broad Market Prime Fund LP, Consolidated Defendant, represented by David Jeffrey Kanfer, Tannenbaum Helpern Syracuse & Hirschtritt LLP & Richard Walker Trotter, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

Rye Select Broad Market XL Fund LP, Consolidated Defendant, represented by David Jeffrey Kanfer, Tannenbaum Helpern Syracuse & Hirschtritt LLP & Richard Walker Trotter, Tannenbaum Helpern Syracuse & Hirschtritt LLP.

KPMG LLP, Intervenor Defendant, represented by Gregory Gil Ballard, Sidley Austin LLP.

Phoenix Lake Partners, LP, Intervenor Plaintiff, represented by Kevin M. Harr.

Philadelphia Financial Life Assurance Company, Claimant, represented by David T. McDowell, Edison, McDowell & Hetherington, LLP, Hutson Brit Smelley, Edison, McDowell & Hetherington, LLP, Richard Gerard Haddad, Otterbourg, Steindler, Houston & Rosen & Thomas F.A. Hetherington, Edison, McDowell & Hetherington LLP.

New Jersey Carpenters Annuity Fund, New Jersey Carpenters Pension Fund, New Jersey Carpenters Welfare Fund, ADR Provider, represented by Robert Alan Wallner, Milberg LLP, Charles Slidders, Milberg LLP & Kent Andrew Bronson, Milberg LLP.

The Royal Bank of Scotland, N.V., Objector, represented by Michael Svetkey Feldberg, Allen & Overy & Lanier Saperstein, Allen & Overy, LLP.

HSBC Bank plc, Objector, represented by David E. Brodsky, Cleary Gottlieb.

HSBC USA Inc., Objector, represented by David E. Brodsky, Cleary Gottlieb.

Edward L White, Objector, represented by Kevin M. Harr.

ABN AMRO Bank (Ireland) Ltd., Objector, represented by Christopher R. Harris, Latham & Watkins, LLP.

Spectrum Equities, L.P., Objector, represented by Deborah A. Ellingboe, Faegre Baker Daniels LLP, James Volling, Faegre Baker Daniels LLP, Michael Federick Cockson, Faegre Baker Daniels LLP & Nicholas Nelson, Faegre Baker Daniels LLP.

Spectrum Select II, L.P., Objector, represented by Deborah A. Ellingboe, Faegre Baker Daniels LLP, James Volling, Faegre Baker Daniels LLP, Michael Federick Cockson, Faegre Baker Daniels LLP & Nicholas Nelson, Faegre Baker Daniels LLP.

Madelyn Haines, Objector, represented by Vincent T. Gresham, Vincent T. Gresham, Law Office.

Collins Capital Investments LLC, Objector, represented by Hilary Lovett Preston, Vinson & Elkins L.L.P..

Richard Peshkin, Interested Party, represented by David S. Nalven, Hagens Berman Sobol Shapiro LLP, Lee Matthew Gordon, Hagens Berman Sobol Shapiro LLP, Reed Richard Kathrein, Hagens Berman Sobol Shapiro LLP & Steve W. Berman, Hagens Berman Sobol Shapiro LLP.

Irving H. Picard, Interested Party, represented by Marc Dennis Powers, Baker & Hostetler LLP.

2005 Tomchin Family Charitable Trust, Intervenor, represented by Jason Samuel Cowart, Pomerantz LLP.


OPINION

THOMAS P. GRIESA, District Judge.

This case concerns money lost in Bernard Madoff's Ponzi scheme. Plaintiff Cayman National Trust Company caused its insurance carrier to invest approximately $4 million with two Tremont funds. The Tremont funds then invested part of that sum in Bernard Madoff's scheme, losing approximately $1.5 million of plaintiff's money. Plaintiff claims defendants—the Tremont funds and related entities—induced plaintiff...

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