EFTA00586975.pdf

Timcstamp: 1272212009 4:03 PM EST AFFIDAVIT OF GLENN DUBIN STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK) Glenn Dubin, being duly sworn, deposes and says: 1. I am over twenty-one years of age and am competent to testi& to the matters stated herein because I have personal knowledge of the facts and statements in this affidavit. Each of the facts and statements is true and correct. 2. From 2002 and at least through 2007, an entity that I controlled owned an interest in the general partner of DB Zwim Special Opportunities Fund, L.P. ("Fund"). The Fund was named after Daniel Zwim ("Zwim"). While Zwim was responsible for day-to-day management of the Fund, I helped raised capital for the Fund and Zwim would consult with me about various issues. 3. One of the early investors that I encouraged to invest in the Fund was Jeffrey Epstein ("Epstein"). Epstein was both a personal friend of mine and a major client of my firm, Highbridge Capital Corporation. Between 2002 and 2005, Epstein (through an entity called Financial Trust Company, Inc.) invested $80 million in the Fund. 4. In early October 2006, Zwim informed me that he was firing the Fund's then-Chief Financial Officer, Perry Gruss. Zwim said that he discovered various irregularities at the Fund, including that investors' money was used to pay for an airplane that would be owned by Zwim's company. 5. During October 2006, Zwim told me that he made various attempts to contact each investor and explain the situation to them. One of those investors was Epstein. 997683v1/011585 EFTA00586975 Timcstamp: 12/22/2009 4:03 PM EST 6. After receiving one of Zwim's calls, Epstein called me very upset. Epstein said that Zwim had initially described the irregularities as "nonmaterial" but on a subsequent call Zwim's description of the issues made it clear to Epstien that the problems were material. When Epstein confronted Zwim about his earlier description, Zwim explained that his counsel had told him to use that language. Epstein felt that Zwirn had lied to him Given the situation, Epstein told me that he wanted to redeem his entire investment in the Fund immediately and that he had made that demand to Zwim. [I DON'T REALLY KNOW EXACTLY WHAT OCCURRED. I KNOW THERE WERE TWO CALLS INCLUDING ONE WITH SCHULTE, BUT I DON'T KNOW IF GLENN PARTICIPATED OR NOT, ETC. I WOULD OMIT THE HIGHLIGHTED LANGUAGE ABOUT ZWIRN HAVING LIED ALTOGETHER (IT IS NOT 100% RELEVANT AND UNDERMINES ANY CLAIM OF REASONABLE RELIANCE FROM THIS POINT FORWARD), BUT IT IS THERE FOR COMPLETENESS.] 7. In response, I talked to Zwim about Epstein's demand. Zwirn was concerned that such a withdrawal could cause a "run-on-the-bank." Zwirn asked me to help convince Epstein to reduce his demand, which I agreed to do. 8. Subsequently, I participated in a three-way call among Zwim, Epstein, and myself. During this call, Epstein again demand all of his money back from the Fund. Zwim responded that such a withdrawal could cause a "run-on-the-bank." Zwim pleaded with Epstein to reduce his withdrawal demand to request return of his initial invested capital only. Zwirn promised that if Epstein reduced his request, the Fund would honor it. Given my prior discussion with Zwim, I urged Epstein to accept Zwim's proposal as a way of resolving the dispute. During these discussions with Epstein, Zwim did not dispute that Epstein had the right to withdrawal all of his money. [IT WOULD BE GREAT IF WE COULD GET GLENN TO SAY THAT ZWIRN 997683v1/011585 EFTA00586976 Timcstamp: 12/22/2009 4:03 PM EST ADMITTED JEE HAD THE RIGHT TO WITHDRAWAL HIS MONEY. MY FEAR IS THAT THIS CLAIM WON'T SEEM CREDIBLE BECAUSE THERE IS AN EMAIL ON NOV 13 FROM ZWIRN TO GLENN THAT SUGGESTS ZWIRN JUST GOT DONE EXPLAINING TO HARRY THAT JEE'S INVESTMENT WAS LOCKED-UP.] 9. It is my understanding that after this conversation, Epstein made a written demand to withdrawal $80 million of FTC's investment in the Fund. It is also my understanding that the Fund—at Zwim's direction—refused to honor this request. Glenn Dubin Sworn to before me this day of December, 2009. (Seal) Notary Public in and for THE STATE OF NEW YORK 997683v1/011585 EFTA00586977