EFTA00723203.pdf

IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA CASE No. 09-059301 STUART A. ROSENFELDT, individually, and ROTHSTEIN ROSENFELDT, ADLER, P.A. a Florida corporation, Plaintiffs, -vs- SCOTT W. ROTHSTEIN, individually, Defendant. HEARING BEFORE THE HONORABLE JEFFREY STREITFELD Monday, November 23, 2009 2:06 p.m. - 2:43 p.m. 201 SE Sixth Street Room 970 Fort Lauderdale, Florida 33401 Reported By: Pamela J. Sullivan, RPR, FPR, CLR Prose Reporting Agency, Inc. (561) 832-7500 PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by Pamela Sullivan (501-333-772-1552) c2f9b2c7-176c-4617-b2c9-49155e7a2065 EFTA00723203 EFTA00723204 1 APPEARANCES 2 3 6 8 7 10 11 31 13 14 15 16 17 18 19 20 21 22 29 24 25 HERBERT sarnot ESQUIRE. TRUSTEE 5401 Hammock Drin Cali Goblet, Florida 331564105 305.663.3374 KENDALL COFFEY. ESQUIRE COFFEY BURLINGTON Office ea the Grove, Penthouse 2699 Sash Dayshcee Dive Miami. Florida 33133 JOSEPH S. GELLER ESQUIRE STEVEN GEUERSHARDE.QUIll 18951 2981 Monte Susie Avestan, Maids 33180 CHARLES H. uarrmAtt ESQUIRE BERGER SINUERMAN, ATTORNEYSATLAW 350 Emu 1.4 OlasEkelevard Suite 1000 Fen Lauderdale. Mende 333301 MICHAEL 3 PIXE ESQUIRE, ESQUIRE BURMAN, OUTICN, LUTTIER & COIRMAN, LIP 303 Banyan Boulevard Suiio 400 West Palm Bach. Maid', 33408 (CONTINUED) 1 APPEARANCES CONTINUED: 2 3 4 VALLIANT Ft SCHERER, ESQUIRE JAMES D. SILVER, ESQUIRE 5 CONRAD &SCHERER, ATTORNEYS AT LAW 6333 South Federal highway 6 Fat Lauderdale, Florida 33301 7 8 9 WARREN R. TRAZENFELD, R. VIRE WARREN TRAZENFELD, 10 3225 Aviation Avenue Suke 700 11 133.4741 12 13 Also Present: 14 Richard A. Pollack CPA 15 16 17 18 19 20 21 22 23 24 25 Page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 4 PROCEEDINGS THE COURT: Good afternoon. MR. STETTIN: Good afternoon, Judge. Herbert Stettin, the court-appointed receiver and chief restructuring officer in this. First thing I would like to report to the Court — and I know you had expressed interest in this — is the United States Trustee appointed me as the Chapter Eleven Trustee on late Friday afternoon. THE COURT: Well, we welcome you, sir. MR. STETTIN: May I give the Court a copy of it? (Handing up to the Court.) Procedurally what will happen next — THE COURT: I guess you wish you had been out of town when I called you; huh? MR. STETTIN: Procedurally, what will happen next in the banlauptcy is that there is a hearing tomorrow before Judge Ray. He is expected to enter an order approving that appointment And when I post the bond, I will then start acting as the trustee — in fact, I think I am entitled to act as the trustee at this point, after the appointment by the United States Trustee. Page 5 1 There were a series of orders entered by 2 Judge Ray, as well. And I'll certainly be happy to 3 give you a copy of them. Essentially, he ordered 4 the appointment of a Chapter Eleven trustee. He 5 denied the objection of the United States Trustee 6 to my acting as the chief restructuring officer, 7 saying it was moot because there was going to be a 8 trustee. 9 THE COURT: I think! have some of those. 10 MR. STETTIN: He authorized me to make some 11 payments, including the ones we had talked about, 12 which are to pay the medical insurance for the 13 employees. 14 THE COURT: Yeah, I have these ones. 15 MR. STETTIN: Good. You've got them. Thank 16 you- 17 I have reported to Judge Ray, and if you will 18 give me a moment, Ill report to you essentially 19 where we are at this point. 20 THE COURT: I'll give you as much time as 21 you'd like. 22 MR. STETTIN: Jurisdiction, in fact, is in 23 the bankruptcy court over the assets of the debtor. 2 4 That's the Rothstein, Rosenfeldt and Adler firm. 25 This Court's continuing jurisdiction will be, 4 .61111•••••• (561) 832-7500 2 (Pages 2 to 5) PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by Pamela Sullivan (501-333-772-1552) e2Mb2e7-170c.-4617-b2e94915587a2066 EFTA00723205 Page 6 1 in my opinion over two things. The first will be 2 tomorrow at hearing we're going to ask whether or 3 not Judge Ray wants to have this Court fix the 4 professional fees for myself and the accountants 5 that I had retained under your order for their 6 services during the receivership. It seems to me 7 it's appropriate to do that, but it's Judge Ray's 8 call. If he does that, then this Court would set 9 those fees, and they would be paid by me, as 10 trustee of the bankruptcy estate. 11 The second thing would be there's already at 12 least one pending suit that I know is in this 13 division, filed by Mr. Scherer. There probably 14 will be others that will come before you. As long 15 as they don't name the debtor and they don't 16 involve the assets, which are only those of the 17 debtor, then it's entirely appropriate for this 18 Court to continue its jurisdiction over those 19 cases. And, in fact, there may be some instances 20 where we would welcome that, as well. We think 21 it's appropriate to do that 22 THE COURT: Well, that's really the 23 fundamental issue, because the pending lawsuits, 24 including the recently filed Tome (phonetic) by 25 Mr. Scherer, does name the firm as a Defendant. Page 8 1 of a report to the Court. But I can tell you that 2 it's an active discussion right now. And our view 3 of it is that there are some claims that should be 4 brought in in this court. 5 THE COURT: All right So you're going to 6 wait and see, and then 7 MR. STETTIN: It will work out over time. 8 THE COURT: — evaluate that on a 9 case-by-case basis? 10 MR. STETTIN: Yes, sir. 11 THE COURT: And no particular timetable on 12 that? 13 MIL STETTIN: Not a particular timetable, but 14 it will be fairly soon. There are so many 15 investigations going on now from the authorities, 16 as well as the bankruptcy estate, as well as 17 others. I wish I could be more specific, but I 18 think it would be premature to start speaking about 19 them now. 20 I can tell you that we are — and this is 21 important — we are heavily involved in making sure 22 that clients' rights of the firm are being 23 protected. 24 We met with the Florida Bar. They're in full 25 agreement with what we're doing, and that would be Page 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 state court? 25 MR. STETTIN: I'm not sure. It's the subject 1 MR. STETTIN: It does not. 2 THE COURT: It does not? 3 MR. STETTIN: Does not. He was careful to do 4 that 5 THE COURT: All right 6 MR. STETTIN: One of the orders that you'll 7 have there is an order enforcing the stay imposed by Section 362 of the Bankruptcy Code against any actions taken against the debtor or its property. THE COURT: Okay. MR. STETTIN: Mr. Scherer was very careful not to name the debtor. THE COURT: Okay. Well, there are others that do. MR. STETTIN: There are. They will be stayed, as against the debtor. But if they name other Defendants who are not in bankruptcy, there's is no stay. THE COURT: Well, have you — I assume it's premature, but have you set a time when you are going to report to the Court in the bankruptcy whether or not adversary claims against the law firm will or will not be allowed to proceed in Page 9 1 to ensure that the files taken by lawyers who were 2 formerly with the firm and now want to take those 3 files with them, we're making sure that they get 4 copies of those files. We're making sure that the 5 lawyers' calenders are made available to them. 6 We're also making sure that, to the extent we 7 can, if there's any money owed the firm, we're 8 trying to make sure that, when we turn the files 9 over, we can have some arrangement as to payment. 10 Those clients whose lawyers are not 11 continuing, we're making arrangements to notify 12 them, as I think the law requires, of their option 13 to hire another lawyer to represent them, and it's 14 in their interest to do that. 15 We're also making sure that any clients who 16 are owed money by the fum, and there are a number, 17 are given the opportunity to file a claim in the 18 bankruptcy estate, so that they can protect their 19 interests. 20 THE COURT: Well, my understanding is that at 21 this point all of those issues are no longer within 22 my jurisdiction. 23 MR. STETTIN: I think you're right. 24 THE COURT: The issue of the continuation of 25 the law firm, how, when and under what 3 (Pages 6 to 9) (561) 832-7500 PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by Pamela Sullivan (501-353-772-1552) c2f9b2c7.176c-4617-b2c9-49155e7a2065 EFTA00723206 Page 10 1 circumstances it should be dissolved 2 MR. STETTIN: It won't be dissolved. 3 THE COURT: — will be done by Judge Ray. 4 MR. STETTIN: Essentially, yes. 5 THE COURT: What do you mean, essentially? 6 MR. STETTIN: Well, whether or not the firm 7 should be dissolved may be a decision that will be 8 made when, later in the case, whether or not a plan 9 of reorganization would be proposed. 10 THE COURT: But all of that is no longer 11 within this cowl. 12 MIL STETTIN: You're right. 13 THE COURT: The only aspects of that, really, 14 that remain are if Judge Ray should decide 15 accordingly, I will make a determination as to what 16 you should be paid during the time that you, the 17 CPA firm and Eager Singerman were working under 18 this Court's jurisdiction. At that point, I assume 19 you're going to voluntarily dismiss this action. 20 Or do you want to stay? 21 MR. STETTIN: I had not really considered the 22 prospect of dismissing the action. it's probably 23 correct to w that. I would like the opportunity 24 to talk to the lawyers about it first. 25 THE COURT: Well, at least you'll be stayed. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 12 Florida political committee as CCE, known as Floridians for a Stronger Tomorrow. THE COURT: Right. MR. JOSEPH GELLER: That entity received a $50,000 personal contribution from Mr. Rothstein, was not from the firm. But we have sought this Court's permission to deposit those funds by way of — THE COURT: Not appropriate. It's not appropriate. MR. PIKE: I'm sorry, Judge. THE COURT: If you need time to chat, I'll certainly give you that chance. Well, okay. So what is the position of the law firm and receiver now, the trustee? MR. JOSEPH GELLER: Well, fillet them speak for themselves, Judge. Just to say that we filed a complaint and also a motion for interpleader. THE COURT: Uh-huh. MR. JOSEPH GELLER: Who those funds properly should go to at this point is certainly beyond our decision-making ability. It's our belief that these monies should be subject to the jurisdiction of this Court by being placed in the registry of the Court And at that point the committee would 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 11 MR. STETTIN: Yeah. Yes. Oh, it is stayed now. THE COURT: Well, that I understand. But I mean formally stayed. MR. STETTIN: Yes. THE COURT: Other than unless the bankruptcy court should dismiss for some reason, in which case this could come back. I think this case should be dismissed, truly. MR. STETTIN: I understand. And ill make that point when we speak to my counsel. THE COURT: So I have other parties here. Is there someone who wishes to be heard on any motion this afternoon? MR. JOSEPH GELLER: Yes, Your Honor. Joseph Geller of Oreenspoon, Marder. THE COURT: Yes, sir. MR. JOSEPH GELLER: Accompanied today by my brother, Steven Geller. We have filed on behalf — THE COURT: Younger or older? MR. JOSEPH GELLER: That's my younger brother. THE COURT: Okay. MR. JOSEPH GELLER: We filed on behalf of a Page 13 1 be relieved of further responsibility. 2 THE COURT: I need your papas. I have no 3 motion, notice of hearing. 4 MR. JOSEPH GELLER: Okay. Your motion and — S okay. I don't believe — lame see If a 6 copy of the notice of hearing, as well. I know it 7 was furnished to your office. Yes, I do. 8 Now, it may be the case, Judge, from what I 9 heard, because when we filed there was no 10 bankruptcy, that having named RRA in an abundance 11 of caution, which is what we did, us 811 impediment 12 to our going forward. If necessary, we could — I 13 don't know that they have any rights to these 14 funds. And if the Court deemed it necessary, we 15 could dismiss them. 16 There is -- again, I don't want to speak for 17 any of the myriad of wonderful lawyers — 18 THE COURT: Well, have you spoken to them? 19 MR. JOSEPH GELLER: 1 had a brief 20 conversation. Apparently, there is some interest 21 in having the funds placed other than in the 22 registry of the court, to avoid the apparently not 23 inconsiderable fee for a deposit into the registry 24 of the court, though I believe Your Honor has the 25 authority to waive that fee in a case like this, (561) 832-7500 4 (Pages 10 to 13) PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by Pamela Sullivan (501.333-772-1552) c2f9b2c7-176c-4617-b2c9-49155e7a2065 EFTA00723207 Page 14 1 where it is in the public interest and not private 2 interest. 3 We are waiving our costs and fees, we've 4 waived reimbursement for the filing fee, we've 5 waived reimbursement for any costs or fees 6 associated with this. That's being borne by the 7 political committee in an effort to maximize the 8 amount of recovery that is available to whoever it 9 may be ultimately determined is entitled to these 10 monies. 11 I believe Your Honor has the authority in 12 such a case to waive the fee for a deposit, whether 13 some alternative private trust account, as I 14 believe you'll hear is being considered, would 15 save the other purpose my client seeks here, which 16 is to be relieved of any and all further 17 responsibility whatsoever for the disposition of 18 these funds, as opposed to malting a private 19 agreement not ordered by the Cowl to have the 20 funds held in some other fashion. I'll leave it to 21 Your Honor's wisdom and that of the very wise 22 lawyers before us. 23 Thank you, sir. 24 MR. STETTIN: May I respond? 25 The conversation that he referred to is one Page 16 1 occurred, when your esteemed, much younger 2 brother — 3 MR. JOSEPH GELLER: Much younger. 4 THE COURT: -- brought this to my attention through a letter, I immediately faxed that to 6 Mr. Coffey — my extremely gifted assistant fax'd 7 that to the parties in this case, basically saying, Fm bringing this to your attention. And I think I 9 advised him in the response letter that if you 10 believe — because the letter suggested that an 11 interpleader might be filed — if you think that is 12 appropriate, proceed to file it 13 And I had hoped that between then and now 14 there had been every effort made to get to the 15 bottom of where that money came from and come up 16 with a practical resolution of how to address it, 17 since Mr. Rothstein so far has not been asserting 18 any interest in any court proceeding, to my 19 knowledge, either in this building or the one a 20 couple of blocks up the street. 21 So ifs a lot of - a lot of people are 22 spending a lot of time and money for not a lot of 23 reasons. 24 MR. JOSEPH GELLER: if I may respond, 25 Your Honor, I•did have the opportunity-- Page 15 1 briefly before you came into the courtroom. I 2 suggested to him that the appropriate place for 3 that money would be in a separate segregated 4 account that I would hold as trustee. It would be 5 available if anyone asserted a claim against it. 6 And 1 don't understand Mr. Rothstein to 7 assert a claim against it. In fact, our view is 8 very simple: That money came from the firm; it 9 didn't come from Mr. Rothstein. He was simply the 10 fellow who wrote the check. 11 And perfectly happy to hold those funds 12 in escrow while we continue our efforts to recover 13 . back all of the money. 14 THE COURT: Have you confirmed that it was a 15 firm account that those funds came from? 16 MR. STETTIN: We don't know that yet. • 17 MR. JOSEPH GELLER: it was a personal check 18 from Mr. Rothstein. 19 THE COURT: Well, okay. But on what bank 20 account, is the question? Do you have a copy of 21 the check? 22 MR. JOSEPH GELLER: I don't believe I have 23 one here. 24 MR. STETTIN: Neither do we, Your Honor. 25 THE COURT: Truly, so we understand what Page 17 1 MR. STETTIN: If I might, first? 2 MR. JOSEPH GELLER: Of course, Mr. Stettin. 3 Always. 4 MR. STETTIN: Referring to what you said 5 before, if we choose to dismiss the case, we may 6 have this orphan account there, with no case 7 pending, another reason why it should be put in a 8 proceeding where it is safe, is available to anyone 9 who asserts a claim. 10 THE COURT: Well, this is a separate action. 11. This actually 12 MR. STETTIN: Oh, you filed a new suit? 13 THE COURT: Excuse me. 09-62619 is a 14 separately-filed suit assigned to this division, 15 Floridians for a Stronger Tomorrow. And one could 16 hardly argue with that. 17 MR. STETTIN: I misunderstood. 18 THE COURT: Scott Rothstein of Rosenfeldt, 19 Rothstein and Adler. 20 So it's been assigned to me because of the 21 administrative order put together in a really quick 22 method. So whether or not the receivership action 23 is dismissed will not affect this. 24 But my concerns are: One, you have named the 25 law firm as a defendant, so the stay and relief 5 (Pages 14 to 17 (561) 832-7500 PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by Pamela Sullivan (501-333-772-1552) c2f9b2c7-176c-4617-b2c9-49155e7a2065 EFTA00723208 Page 18 1 does affect my jurisdiction to proceed. And right 2 now it remains to be determined whether or not 3 Mr. Rothstein will be competing with the law firm 4 for that money. So the suggestion that you put it 5 in a segregated account makes sense. 6 Now, whether or not you agree to do it under 7 Mr. Stettin's authority or just notifying me what 8 you've done, that you're holding the money, which 9 you're free to. But I don't know, even under the 10 best of circumstances and the best relationship 11 with Mr. Foreman, that I have the authority to 12 waive his fee. Arid that doesn't exist currently -- 13 certainly monetarily. So... 14 MR. JOSEPH GELLER: If I might respond, 15 Your Honor? 16 THE COURT: Yes. 17 MR. JOSEPH GELLER: I did have the 18 opportunity, though I've not spoken with 19 Mr. Stettin on this matter, having spoken with him 20 numerous times about numerous other matters, to 21 speak either with him or with his counsel 22 Mr. Lichtman. I did have the opportunity to speak 23 with Mr. Coffey on Friday. 24 !can, if it would assist the Coun, proffer 25 to the Court and, if necessary, by way of 1 2 3 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 20 being dragged into future litigation. It is at this point, having renounced any claim whatsoever to the funds, or even, as I said, the costs or fees related to the interpleader action, it is a true stakeholder. And if some aggrieved party were to come along later and name Floridians for a Stronger Tomorrow and attack its private agreement to place the fiinds into some type of escrow or trust account, we don't wish to be in a position what we have to defend that. THE COURT: Okay. So, first, have you served Mr. Rothstein with this? MR. JOSEPH GELLER: We served the documents only upon counsel in the sense this was an emergency hearing. THE COURT: Did he accept service? MR. JOSEPH GELLER: We have not spoken directly with Mr. Nurik and have not — THE COURT: But you delivered copies of these papers with a notice bearing upon Mr. Nurik? MR. JOSEPH GELLER: They were served by fax and by e-mail, Your Honor. THE COURT: So here's what Fm going to do: As far as I'm concerned, the safest way - and I Page 19 testimony, though a copy of the check is not 1 2 attached, it is manifestly the case that the check 2 3 was received from -- at least the check itself bore 3 4 the name Scott Rothstein, and not the name of any 4 5 corporate or other entity. The source of the funds 5 6 to Mr. Rothstein, of course, is well beyond our 6 7 purview. 7 8 Were it necessary, as I said, to dismiss on 8 9 the spot, instanter, the addition of the law firm 9 10 as a party Defendant, I would certainly be prepared 10 11 to do that. They were added only in an abundance 11 12 of caution. And, certainly, they would have the 12 13 right to claim against money in the registry of the 13 14 court. 14 15 By saying that, I do not wish to indicate to 15 16 Your Honor that the notion that the funds could be 16 17 put in some agreed-upon trust account is 17 18 objectionable to us. The notion that it would be 18 19 held by Mr. Stettin is equally unobjectionable to 19 20 us, provided that it would be by not private 20 21 agreement on our part, but by order of Your Honor 21 22 in the nature of an interpleader. Because 22 23 Floridians for a Stronger Tomorrow, which has a 23 24 mission to try to improve the well-being of the 24 25 public of the State of Florida is not interested in 25 Page 21 understand it will reduce the sum ultimately going back to whoever is entitled to it -- but the only safe way to do it is to put the money in the court registry. Now, you can ask the clerk to waive the fee. MR. JOSEPH GELLER: I'll do that. THE COURT: And if Mr. Foreman is prepared to do that — certainly given the name of the Plaintiff, l'm sure he'll be motivated to do so — but that would be his decision. I will grant that release. MR. JOSEPH GELLER: Thank you. THE COURT: So submit the new order, and then you can deposit the money in the court registry. And if it turns out that the law firm wishes to assert a claim against it, I'll conduct a hearing and I'll resolve it. MR. JOSEPH GELLER: Thank you. We'll submit-- circulate the order. THE COURT: Thank you. MR. PIKE: Thank you. THE COURT: What else needs to be addressed here? MR. PIKE: Good morning, Judge. My name is Michael Pike, on behalf of Jeffrey Epstein. May I 6 (Pages 18 to 21) (561) 832-7500 PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by Pamela Sullivan (501-333-772-1552) e2f9b2c7-1760-4617-b2c9-49155e7a206.9 EFTA00723209 t ct, 22 1 approach? 2 THE COURT: Yes. 3 MR. PIKE: Judge, we're here today on a 4 motion to intervene. And with the Honorable 5 Stettin being appointed as the trustee, I'm not 6 quite sure what's going to happen with the motion 7 to intervene today. 8 Ifs my understanding that in Case Number 9 09-059301, Stuart Rosenfeldt, RA, versus 10 Scott W. Rothstein, that the Defendant in that 11 action is Mr. Rothstein, and not the firm. So i 12 don't think that the — any stay would apply in 13 this instance to this case. 14 i don't know what Mr. Stettin's decision will 15 be relative to the case that I just referenced, 16 whether or not that case is going to be dismissed 17 or -- Rosenfeldt is not here today. I don't know 18 if he has a lawyer present to represent that that 19 case is going to be dismissed or remain alive. 20 The long and the short is that we filed a 21 motion to intervene in order to preserve evidence. 22 and only evidence relative to the cases that 23 Mr. Rothstein allegedly offered for sale and 24 structured settlement interests. 25 THE COURT: Well, I think — I think at this Page 24 1 opinion, in the Palm Beach County suits? 2 MR. PIKE: In the Federal actions, as well as 3 in the Palm Beach County suit. 4 MR. STETTiN: Right. Right And one of the 5 orders that you've seen from Judge Ray invokes the 6 stay against any discovery against me in those 7 suits, as well. 8 We have an independent obligation to preserve 9 and protect records. I don't think this Court has 10 any jurisdiction — 11. THE COURT: I know I don't i don't. 12 MR. PiKE: Okay. So as long as Your Honor -- 13 THE COURT: So you need to seek relief before 14 Judge Ray to the extent you think it necessary, and 15 I don't know that you're going to have a problem. I 16 mean, have you made any effort -- not that he 17 hasn't been a busy guy. 18 MR. PIKE: We have. I — 19 THE COURT: I have a feeling that this is 20 going to be a nonadversarial relationship, as far 21. as preserving that evidence. 22 MR. PIKE: Right. We've -- I've already sent 23 e-mails and left messages with Mr. Lichtman. And 24 we have an order of the court by — Judge Marra 25 entered an order that we need to meet and confirm, Page 23 1 point i have no ability to entertain this motion 1. 2 today. Because the only -- right now, the only 2 3 work for me to do is to wind up what had already 3 4 been done, if Judge Ray allows me to do that. 4 5 So this relates to some of the aspects of the 5 6 lawsuit filed by Mr. Scherer, is that correct? 6 7 MR. PIECE: No. 7 8 THE COURT: It's entirely separate? 8 9 MR. PIKE: This is an entirely separate 9 10 action that was filed by Stuart Rosenfeld% and 10 11 Rothstein, Rosenfeldt and Adler. This has nothing 11 12 to do with Mr. Scherer's lawsuit that was filed,1 12 13 believe, last week, which is an entirely different 13 14 case. 14 15 /vfft STETTIN: May I ask counsel: is this the 15 16 suit that's pending in — 16 17 THE COURT: Palm Beach County. 17 18 MR. STETTIN: — Palm Beach County? 18 19 MR. PIKE: No. This is a suit that is 19 20 rending in the Circuit Court of the 17th Judicial 20 21 Circuit. 21 22 MR. STETTIN: No, not the instant suit that's 22 23 before this Court. The reasons for your . 23 24' intervention are to preserve and protect 24 25 25 Plaintiffs and potential Plaintiffs. information, records that are necessary, in your Page 25 but that order was entered prior to Mr. Stettin being appointed last week, so... 711E COURT: All right. MR. LICHTMAN: Your Honor, we repie:,ented to the Federal Court and the state court that of course we're preserving evidence. THE COURT: Okay. All right. Is there anyone else that wishes to be heard? No. So what I'm trying to get a handle on -- and this is apparently not going to happen today - is, ultimately, what is going to come here beyond the suit filed by Mr. Scherer. There are pending matters against at least one of the banks, GE Bank, where I don't believe the law firm is named, but Pm not sure. There obviously is going to be a lot of ancillary litigation against parties other than the firm. So have there been conversations with other counsel representing potential Plaintiffs or actual Plaintiffs as to what their intentions are and how they intend to proceed? MR. STETiIN: The answer is, yes, we've spoken to a number of the lawyers who represent (561) 832-7500 7 (Pages 22 to 25) PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by Pamela Sullivan (501-333-772-1552) c2f9b2c7-176c-4617-b2c9-49155e7a2065 EFTA00723210 Page 26 1 THE COURT: And? 2 MR. STETTIN: They're not ready yet to come 3 to a resolution. They're still in discussion. 4 Its pretty early in the case, Judge. 5 THE COURT: I know. I know. Because my — 6 this is my concern: When dealing with tobacco, I 7 had some forewarning about what would be coming. 8 So I set up a structure ahead of time so I knew I 9 was setting aside a certain amount of time each 10 month to address initial case management, establish 11 case management orders with regard to issues of 12 common interest. 13 I'll give you a chance to talk, Chuck. 14 MR. LICHTMAN: Okay. 15 THE COURT: Hold on. Thanks. 16 So if it's premature me doing that now, 17 because It may not be necessary, and that's fine, 18 but I would rather — if I need to be doing that 19 next year, I'd rather put that in motion this year, 20 and not come back having a lot of time already 21 filled up and saying, now what do I do. 22 So my thought was, if it's going to be 23 necessary to establish a block of time monthly to 24 address any cases assigned to this division that 25 relate to this block, and my initial thought was to Page 28 1 everybody to consider this court as the place for 2 it to be. 3 So, for sure, for our hundred million that 4 I'm speaking for now, that we want to be here 5 before you, and we'd love for you to start 6 scheduling it as soon as you can. 7 THE COURT: Well, this is what I intend to 8 do. I'm going to set aside, for as long as is 9 necessary, that lime. We will probably end up 10 putting some type of informative link together on 11 the website, as we had done with tobacco. Because 12 I see at least the possibility there are going to 13 be a lot of related motions, a lot of related 14 discovery, a lot of related motions as it addresses 15 that discovery. There are probably going to be a 16 lot of competing Plaintiffs. So the more we can 17 coordinate and work cooperatively, the better off 18 everyone will be, starting with me. Always very 19 important. 20 So theft what we're looking at. Actually, 21. lets see, the first — it's complicated, because 22 the fast Friday in January is a holiday. It's 23 January I. 24 Were off the record. 25 (Discussion held off the record.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 27 do that on the third Friday of each month in the afternoon. Apparently, that doesn't meet with a great deal of support (tom my judicial assistant, but what else is new. So... Yes, Mr. Scherer? MR. SCHERER: Thank you, Your Honor. I represent a hundred million dollars worth of victim investors who have filed an action against GE Bank and certain other Defendants. We have spoken and have worked with your choice of receiver and supported him at the bankruptcy hearing strongly that he be made the trustee in the case. It is our view that the state court is the appropriate place for all but the bankruptcy-related claims. And we're going — if we don't have Mr. Stettin's agreement and the committees there in bankruptcy, we'll fight like heck to keep them here. But I don't think that's going to haPPea I think Your Honot's idea about reserving time is a good one. My view is that I believe there to be 500 million dollars worth of swindled investors that are going to want to probably be in a lawsuit somewhere. And 1 believe — Pm urging Page 29 1 THE COURT: Back on the record. 2 1 got an approval from my assistant So 3 because of the unique nature of Friday — the first 4 Friday being theist of January, a court holiday, 5 we're looking at doing this the fourth Friday in 6 January, which is the 22nd of January. 7 Let's see. No, I'm going to reverse myself, 8 because every other — I'd like it to be uniform. 9 So I'll just give up a half a trial day. It will 10 be the third Friday of each month, which the first 11 such conference would be January the 15th, 2010, at 12 1:30 in this courtroom. And then February would be 13 the 19th, March the 19th, and then April the 16th. 14 And well take it from there to see what's 15 happening or whether we need to continue. And it 16 will be to address all pending motions. 17 Now, if there's a motion that needs to be 18 heard before then and I have a feeling 19 Mr. Trazehfeld is going to tell me that — I will 20 hear motions outside the scheduled time on an 21 as-needed basis. But it will be my goal to, 22 wherever possible, structure a coordinated case 23 management. 24 Yes, sir. 25 MR. TRAZENFELD: Just very briefly, Judge. VvaRWIalm.A.• vuo.c.,1" (561) 832-7500 8 (Pages 26 to 29) PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by Pamela Sullivan (501-333.772-1552) c2f9b2c7-176c-4617-b2c9.49155e7a2065 EFTA00723211 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 issues. Page 30 1 Warren Trazenfeld. My claim is only against the 2 law firm presently, and only deals with a 3 malpractice claim. So it's — I'm in bankruptcy 4 court right now. 5 But Judge Stettin, of course, would have the 6 option of allowing me to come back to state court, 7 as long as they only deal within the malpractice 8 policy. So I'm just saying there may be some 9 latecomers to those meetings, because I don't know 10 when Judge Stettin and his counsel will make that 11 decision. So people such as myself or others may 12 only start attending those in the second or third 13 month, which may be problematic in terms of the 14 goals you're seeking. And I just mention that in 15 terms of what might occur. 16 THE COURT: Not at all. Not at all. 17 The way things should develop is all 18 interested parties may attend these conferences, 19 whether or not they actually have a case pending or 20 not, with the understanding they very well may 21 soon, a may decide, after attending, they don't 22 want to. So that's perfectly fine, also. 23 MR. TRAZENFELD: Thank you. 24 THE COURT: I mean, what we had with tobacco, 25 by the way, for example, I mean, I had Plaintiffs' Page 32 1 Mr. Coffey, is there anything you wanted help 2 with? 3 MR. COFFEY: No, Your Honor. But I do really 4 want to thank you for all the emergency hearings. 5 I know it was very disruptive. I don't need to 6 tell you what a wonderful staff you've had. It has 7 made a very, very difficult situation much easier. 8 And I just want to thank you for your assistance. 9 THE COURT: Well, thank, sir. miss you, 10 too. 11 Yes, Mr. Lichtman. 12 MR. LICHTMAN: Because I know you don't like 13 surprises, I think that there's at least a chance 14 that you will have a number of interpleaders 15 brought before you. We are going to try to develop 16 a strategy to deal with them, and it's very high on 17 the list of things to do. But it wouldn't surprise 18 me if other similar cases are filed. 19 THE COURT: Well, I will say that, although 20 there was a time where I thought even the banking 21 industry might get to this point, too, where they 22 charge you a fee to take your money, our clerk 23 is — that's the only way it's done here. I mean, 24 when you want to put money in the court, a fee is 25 charged to put it in has, and there's not a dime Page 31 1 counsel all over the state attending these 1 2 conferences from time to time over the past two 2 years, because we started doing that in January of 3 4 2008. And we've done it every month, except for 4 5 one — one summer month, since then. 5 6 But they're — many of them have not come to 6 trial yet. There are only a handful of Plaintiffs' 7 lawyers that come to trial. There are some little 8 known lawyers, like Willie Gary and Chris Searcy 9 that I guess will show up eventually. 10 MR. TRAZENFELD: Thank you, Judge. In an 11. abundance of caution, I'll make sure — 12 MR. SCHERER: Not if they read about your 13 last verdict. 14 THE COURT: Probably next week I'll want that 15 Jury beck here. 16 MR. TRAZENFELD: Thank you, Judge. 17 THE COURT: So the idea is for litigants on 18 both sides of the cases, both Plaintiff and 19 Defendant, to attend these conferences on matters 20 of common interest, so we can try to put together a 21 structure that everybody can live with. Because it 22 can get relatively chaotic and very, very conflict 23 oriented, if we don't work together on these 24 25 Page 33 of interest paid on it. So truly, starting with Mr. Gaels petition today, that's really a shame. That's really a shame. Some other mechanism should be created where an account is — a protected account is created where there is no fee charged to put the money in, and interest accrued, even at the very nominal rates that exist today, on that money. And if you all can come to accommodation on that, and it very well may be that, in consultation with Mr. Nurik, he'll have no objection to that. And if you — be glad to sign an agreed order on that. I'm only saying put the money into the court registry, if that is the only choice you have. MR. JOSEPH GELLER: Your Honor, while it's om intention to do that for the reasons we stated, I certainly will not only submit the order after circulating it, but we will ensure that at least the opportunity for these conversations occurs before we race to make the deposit THE COURT: It could very well may be that if you had said, we want to put the money in a trust account in Mr. Stettin's jurisdiction, do you have an objection, he may come back and say, (561) 832-7500 9 (Pages 30 to 33) PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by Pamela Sullivan (501-333-772-1552) c2f9b2c7-176c.4617-b2c9-49155e7a2065 EFTA00723212 Page 34 1 Mr. Rothstein has no objection. 2 MR. JOSEPH GELLER: We're less concerned with 3 the possibility of an objection from him than we 4 are to subsequent objections either from 5 Mr. Scherer -- though he's here today -- but people 6 similarly situated, such as he's indicated, 7 representing $400 million potentially in other 8 claims, who may subsequently find fault, however, 9 again, Your Honor, with the decision to put it in a 10 particular place. 11 But let me say again that, while we will 12 circulate the order as quickly as possible, we'll 13 certainly allow for the possibility of having these 14 conversations before we race to put the money into 15 the registry. 16 THE COURT: All right. So for now, if I am 17 needed for a hearing, make myself available on 18 short notice, if that's required. And in between 19 that, if there are motions that need to be heard 20 before the 15th of January, upon receiving them, 21 I'll attempt to accommodate them. Failing that, 22 I'll hear any matters that need to be heard on the 23 15th of January 2010 at 1:30 in this courtroom. 24 And you'll keep me posted; right? 25 MR. JOSEPH GELLER: Thank you very much. Page 35 1 (Whereupon, the hearing was concluded at 2 2:43 p.m.) 3 4 5 6 CERTIFICATE 8 THE STATE OF FLORIDA COUNTY OF PALM BEACH. 9 10 11 I, PAMELA J. SULLIVAN, Registered Professional 12 Reporter, State of Florida at large, certify that I was 13 authorized to and did stenographically report the 14 foregoing proceedings and that the transcript is a true 15 and complete record of my stenographic notes. 16 Dated this 1st day of December, 2009. 17 18 19 PAMELA J. SULLIVA R, CLR 20 21 22 23 24 25 10 (Pages 34 to 35) (561) 832-7500 PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by Pamela Sullivan (501-333-772-1552) c2f9b2c7-176c4617-b2c9491659782055 EFTA00723213