EFTA00078700.pdf

EXHIBIT H IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS Division of St. Thomas/St. John 0 In the Matter of the Estate of: ) )PROBATE CASE )NO. ST-19-PB-0080 JEFFREY E. EPSTEIN, )ACTION FOR TESTATE Deceased. )ADMINISTRATION Official Transcript FEBRUARY 4, 2020 BEFORE: THE HONORABLE CAROLYN P. H. PERCELL Magistrate Judge Presiding APPEARANCES: ARIEL SMITH, ESQ. , PAMELA TEPPER, ESQ., Assistant Attorneys General Department of Justice GERS Building,Second Floor St. Thomas, Virgin Islands { On Behalf of the Government} 0 William Blum, Esq. Christopher Kroblin, Esq. Marjorie Whalen, Esq. Shari D'Andrade, Esq. Andrew Tomback, Esq. Daniel Weiner, Esq. {On Behalf of the Co-Executors EFTA00078700 Probate ST-19-PB-0080 2 APPEARANCES (Cont'd) Douglas Chanco, Esq. {On Behalf of Jennifer Araos} Kevin D'Amour, Esq., {On Behalf of Jane Doe 1,000 and Jane Doe } Richard Bourne-Vanneck, Esq. {On behalf of Tela Davis} John Benham, Esq., {On Behalf of Jane Doe} Melody Westfall, Esq., {On Behalf of Claimants Jane Doe 1-12} Sean Foster, Esq., {On Behalf of Anonymous Claimants EFTA00078701 Probate ST-19-PB-0080 3 I -N-D-E-X Motion Re: Appointment of Appraisers 12 Motion Re: Appointment of Master 22 Motion Re: Fee Applications 36 Motion Re: Quarterly Accountings 49 Motion Re: Claims Resolution Program/ Criminal Activity Lien Notice 63 WITNESSES DIRECT 103 Kenneth Feinberg 158 EFTA00078702 Probate ST-19-48-0080 103 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 was approved and signed by Justice Cabret January 30th at 2020. And we have your oath that was attested by the Clerk of the Court, Attorney Handy February 3rd at 2020. So you are properly before the Court. We will now swear the witness. Thereupon, first having been duly sworn, was examined and testified as follows: DIRECT EXAMINATION By Attorney Tomback: Q. Please state your name? A. Q. Where do you live? A. Q. Did you come down in St. Thomas specifically to testify in this proceeding? A. Yes. Q. And are you familiar with our filing indicating on January 9th in our brief that you would be here to answer questions that the Court may have? A. Yes. Q. And where were you most recently employed? EFTA00078703 Probate ST-19-PB-0080 111 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 Q. Is it a confidential program as well? A. It's confidential to the extent that we, as the program administrators and my staff and contractors, would be protecting the privacy of the victims. We wouldn't be sharing any information with the estate or publicly. But the confidential requirement is unilateral. It's only imposed on us and there's no requirement whatsoever that claimants limit their-- what information they want to share with whomever they wish -- you know, investigators, the public. This is an alternative to civil litigation and so we have no intention to interfere with any sort of criminal proceeding . Q. Are you familiar with the civil lawsuit that the Attorney General of the United States Virgin Islands filed in the other court? A. Yes. Q. And have you read the Complaint? A. I have. Q. And direct your attention--you probably don't remember this, but I'll tell EFTA00078704 Probate ST-19-PB-0080 118 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 not agents of the estate. We're not here to do their bidding. We make decisions on the design and I will make designs on the administration of the program, how it operates, and how claims are determined based on our own judgment and experience and the estate has agreed to be removed from any part of that process. Q. And so just to focus in on an individual claimant's claim and the amount of compensation that the program, and you as the administrator, arrive at, the statement provides that quote, the estate will have no authority to reject or modify the administrator's determination on any basis or as to any claims, close quote. Why is that important to the program and the claimants? A. It's important because to allow the estate a say in these decisions compromises the key-guiding principle of the program. It compromises our independence; it compromises our claims and confidentiality; it compromises the non-adversarial nature of the program. Q. And with respect to the program it EFTA00078705 Probate ST-19-PB-0080 158 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 whether you can say we can back out this amount, whatever is going on in the civil court should not be affected; we believe the estate, if the Attorney General, the Government of the Virgin Islands was to prevail, this will be the amount that they would recover and so we can safely expend these monies on this program, but remember the question was because we don't have the quarterly accountings, we don't have the full evaluation. We don't know what the estate consist of. ATTORNEY TOMBACK: Your Honor, I understand. Can we start with Mr. Feinberg just to address the subsequent concerns that the Attorney General have with the program, if I can call him? THE COURT: Just call him quickly. Thank you, . We have all exhibits admitted? Thereupon, KENNETH R. FEINBERG, first having been duly sworn, was examined and testified as follows: DIRECT EXAMINATION By Attorney Tomback: EFTA00078706 Probate ST-19-PB-0080 159 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 Q. Mr. Feinberg, before you were sworn in, I think you have all the exhibits in front of you so it would go much quicker. THE COURT: He's already sworn in. ATTORNEY TOMBACK: He already sworn in? THE COURT: Yes, we were good on this one. By Attorney Tomback: Q. Where do you live, Mr. Feinberg? A. Washington, DC. Q. Did you come down here just to testify in this proceeding? A. I did. Q. Where are you employed? A. I'm the Law Office of Kenneth R. Feinberg, PC. Q. What do that firm do? A. We specialize in alternative dispute resolutions, mediations, arbitrations and claim programs like the one proposed. Q. Would you just describe briefly to Your Honor your experience in this matter? A. I started in 1984 with the Agent EFTA00078707 Probate ST-19-PB-0080 170 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 Q. I mean, that's a very fine point I asked. It's not really clear to me whether the Attorney General is concerned about finding too many people eligible or finding too many people ineligible. I mean the goal of the program, right, is to figure out the people who are truly eligible and to accurately figure out what is just compensation? A. Correct. Q. That's the whole game, right? A. Correct. Q. Okay. We covered the concern about being forced to come to New York or not being heard. If need be, could you envision coming down here, I guess you or coming down here if there's enough people here and meeting with claimants? A. Absolutely. Don't forget, what these people often want as much as compensation, if not more, is validation, is acknowledgment, the opportunity to be heard and this is something that is a very important voluntary aspect of the program. Q. Ms. George complains that the EFTA00078708 Probate ST-19-PB-0080 171 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 program, quote, contains no assurances that the information submitted by a claimant cannot be later used against her if she thereafter decides to file suit against the estate or any other co-defendant. Is that criticism grounded in the way you see the program? A. No. No. The protocol expressly secures the confidentiality of anything provided by the claimant. The claimant, and the claimant alone, decides the extent of transparency or disclosure - not the program, not the administrator, or the estate. Q. A few more, on Page 6,there's a concern that notes, quote, the program provides no protection to claimants who voluntarily provide information that may later be used to defend the estate from claims or provides evidence against other victims. Does the program work that way? A. No. The program seals all the information and various common law and statutorial privileges apply. We've seen that in these other programs - attorney-client, etcetera; settlement discussions, etcetera. EFTA00078709 Probate ST-19-PB-0080 180 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 litigate or pursue other remedies. Q. Is the estate vulnerable to third party claims and how does that work if, in fact, the estate does not receive a general release from a compensated claimant? A. That's a very interesting provocative question raised by the Attorney General and others. And as stated earlier, the scope of the release has not yet been finalized. The estate has to make a decision. Does it want total peace? , you will pay what ever is necessary to secure a comprehensive release so we won't be cross-claimed by a claimant or alternatively now, if a claimant wants to release the estate but litigate against X or Y, that is up to the claimant. So that is a critical issue and you can argue both ways and I think that the estate and the administrator and the plaintiffs' lawyers are discussing that at this time. Q. Page 8, Ms. George complains that the program, quote, does not specify whether the administrator is permitted or required to EFTA00078710 Probate S7-19-P11-0080 181 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 share evidence with law enforcement, thus positioning the program as a potential means to conceal criminal activity, close quote. I take it that wasn't an accusation that you're trying to conceal anything, but in any event, what's your view on that? A. In the forty years that I've designed and administered these programs, law enforcement has never sought to secure any civil confidential information. In the church cases, the Attorney General of various states have come to us and said, you know, you have a lot of information about wrongdoings by Clergy and we refused to--we work out with the Attorney General, go see the diocese or the Church. Don't come to a program where claimants, individual victims have participated in a program on the absolute guarantee of the administrator that information that have been submitted will not be disclosed to anybody. And that is a very important part of this. Claimants do not want information disclosed. Q. The program, would it respect that wish of claimants? EFTA00078711 Probate ST-19-PB-0080 182 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 A. It's expressly spelled out in the protocol, yes. Q. And they can still go to law enforcement. Period. Full stop. It's up to them? A. It's up to them and they can go public. That's up to them. The estate cannot. The administrator cannot. Q. On Page 8, Ms. George says that the program, quote, presents an unavoidable conflicts of interest, close quote, between the executors and the program. She said, the Co-Executors have, quote, an inescapable conflict of interest in recommending a program that proposes to compensate any individual or entity making such allegations requiring in return overly broad releases. Do you have a view on this? A. You have to ask the estate on that. I can tell you that before we agreed to take on this assignment, and myself and Ms. Biros, we have received absolute assurances from the estate that they will play no role in the day-to-day administration of this program. EFTA00078712