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10847056/9
Writer's Direct Number Writer's E-mail Address212.756.2733 howard.schiffman@srz.com
March 6, 2009
VIA HAND DELIVERY
Hon. Richard B. Lowe IIICommercial DivisionNew York County Supreme Court60 Centre StreetNew York, NY 10007Re:
 New York University v. Ariel Fund Limited, et al.
, Index No. 603803-2008 Dear Justice Lowe:For the past two-and-a-half months, our client, Ariel Fund Limited (“Ariel Fund”or the “Fund”), has been hamstrung by a temporary restraining order that restricts or prevents itsmanager from engaging in any number of transactions to enable the Fund to continue to operatein the best interests of its investors, including paying counsel to pursue a claim to recover fromthe estate of Bernard L. Madoff Investment Securities LLC the very losses that are the subject of this proceeding. This is despite the fact that Plaintiff makes zero allegations of wrongdoingagainst the Fund and has now admitted that it asserts no claims against the Fund. This state of affairs must come to an end.As Your Honor may recall, at the conclusion of the February 17, 2009 oralargument in the above-referenced proceeding, I explained that the current temporary restrainingorder (“TRO”) places severe restrictions on Ariel Fund’s ability to operate, and the Courtsuggested we negotiate a modification of it with Plaintiff’s counsel. We have urgently attemptedto do so during the nearly three weeks that have now passed since then, but Plaintiff’s counselsteadfastly insists that the TRO should continue to restrict the Fund’s ability to engage counseland meet certain potential contractual obligations despite the absence of any claim against theFund and notwithstanding the harm the TRO is causing and threatening to cause the Fund.Accordingly, we respectfully ask the Court to schedule a conference call (as the Court suggestedat oral argument) so that we can promptly renew our request that the Court lift or modify theTRO.
 
Hon. Richard B. Lowe IIIMarch 6, 2009Page 2
10847056/9
By way of very brief background, the initial complaint in this proceeding namedthe Fund in two counts (one for negligence; the other for an alleged violation of N.Y. Gen. Bus.Law § 349); the Fund moved to dismiss; Plaintiff filed an amended complaint that abandonedboth those initial claims as to the Fund and instead named the Fund in just one count (for breachof contract) without setting forth any allegations of wrongdoing by the Fund. Ariel Fund movedto dismiss again; Plaintiff explained that the Fund was named as a “nominal defendant”; andPlaintiff did not even attempt to defend the viability of the breach of contract claim. In short, theFund is not alleged to have committed any wrongdoing, and Plaintiff does not seek any recoveryfrom it.Nevertheless, the Fund’s assets currently remain subject to the TRO’s restrictionson their use, including:
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paying counsel to file claims in the Securities Investor Protection Actbankruptcy proceeding to recover for the benefit of the Fund and, byextension, its investors (including Plaintiff) the money that BernardMadoff stole from it -- i.e., the very money as to which Plaintiff seeksdamages through this proceeding;
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paying counsel to represent the Fund’s other interests with respect to thebankruptcy trustee;
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honoring any contractual or other legal indemnification obligations to theFund’s auditors and registrar, each of which have threatened to sue theFund to indemnify them for the costs incurred as a result of Plaintiff’snaming them as defendants in this proceeding;
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retaining and paying counsel to defend any such indemnification actions;
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paying the Fund’s subadvisors who are responsible for trying to liquidatethe Fund’s hundreds of millions of dollars worth of non-Madoff assets forthe benefit of the Fund’s investors;
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paying counsel to help the Fund cooperate with the various governmentinvestigations into Madoff’s alleged fraud; and
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It is perhaps the recognition of this fact more than any other that has led investors withinterests totaling nearly $400 million in Ariel Fund and other funds holding such assets tofile affidavits expressing their opposition to the imposition of pre-judgment relief overthe Fund.
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