10-2378
-
bk
(
L
)
IN THE
United States Court of Appeals
FOR THE SECOND CIRCUIT
I
N RE
: B
ERNARD
L. M
ADOFF
I
NVESTMENT
S
ECURITIES
LLC
ON APPEALFROM THE UNITED STATES BANKRUPTCYCOURTFOR THE SOUTHERN DISTRICTOF NEWYORK
REPLYBRIEFFOR APPELLANTSSTERLINGEQUITIES ASSOCIATES, ARTHUR FRIEDMAN,DAVID KATZ, GREGORYKATZ, MICHAELKATZ, SAULKATZ,L. THOMAS OSTERMAN, MARVIN TEPPER, FRED WILPON, JEFFWILPON, RICHARD WILPON, AND METS LIMITED PARTNERSHIP
10-2676-bk(CON), 10-2677-bk(CON), 10-2679-bk(CON),10-2684-bk(CON), 10-2685-bk(CON), 10-2687-bk(CON),10-2691-bk(CON), 10-2693-bk(CON), 10-2694-bk(CON),10-2718-bk(CON), 10-2737-bk(CON), 10-3579-bk(CON),10-3675-bk(CON)
d
K
AREN
E. W
AGNER
, E
SQ
.B
RIAN
S. W
EINSTEIN
, E
SQ
.J
ONATHAN
D. M
ARTIN
, E
SQ
.D
AVIS
P
OLK
& W
ARDWELL
LLP450 Lexington Avenue New York, New York 10017(212) 450-4000
Attorneys for Appellants Sterling Equities Associates, Arthur Friedman, David Katz, Gregory Katz, Michael Katz, Saul Katz, L. Thomas Osterman, MarvinTepper, Fred Wilpon, Jeff Wilpon, Richard Wilpon, and Mets Limited Partnership
Case: 10-2378 Document: 338 Page: 1 10/11/2010 121939 26
i
TABLE OF CONTENTS
P
AGE
TABLE OF AUTHORITIES
.................................................................................ii
PRELIMINARY STATEMENT
............................................................................1
ARGUMENT
............................................................................................................2
POINT I. ACCOUNT STATEMENTS ESTABLISH BROKEROBLIGATIONS AND “SECURITIES POSITIONS”FOR NET EQUITY CLAIMS
......................................................................2
POINT II. SECTION 78fff-2(b) IS IRRELEVANT
............................................9
POINT III.
NEW TIMES I
SUPPORTS NET EQUITY IN THIS CASE
.......11
POINT IV. APPELLEES’ “EQUITY” ARGUMENTS AREIRRELEVANT AND WRONG
..................................................................12
POINT V. NEITHER THE SEC NOR SIPC IS ENTITLEDTO DEFERENCE
........................................................................................15
POINT VI. AVOIDANCE POWERS ARE IRRELEVANTTO NET EQUITY
.......................................................................................16
CONCLUSION
.......................................................................................................19
Case: 10-2378 Document: 338 Page: 2 10/11/2010 121939 26
ii
TABLE OF AUTHORITIES
CasesP
AGE
In re A.R. Baron Co.
, 226 B.R. 790 (Bankr. S.D.N.Y. 1998).................................10
In re Adler, Coleman Clearing Corp.
, 263 B.R. 406 (S.D.N.Y. 2001).......14, 17-18
In re Bayou Group, LLC
, 362 B.R. 624 (Bankr. S.D.N.Y. 2007)...........................17
In re Bernard L. Madoff Inv. Secs.
,424 B.R. 122 (Bankr. S.D.N.Y. 2010)..........................................................11
In re Bevill, Bresler & Schulman, Inc.
, 59 B.R. 353 (D.N.J. 1986)........................10
Butner v. United States
, 440 U.S. 48 (1979)..............................................................3
Catskill Mountains Chapter of Trout Unlimited, Inc. v. City of New York
,273 F.3d 481 (2d Cir. 2001)..........................................................................15
Chevron U.S.A., Inc. v. Natural Res. Defense Council
,467 U.S. 837 (1984).......................................................................................16
In re C.J. Wright & Co.
, 162 B.R. 597 (Bankr. M.D. Fla. 1993)..............................7
Cmty. Health Ctr. v. Wilson-Coker
, 311 F.3d 132 (2d Cir. 2002)...........................15
In re Cont’l Capital Inv. Servs.
, No. 03-3370,2008 WL 6190251 (Bankr. N.D. Ohio Nov. 4, 2008)...................................10
In re Dairy Mart Convenience Stores, Inc.
, 351 F.3d 86 (2d Cir. 2003)................13
In re Enron Corp.
, Nos. M-47 (GBD), 01-6034 (AJG),Adv. Nos. 03-92677 (AJG), 03-92682 (AJG),2008 WL 281972 (S.D.N.Y. 2008)...............................................................18
In re Grafton Partners, L.P.
, 321 B.R. 527 (B.A.P. 9th Cir. 2005)........................17
John Hancock Mut. Life Ins. Co. v. Harris Trust & Sav. Bank
,510 U.S. 86 (1993).........................................................................................15
Case: 10-2378 Document: 338 Page: 3 10/11/2010 121939 26
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