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Case 12-27488

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UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: PEREGRINE FINANCIAL GROUP, INC., Debtor. ) ) ) ) ) ) ) ) Chapter 7 Case No. 12-27488 Honorable Judge Carol A. Doyle Hearing Date: November 14, 2012 Hearing Time: 10:00 a.m.

NOTICE OF MOTION PLEASE TAKE NOTICE that on November 14, 2012 at 10:00 a.m., the undersigned shall appear before the Honorable Judge Carol A. Doyle, in Courtroom 742, 219 South Dearborn Street, Chicago, Illinois, and then and there present the TRUSTEE’S SUPPLEMENTAL MOTION FOR ENTRY OF AN ORDER APPROVING TRANSFERS AND INTERIM DISTRIBUTIONS TO CERTAIN COMMODITY CUSTOMERS OF THE DEBTOR, at which time you may appear if you deem fit.

Dated: November 5, 2012

Respectfully submitted, Ira Bodenstein, not personally, but as chapter 7 trustee for the estate of Peregrine Financial Group, Inc. By: /s/ Kimberly Bacher One of his attorneys

Robert M. Fishman (#3124316) Salvatore Barbatano (#0109681) Kimberly Bacher (#6285677) Shaw Fishman Glantz & Towbin LLC 321 North Clark Street Suite 800 Chicago, IL 60654

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CERTIFICATE OF SERVICE Kimberly Bacher certifies that she caused to be served a true copy of the above and foregoing NOTICE OF MOTION and TRUSTEE’S SUPPLEMENTAL MOTION FOR ENTRY OF AN ORDER APPROVING TRANSFERS AND INTERIM DISTRIBUTIONS TO CERTAIN COMMODITY CUSTOMERS OF THE DEBTOR upon the attached Electronic Mail Notice List through the ECF System and on the attached Service List in the manner so indicated on this 5th day of November, 2012. /s/ Kimberly Bacher Mailing Information for Case 12-27488 Electronic Mail Notice List
The following is the list of parties who are currently on the list to receive email notice/service for this case.                                    Kimberly A Bacher kbacher@shawgussis.com, bharrington@shawgussis.com Salvatore A Barbatano sbarbatano@shawgussis.com, jhampton@shawgussis.com Lawrence M. Benjamin lbenjamin@ngelaw.com, rwills@ngelaw.com Stephen T. Bobo sbobo@reedsmith.com Ira Bodenstein iratrustee@shawgussis.com, IL29@ecfcbis.com;sdelamora@shawgussis.com Ira Bodenstein ibodenstein@shawgussis.com, sdelamora@shawgussis.com David E Cohen dcohen@fishercohen.com Brooke E Conner bconner@vedderprice.com, ecfdocket@vedderprice.com;ecarlson@vedderprice.com Michael M. Eidelman meidelman@vedderprice.com, ecfdocket@vedderprice.com Robert M Fishman rfishman@shawgussis.com Geoffrey S. Goodman ggoodman@foley.com, egreen@foley.com;khall@foley.com Ava Gould agould@cftc.gov Joshua M Grenard jgrenard@mayerbrown.com, courtnotification@mayerbrown.com Allen J Guon aguon@shawgussis.com, sdelamora@shawgussis.com John W Guzzardo jguzzardo@shawgussis.com, mcarter@shawgussis.com David Paul Holtkamp dholtkamp@wfactorlaw.com, nb@wfactorlaw.com Stephanie K. Hor-Chen shor@vedderprice.com, ecfdocket@vedderprice.com Kevin M Hyde khyde@shawgussis.com, jhampton@shawgussis.com Thomas S Kiriakos tkiriakos@mayerbrown.com, Courtnotification@mayerbrown.com James C. Koutoulas jk@typhoncap.com Vincent E. Lazar vlazar@jenner.com, lyap@jenner.com;mmatlock@jenner.com;docketing@jenner.com Randall M Lending rlending@vedderprice.com, trobinson@vedderprice.com;ecfdocket@vedderprice.com Michael C. Moody mmoody@orourkeandmoody.com, firm@orourkeandmoody.com,morourke@orourkeandmoody.com Jennifer M. Muchoney jmuchoney@pfgbest.com Michael J O'Rourke morourke@okmlaw.com Mark L Radtke mradtke@shawgussis.com, bharrington@shawgussis.com Rene S Roupinian RSR@outtengolden.com Richard A. Saldinger rsaldinger@shawgussis.com Jessica M Scheller jscheller@shawgussis.com, kdevries@shawgussis.com Sean T Scott stscott@mayerbrown.com Scott A Semenek scott.semenek@faegrebd.com, melanie.senesac@faegrebd.com Anne W Stukes astukes@cftc.gov William W Thorsness wthorsness@vedderprice.com, ecfdocket@vedderprice.com John Edward Waters john.waters@iowa.gov Thomas C. Wolford twolford@ngelaw.com

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Via Electronic Mail Only Where Email Address Provided and U.S. Mail John B. Connor John B. Connor, P.L.C. 1033 N. Fairfax St., Ste. 310 Alexandria, VA 22314 jack@johnbconnor.com Outten & Golden LLP Attn: Jack Raisner/Rene Roupinian 3 Park Ave., 29th Floor New York, NY 10016
rsr@outtengolden.com jar@outtengolden.com

CRT Special Investments LLC Attn: Joseph Sarachek 262 Harbor Drive Stamford, CT 06902 Gaivesville Coins, Inc. c/o Stephanie C. Lieb, Esq. 101 E. Kennedy Blvd., Ste. 2700 Tampa, FL 33602 rcolton@trenam.com slieb@trenam.com Joseph M. Russell JP Morgan Chase Bank NA 10 S. Dearborn Street Chicago, IL 60603 Joe.russell@jpmchase.com Gilbert B. Weisman Becket & Lee LLP 16 General Warren Blvd. Malvern, PA 19355 Notices@becket-lee.com

Stephen Mertz Michael Stewart Faegre Baker Daniels LLP 90 South 7th St., Ste. 2200 Minneapolis, MN 55402 stephen.mertz@faegrebd.com Michael.stewart@faegrebd.com William L. Wallander John Paul K. Napier Vinson & Elkins L.L.P. 2001 Ross Avenue, Ste. 3700 Dallas, TX 75201 jnapier@velaw.com bwallander@velaw.com Lazonia Clark Chase Paymentech Solutions, LLC 14221 Dallas Parkway Building II Dallas, TX 75254-2942 Lazonia.clark@chasepaymentech.com Andrea M. Momnie Philip J. Hendel Hendel & Collins, P.C. 101 State Street Springfield, MA 01103 amomnie@hendelcollins.com Via Email and U.S. Mail Mark V. Silverio Silverio & Hall 255 8th Street South Naples, Florida 34102-6123 msilverio@silveriohall.com

Alicia Martin Attn: Steven R. Lehr, Esq. Steven R. Lehr, P.C. 33 Clinton Road, Ste. 100 West Caldwell, NJ 07006 slehr@lehrlaw.com

Via Electronic Mail Rosemary Hollinger rhollinger@cftc.gov Robert W. Wasserman rwasserman@cftc.gov Scott Williamson swilliamson@cftc.gov Pat DiMaria pdimaria@pfgbest.com Vivian Drohan vdrohan@dlkny.com rickmedley@aol.com roythompson@comcast.net mark.sherrill@sutherland.com Larry Lefoldt mllefoldt@lefoldt.com

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UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: PEREGRINE FINANCIAL GROUP, INC., ) ) ) ) ) ) ) ) Chapter 7 Case No. 12-27488 Honorable Judge Carol A. Doyle Hearing Date: November 14, 2012 Hearing Time: 10:00 a.m.

Debtor.

TRUSTEE’S SUPPLEMENTAL MOTION FOR ENTRY OF AN ORDER APPROVING TRANSFERS AND INTERIM DISTRIBUTIONS TO CERTAIN COMMODITY CUSTOMERS OF THE DEBTOR Pursuant to sections 105(a), 764 and 766 of title 11 of the United States Code (the “Bankruptcy Code”) and 17 C.F.R. §§ 190.01 through 190.10, Ira Bodenstein, not personally, but as chapter 7 trustee (the “Trustee”) for the estate of Peregrine Financial Group, Inc. d/b/a PFG Best (the “Debtor”), respectfully requests (the “Motion”) that this Court enter an order authorizing the Trustee to transfer those futures accounts: (1) with Treasury securities associated therewith and the corresponding thirty (30%) or forty (40%) percent Interim Distribution Amount (defined herein), as applicable (collectively, the “TS Accounts”), to Vision Financial Markets LLC (“Vision”) and (2) belonging to The Matterhorn Fund, LLC and The McKinley Fund, LLC and the corresponding thirty (30%) percent Interim Distribution Amount to the Receiver (defined below), as applicable (collectively, the “Fund Accounts” and together with the TS Accounts, the “Accounts”). In support of the Motion, the Trustee respectfully states as follows: 1. On July 10, 2012 (the “Filing Date”), the Debtor filed a voluntary case under

Chapter 7 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”), thereby commencing the above-entitled case.

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2.

On July 11, 2012, the Trustee was appointed as the successor Chapter 7 Trustee of

the Debtor by the U.S. Trustee, has accepted his appointment, and is acting, duly qualified, as Trustee of the Debtor. 3. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and

1334 and Internal Operating Procedure 15(a) of the United States District Court for the Northern District of Illinois. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. This matter is a “core proceeding” within the meaning of 28 U.S.C. §§ 157(b)(2)(A) and (O). The statutory predicates for the relief sought herein are §§ 105(a), 764(a), 766(c) and 766(f) of the Bankruptcy Code, Federal Rule of Bankruptcy Procedure 9014 and 17 C.F.R. §§ 190 et seq. (the “Part 190 Rules”). 4. On September 5, 2012, the Trustee filed a Motion for an Order Approving (I)

Transfers and Interim Distributions to Certain Commodity Customers of the Debtor, and (II) Procedures for Soliciting Offers from Futures Commission Merchants to Receive Such Transfers on Account of Commodity Customers (the “Bulk Transfer Motion”). 5. On October 5, 2012, this Court entered the Order Approving Transfer of Funds

and Accounts of Certain Commodity Customers of the Debtor to Vision Financial Markets LLC (the “Transfer Order”) granting certain relief requested in the Bulk Transfer Motion. 6. Pursuant to Paragraph 1 the Transfer Order, the Trustee was authorized to, inter

alia, make a bulk transfer (the “Bulk Transfer”) to Vision of approximately $123,000,000 to or for the benefit of the Debtor’s 4d, delivery and 30.7 futures customers as follows: (i) with respect to 4d and delivery customers, the Trustee was authorized to transfer cash equal to approximately thirty percent (30%) of the 4d and delivery customers’ account balances, and (ii) with respect to 30.7 customers, the Trustee was authorized to transfer cash equal to

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approximately forty percent (40%) of the 30.7 customers’ account balances. As a result of the Bulk Transfer, each 4d, delivery and 30.7 futures customers received a thirty (30%) or forty (40%) percent interim distribution (the “Interim Distribution Amount”). 7. Paragraph 1 of the Transfer Order also provides in relevant part:

Additionally, the Motion and this Order does not address and the Bulk Transfer does not include those Futures Accounts that have Specifically Identifiable Property (“SIP”) or Treasury securities associated with them (“Other Accounts”). The Trustee will file a separate motion seeking authority to transfer the Other Accounts and corresponding cash, Treasury securities or other non-cash property to Vision at such time as the Trustee and the Holder (defined below) have addressed the SIP or liquidated the applicable Treasury securities (for which Vision will pay no additional consideration).

8.

This Motion constitutes the “separate motion” respecting the TS Accounts with

Treasury securities associated with them referenced in Paragraph 1 of the Transfer Order. 9. As of the date of the filing of the Bulk Transfer Motion, the TS Accounts were

not liquidated. However, since the entry of the Transfer Order, the Trustee, with the assistance of Jefferey Bache LLC, has liquidated the treasury securities associated with the TS Accounts. The aggregate amount of customer funds that are included in the TS Accounts total approximately $4,650,000.00.1 10. As the Transfer Order did not provide for the transfer of the TS Accounts or the

applicable Interim Distribution Amount to Vision absent further court order, the Trustee requests authority to do so at this time. 11. Additionally, the Trustee requests authority to transfer the Fund Accounts as set

forth below. The Fund Accounts were not transferred to Vision because they could not be transferred as a result of an order entered in the United States District Court for the Middle

1 As discussed herein, the amount transferred to Vision will be between thirty (30%) and forty (40%) percent of this amount based on the type of customer account.

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District of Florida Orlando Division (the “Florida Court”) requiring that the Fund Accounts be frozen (the “Florida Freeze Order”). The Florida Court has since appointed Mark Silverio as receiver for the entities that own and control the Fund Accounts (the “Receiver”). If the Fund Accounts were not subject to the Florida Freeze Order, the Fund Accounts would have been transferred to Vision pursuant to the Transfer Order. However, as the Fund Accounts are now under the control of the Receiver, the Trustee requests authority to transfer the Fund Accounts to the Receiver. 12. Pursuant to the Part 190 Rules, a trustee liquidating a commodity broker, such as

the Debtor, has a duty to make immediate and to use best efforts to effect the transfer of open customer contracts and equity. See 17 C.F.R. § 190.02(e)(1), referencing 17 C.F.R. § 190.06(e) and (f). The Trustee also has a duty to allocate and distribute customer property ratably to Futures Customers on the basis of their net equity claims. See 17 C.F.R. § 190.08; 11 U.S.C. § 766(h). 13. The transfer of the Accounts and the corresponding Interim Distribution Amount,

as provided herein, may also be approved as “partial distribution(s)” made “pursuant to a preliminary plan of distribution approved by the court” under Section 190.08(d)(5) of the Part 190 Rules. See 17 C.F.R. § 190.08(d)(5). 14. In addition, Section 105(a) of the Bankruptcy Code authorizes the Court to “issue

any order, process, or judgment that is necessary or appropriate to carry out of the provisions of this title.” 11 U.S.C. § 105(a). 15. The Trustee submits that the transfer of the Accounts and the corresponding

Interim Distribution Amount to Vision and the Receiver, as applicable, proposed herein is fair and reasonable, consistent with the provisions of the Transfer Order, the Bankruptcy Code and

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Part 190 Rules, and would help mitigate the harm suffered by the holders of the Accounts by providing them with access to some portion of their assets. WHEREFORE, the Trustee respectively requests that this Court enter an Order, in the form attached hereto, granting the relief requested herein and such other and further relief as is just and proper under the circumstances. Respectfully submitted, Ira Bodenstein, not personally, but as chapter 7 trustee for the estate of Peregrine Financial Group, Inc. Dated: November 5, 2012 Robert M. Fishman (#3124316) Salvatore Barbatano (#0109681) Kimberly Bacher (#6285677) Shaw Fishman Glantz & Towbin LLC 321 North Clark Street Suite 800 Chicago, IL 60654 Phone: (312) 541-0151 Fax: (312) 980-3888 By: /s/ Kimberly Bacher One of his attorneys

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Case 12-27488 Doc 274-1 Filed 11/05/12 Entered 11/05/12 11:27:48 Desc Proposed Order Approving Transfers and Interim Distributions to Certain Commodit Page 1 of 1

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