Trondheim - Doc 19 Transcript

Case 1:13-cv-04668-RPP Document 19
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Argument UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x TRONDHEIM CAPITAL PARTNERS, L.P., et al, Plaintiff, v. SUNTECH POWER HOLDINGS CO., LTD., et al, Defendant. ------------------------------x MARCUS DUGAW, JESSICA DUGAW v. SUNTECH POWER HOLDINGS COMPANY, INC. --------------------------------x New York, New York September 12, 2013 10:05 A.M. Before: HON. ROBERT P. PATTERSON, JR., District Judge APPEARANCES TEITELBAUM & BASKIN Attorneys for Plaintiff BY: JAY TEITELBAUM MINTZ LEVIN COHN FERRIS GLOVSKY & POPEO, P.C. Attorneys for Defendant BY: GILBERT ALAN SAMBERG DAVID LOUIS BARRES
13 CV 04668
13 CV 05608
SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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(Case called; in open court) THE DEPUTY CLERK: THE COURT: All rise.
Please be seated.
Trondheim Capital Partners vs. Suntech Power Holdings, and Dugaw vs. Suntech Power Holdings. THE COURT: MR. DUGAW: THE COURT: Trondheim? MR. TEITELBAUM: Good morning, your Honor. Jay Is plaintiff, Mr. Dugaw, on the phone? Yes, your Honor. And for Trondheim, who is here for
Teitelbaum for both plaintiffs Trondheim and Mr. Meixler. THE COURT: All right. And for the defense?
MR. SAMBERG:
Your Honor, Gilbert Samberg for And, David Barres of my
defendant, Suntech Power Holdings. firm, as well. THE COURT:
Mr. Barres, is that right?
Samberg and
MR. SAMBERG: THE COURT:
Yes, your Honor. Just want to be sure I'm
All right.
reading the names and the pronunciation is right. Well, this is a motion for summary judgment. I'll hear from the plaintiff. MR. TEITELBAUM: Thank you, your Honor.
Your Honor, I'll address the Court from the podium? THE COURT: Mr. Teitelbaum.
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MR. TEITELBAUM:
Thank you. Jay Teitelbaum, for
Again, good morning, your Honor.
the plaintiffs, Trondheim Capital Partners and Mr. Michael Meixler. Your Honor, just briefly, the procedural history of this case is pretty straightforward. In June of this year, my
clients, Trondheim and Mr. Meixler, commenced an action in New York State Supreme Court pursuant to New York CPLR 3213 which is the procedure for commencing an action by a motion for summary judgment in lieu of a complaint. We allege, very simply, your Honor, that there was a sum certain due on a bond indenture which matured on March 15, 2013. We, through the supporting affidavits of my clients,
allege that Trondheim is owed the face amount of $500,000, plus interest, which was due on March 15 and thereafter. Mr. Meixler alleged in his, or supported in his supporting affidavit, the sum of $50,000 face amount on the indenture, plus the interest. Suntech caused the action to be removed to this court on July, 8, I believe it was. And then, separately, Mr. Dugaw
who is on the phone, commenced an action on July 18, essentially on the same facts as ours. is less. But his dollar amount
And I'm just raising that only because Mr. Dugaw is
on the phone and, hopefully, to save a little bit of time for the Court. But I believe the facts are identical, the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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underlying documents are identical. So that brings us to today's hearing. Suntech filed
an opposition to the motion for summary judgment in lieu of complaint and, essentially, your Honor, the objection is not on the merits. In other words, not a defense to payment. In
point of fact, the objection is procedural. The first objection is the claim that the 3213 process under the CPLR was improper, because of various reasons I'll touch upon. And the second is essentially the plaintiffs are
strangers -- and that's a quote from their papers -- with no standing to enforce the payment terms of the indenture. And
it's our position, based on the undisputed facts, that they are wrong on all counts, and that we have the absolute right to enforce the payment of the obligation which matured. We're not
talking here, your Honor, about some covenant or some difficult breach that is hard to figure out. We're talking about That date happened.
March 15, 2013 was the maturity date. Payment has not been made.
The note is matured.
Those facts, in fact, are not in dispute, your Honor. The affidavit submitted in opposition by Mr. King, who is the, I guess the CEO of Suntech, admits as much in various paragraphs 3 and 20 of his affidavit. They acknowledge that They
Suntech borrowed $575 million from bondholders. acknowledge there is an indenture. maturity date on March 15.
They acknowledge there is a
And they acknowledge that payment
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was not made. They have a very long list of excuses as to why payment was not made; business economy is bad, they have been sued by a lot of people, they have had issues with their suppliers. payment. The note, the indenture, are very clear. pay on March 15 if you can, if you want. March 15th. Doesn't say But those are excuses, they are not defenses to
It says you pay on
So we're not talking about a covenant breach,
we're talking about something very, very straightforward, which is the occurrence of the maturity date. The indenture, your Honor, is not in dispute. annexed to everybody's papers. dispute. It is
The maturity date is not in
It is annexed to everybody's papers. The explicit terms of the indenture called for the
payment on March 15. before this Court.
There is no dispute that we're properly
New York law applies, although -- even
though, I should say, Suntech is a China-formed entity, China-based entity formed under the Cayman Island law. The
indenture specifically provides that the laws of the State of New York apply. And the jurisdiction for any disputes relating
thereto are properly before courts in the Southern District of New York, whether they are state or federal courts. Your Honor, with respect to the first main point I think raised in the opposition, which is the 3213 issue, there SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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is two pieces to that that I would like to very briefly address. First, is we just think that the defendant is just wrong. In other words, what they have tried to do -- and I
think the Court probably has a half of a tree at this point of all of the documents that were photocopied and submitted. say, look, this is a tremendously complicated transaction. There were tranches, and there were participations, and there were registration rights agreements. There are covenants. They
There is all of this stuff, all this noise going on in the background. And that may be true. But we're not suing on any
of those issues.
We're suing on a sum certain, based upon an We're not
absolute obligation to pay on the maturity date. saying you breached the covenant. missed any EBITDA covenant.
We are not saying you have
We're not saying you missed some We are saying you promised to That is the quintessential
covenant that was negotiated in. pay on the 15th, and you didn't. 3213 motion.
And the Court of Appeals of the State of New York has actually said that. Honor. case. And we cite the case in our papers, your
The case is Weissman v. Sinorm, 1996 Court of Appeals And it's a simple test, where the instrument requires
something in addition to the defendant's explicit promise to pay a sum of money, CPLR 3213 is unavailable. Put another way, a document comes within CPLR 3213 if SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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a prima facia case would be made out by the instrument and a failure to make the payments called for by its terms. that's simply and precisely what we have here. But we -- and it's -- I apologize for the little bit of a digression into 3213 because, frankly, under Valley National Bank, which is the Southern District case from 2010, the Court in that case held that once a case has been removed from state court, the federal court takes it in the posture that it is. So the 3213 motion, and any pleadings in the state And
court, are essentially treated as a summons and a complaint. And the Court then proceeds, under Rule 56 of the Federal Rules of Civil Procedure, for a motion for summary judgment. So where that leads us, your Honor is, on a motion for summary judgment on a note, the test is very straightforward, as set forth in that case and in many, many other cases, which is simply the party suing on a note needs to establish the absence of a genuine issue as to execution and a default. have got that in spades here by the admissions of the defendants in their affidavits. They don't dispute they We
borrowed the money, they don't dispute they are a party to the indenture, they don't dispute that they have not paid the indenture as required on the stated maturity date. So that then brings us to, really, the second issue and perhaps the more interesting and important one, which is the objection that we're strangers. The essential argument
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here is not that Suntech doesn't have an obligation to pay, it is we're not sure we need to pay you, Mr. Plaintiff, here, Trondheim, Mr. Meixler, and even Mr. Dugaw. But what they do here is they take what is essentially a very simple issue and make it complicated by referring to the registration rights agreements and the various other documents and the tranches and the numerous parties that play a role in these transactions, these indentures. However, the simple admissions are we have the note, we have a nonpayment. But what they then do in their
opposition, is they assert there is only one Holder of this $575 million indenture. And that Holder is CEDE & Co. A
nominee or affiliate of DTCC, Depository Trust Clearing Company. And they allege that in their papers. And they
submit an affidavit and documents from Wilmington Trust, the trustee under the indenture that says, yup, CEDE & Co. is the only Holder. And they assert that that is dispositive of the
fact that we are strangers and we have no standing. They miss the point by intentionally, I would submit, failing to identify and cite relevant provisions of the indenture, and the registration rights agreement. very selective in the clauses that they pick. Now, what they say here is, look, we have identified CEDE & Co. as the Holder. And through DTCC and Mr. Hemsley, an They are
affidavit which is at ECF docket number 9, they submit a list SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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of so-called participants.
Those are parties that are
registered, that are identified as Holders of securities. Because part of the complexity -- and I'll acknowledge this -- is my clients, and I believe Mr. Dugaw, I don't want to speak for him, but I believe -- so hold these interests as beneficial owners and so-called street name. the great unwashed in a lot of this. They are sort of
So I can appreciate the
initial inclination to say who are you and why are you here and why are you bothering us for payment. But when you look at the
documents, there is a process that is contemplated therein that provides for us to be here, and provides for all of us to enforce our rights. So the defendant here recognizes that there are certain participants. And those participants include, First
Clearing, Merrill Lynch, TD Ameritrade with respect to Mr. Dugaw. And they are identified on a schedule. And they're
participants who acknowledge, or acknowledge to hold securities, the notes, in this indenture. Mr. Hemsley's affidavit at ECF number 9. So what do they do, your Honor. Well, what they do, And, again, that's
is they quote at pages three and four of their opposition from Section 2.15 of the indenture to say that the depository participants shall have no rights under the indenture with respect to any global security, or under the securities. And
the depository may be treated by the company, the trustee, and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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the securities agent, and any agent of the company -THE COURT: Where are you reading from? Section -- I apologize. It is
MR. TEITELBAUM: section 2.15. THE COURT:
I have that. Second paragraph, Members.
MR. TEITELBAUM: THE COURT:
All right. Okay. Their quote, your Honor, stops And their
MR. TEITELBAUM:
about midway through after the word procedures.
quote at pages three through four of their opposition actually bolds some of the language, if you'll note. THE COURT: procedures? MR. TEITELBAUM: Correct. It bolds that. And there After the words regular operating
is no ellipsis in their papers.
They failed to go on and quote And
the rest of that paragraph, which expressly provides that.
I wouldn't burden the record that your Honor has it in front of him, but it provides for a proxy procedure whereby other parties can be recognized as the Holders. Similarly, your Honor, they don't quote a little further down that page at Section 2.15E, as in Edward, the quote: That the Holder, capital H Holder, and we have
identified that already as CEDE & Co., may grant proxies and otherwise authorize any person, including participants and persons that may hold interests through participants to take SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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any action which a Holder is entitled to take under this indenture. That paragraph doesn't even appear in their papers. Where is that paragraph? Paragraph E on page 14 of the
THE COURT:
MR. TEITELBAUM: indenture, Section 2.15. THE COURT:
I've got it. That paragraph, your Honor, together
MR. TEITELBAUM:
with the definition of Holder as set forth in the registration rights agreement, and the registration rights agreement, your Honor, is also attached to their papers. But the definition of
Holder in that agreement is as follows: The company agrees with the initial purchaser; one, for their benefit as initial purchasers, and two -THE COURT: Let me find where you are. Registration rights agreement, your
MR. TEITELBAUM: Honor, page 1. THE CLERK:
What agreement is that? I can hand it to the Court.
No, I would like to find it in the papers,
so I can reference it. MR. TEITELBAUM: It is at the back of the indenture, It is
your Honor, in the -- it's at the end of the indenture. an exhibit to the indenture. THE COURT: Exhibit A?
MR. TEITELBAUM:
It is, I believe, the first exhibit
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after the indenture; yes. THE COURT: And where are you reading in it? It is dated -- just so we're on the
MR. TEITELBAUM:
same document and there is no confusion -- it is dated March 17, 2008, Registration Rights Agreement, third paragraph on the first page. THE COURT: Okay, just a second. I have it here.
MR. TEITELBAUM: THE COURT: Yes.
Do you have it, your Honor?
Exhibit 4.5. On that first page, your Honor, third
MR. TEITELBAUM: full paragraph.
I don't -- I wouldn't burden the record with It starts with, the company agrees.
reading the definition. THE COURT:
Yes. And it ends with as follows. There
MR. TEITELBAUM:
is a definition of Holders. the initial purchasers.
And the definition of Holders is
And for the benefit of the beneficial
owners, including the initial purchasers, from time to time, of the covered securities. Holder. Each of the foregoing, a capital H
Again, nowhere in their papers, your Honor do they They simply refer to the definition of
make reference to this.
Holders in the indenture, which is limited to CD & Co., as the only Holder on the Wilmington Trust registration documents. Your Honor, the defendants then go on to cite a couple SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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of cases in their brief, Springwell and Macai for the proposition that beneficial holders lack standing. Those are
two appellate division cases from the State of New York. So the problems with the arguments that the defendants have proposed to the Court here simply are by quoting only a section or part of 2.15A, they have failed to advise the Court of the remaining provisions relevant to the determination of whether a beneficial Holder has standing, namely the carve-out of Section 2.15A and Section 2.15E. Section 2.16C. Your Honor, if you like, I will give the Court obviously a second there to get to that. THE COURT: Repeat the section? 2.16, C, as in Charlie. You had two before They also fail to note in
MR. TEITELBAUM: THE COURT: that. MR. TEITELBAUM: 2.15, E, as in Edward. indenture. indenture.
The one before that.
We had Sections 2.15A, as in apple,
And then we have, now, 2.16C of the
And that appears, your Honor, on page 15 of the And it's at the very bottom, the last paragraph. All right. And that paragraph, your Honor, it --
THE COURT:
MR. TEITELBAUM:
it is very simple, which is it just imposes an obligation by the word shall. It says: The registrar, which we know is
Wilmington Trust, shall retain copies of all letters, notices, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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and other written communications received pursuant to Section 2.15, or this Section 2.16. So to the extent that there is a written notification of a proxy provided to the company, they are required to make note of that on the books and records of the company. THE COURT: Who is they there? The they in that case, your Honor, is
MR. TEITELBAUM:
Wilmington Trust, which is the registrar as identified by the defendants responsible for maintaining the record of, quote, Holders. So the third prong of the error of the arguments by the defendants here, is there is the Second Circuit decision which we've cited, the Applestein v. Buenos Aires case which, on very, very similar facts, first Judge Griesa made a holding in that case -- and then it was affirmed on appeal -- where a bondholder, a beneficial bondholder, one of -- a client very similar to mine -- commenced an action following the maturity of the indenture. After the action was commenced, the
plaintiff obtained, from CD & Co., an acknowledgment, a proxy, recognizing that party as a Holder, and authorizing that party to prosecute the action to enforce the maturity of the note. A lot of noise went back and forth between the parties as to whether this was appropriate. And then Judge -- the
district court said the fact is that these beneficial owners are entitled to sue. If there are some formalities that have
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to be carried out, they can be easily carried out, and that's that. That solves the issue of standing. And I'm quoting from
the Second Circuit decision which quoted the district court. And this is the Applestein decision at 415 F.3d 242. The
Circuit then went on to hold specifically that the beneficial owner who obtains a proxy, even after the commencement of the action, has standing. No ifs, ands, or buts. The Court then
rejected the case relied upon by the defendants in their brief, the Macai Shields case, which is the support for the cases that the defendants have cited. In other words, the defendants cited the Springwell decision. Springwell, from the appellate division, which The Circuit rejected
itself relied upon the Macai decision.
the Macai decision on the basis that neither Springwell nor Macai involved a plaintiff who had obtained a proxy. just, quote: They were
Beneficial Holders out there essentially unknown
to the company which had executed the indenture. The Court distinguished them on the critical fact that we have in our case, which is when you have the proxy, you have got a Holder standing. So, your Honor, in response to the objection, what my clients did -- and I -- I'm not going to speak for Mr. Dugaw, I can only speak to what the documents in the record reflect. What my clients did, was they contacted their brokers, First Clearing and Merrill Lynch, to identify participants, and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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requested that they be identified as the Holders for purposes of prosecuting the action. I can't tell you, your Honor, how many hours we spent on the phone going back and forth. our reply papers. And we identified this in
And we have said, look, we sent these And
letters out, and we're just waiting for them to come back. the reply papers were timely filed on the 15th.
We then spent
the better part of 45 days going back and forth with DTCC and CEDE & Co. and, therefore, your Honor, in the submission we made on August 28, we obtained the letters. are could not be more clear. First, your Honor, the request made to CEDE & Co., the Holder, under the medallion stamp of Merrill Lynch and First Clearing from my respective clients, specifically identified the client, Trondheim Capital Partners and Mr. Meixler, specifically identified the fact they hold 500,000 and 50,000 respectively of notes, specifically identified the fact that an action was commenced and pending in this court, specifically identified the fact that notes had matured and that they were seeking status as a Holder to prosecute the actions. We have two letters back to us from CEDE & Co. which we have attached and are part of the record as ECF docket number 14. And the letters are identical. And the critical And the letters
part of the letter is as follows, it is the third paragraph: In accordance with instructions -SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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And, by the way, I apologize.
The letter is addressed
to Suntech Power Holdings, so that they are advised who the parties are that are being recognized as Holders. one for Trondheim, one for Mr. Meixler states: Each letter,
In accordance
with instructions received from Participants, on behalf of its customer, we hereby recognize Michael Meixler as the Holder of the notes under the indenture, and authorize Michael Meixler to prosecute the Action. notes. An identical letter is submitted for Trondheim. I believe an identical letter has been submitted for Dugaw, as well, as part of the papers which were filed with the Court. So, your Honor, the simple fact is that we fall under Applestein here and the Second Circuit's ruling that, yes, while a beneficial Holder may not be recognized by a party under an indenture as a Holder initially, there are steps contemplated in the registration agreement in the indenture and in normal process of commercial transactions that allow this party to be recognized. We have jumped through the hoops. We have jumped And enforce the payment terms of the
through the procedural hoops that have been demanded of us of Suntech. We have properly commenced the action. And we stand
here, your Honor, as a Holder.
And I have not -- respectfully,
your Honor, I have not seen a single defense to payment here. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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So what we're arguing over, potentially, is do we have standing. And under Applestein, there is no dispute that we
have standing. Your Honor, what we have got is Suntech based in China, a Cayman Islands company, came to New York in or about 2008, borrowed $575 million, promised to repay that on March 15, 2013, failed to do so. matter. Failed to do so. My clients submitted to Suntech, and to this Court, not only the proxy letters, but the account statements that demonstrate that they actually acquired these which, under the -- it's I think it is ETEVOB, which we have cited in our papers, as well. It's ETEVOB v. Argentina 471 F Supp.2d. 432. For whatever reason, doesn't
In that case, the Southern District of New York held that plaintiffs have adequately demonstrated through their account statements that owned the beneficial interest of various dates in 2003 and 2004. statements. Your Honor, to digress a half point, defendants said, oh, my gosh, the account statements have redactions. I have the original account statements if the Court wants to see them. I am representing to the Court, as an So we have submitted those account
officer of the court, that the redactions were for transactions that my clients did unrelated to this matter, and for communications between them and their broker which have nothing SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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to do with this case. I got them via e-mail.
That was the reason for the redaction. There was also communication to me in
that e-mail, and I redacted out the attorney/client communication. I have the originals for an in-camera inspection, I have nothing to hide on that. about that, it's a non-issue. They have made a lot of noise The account statements reflect
the 500,000 the 50,000-dollar positions of the clients. So, again, if the Court wants those, I'm happy to provide them. Your Honor, there is no material issue of fact in dispute here. The money was borrowed. The money is owed. I The
money has not been repaid.
We're a Holder, your Honor.
would request, respectfully, entry of judgment in favor of the plaintiffs for the face amount, plus the allowed interest as expressly provided for under the indenture through any date of judgment as entered and, thereafter, the judgment rate of interest from thereafter. Your Honor, if you have any questions, I would be happy to try to answer them, otherwise I'll cede the podium. THE COURT: There is a different rate of interest in
the state courts and federal courts, and you're requesting the federal court? MR. TEITELBAUM: THE COURT: Yes, sir.
All right.
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Mr. Dugaw, do you have any -MR. DUGAW: Your Honor, as Mr. Trondheim mentioned,
the facts of my case are materially identical to what he just laid out. I am in complete agreement with everything he just I'd simply replace, in the
stated as it pertains to my case.
case of Mr. Trondheim's clients, Merrill Lynch and First Clearing with TD Ameritrade, and replace the amounts he mentioned with $10,000 in my case. identical. The only additional nuance in my case versus Mr. Trondheim's clients, is the defendants have asserted that me, Marcus Dugaw, do not have standing to sue, because I haven't demonstrated an interest in the notes based upon the fact that they are held in a brokerage account at TD Ameritrade that's in my wife, Jessica's, name. property state. property assets. California is a domicile community And then the facts are
The securities were acquired with community Under community property in California, both
spouses have an equal interest in the management of all community property throughout their marriage. Unlike in a
marital property state like New York, one spouse's interest in the other spouse's marital property is only asserted at dissolution of marriage. That is not the case in California.
I have laid out the relevant statutes in my reply affidavit. California Family Code Sections 760 and 1100 spell
out the community property laws. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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I have obtained a substantially identical document from CD & Co. recognizing my wife, Jessica, as a Holder of the securities and granting authority to sue based on the nonpayment Mr. Trondheim already described. Beyond that, if your Honor has any questions, I'm happy to answer. But as I mentioned, the facts and
circumstances of my case are materially identical to that of Mr. Trondheim's clients. THE COURT: Defense? THE COURT: MR. DUGAW: THE COURT: Are you still on the line? Yes, your Honor. Okay. Thank you, your Honor. Gilbert Samberg, All right. Thank you.
MR. SAMBERG:
Mintz Levin for the defendant, Suntech Power Holdings. If you'll forgive me, your Honor, my voice is a little played out already this morning. Gilbert Samberg from Mintz Levin on behalf of the defendant, Suntech Power Holdings. THE COURT: Yes. Your Honor, if you don't mind, I'm not
MR. SAMBERG:
going to rehash from the beginning all of the briefing that has gone into this matter, it's all before you and your clerks for your review. I would like to focus on a couple of points, though, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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that make it simply impossible for this Court to grant summary judgment in lieu of complaint. Before Suntech has had an
opportunity to explore the case, and certainly before discovery, in a federal court in New York. And I to have say.
I have to say that it is a mystery to me, as a lawyer, as to why the plaintiffs would pursue their claims in what amounts to -- and I think Mr. Teitelbaum has amply demonstrated this to the Court -- what amounts to a complex securities litigation, and to do so by way of a motion, a state law process called a motion for summary judgment in lieu of a complaint. And this creates enormous issues for the Court and
for the plaintiffs themselves, both evidentiary issues and substantive issues. And I think at the end of today, we're
going to find out whether this defendant is going to be given the opportunity to defend itself in this federal court in New York. Now, before I get into the details of why I say it creates enormous, enormous difficulties, enormous issues of various kinds that make summary judgment impossible at this stage. I would like to digress for a moment in order to give If I may
the Court some context regarding the bigger picture. take a moment to do that.
And in that regard, what I would like to do is just for purposes of illustration, provide to Mr. Teitelbaum copies of some news articles, recent news articles, that I would like SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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to hand up to the Court, as well, with your permission, your Honor. THE COURT: All right. Your Honor, just for the record,
MR. TEITELBAUM:
objection to whatever these newspaper articles are. THE COURT: articles. MR. SAMBERG: So I would like to place these And it is true that they I understand. They are just news
particular claimants in context.
claim beneficial interest in connection with an issue of convertible senior notes by Suntech Power Holdings in the amount of $575 million. These claimants make claims with
regard to, respectively, $500,000 by the Trondheim company, and I'll go into the details of who the Trondheim company is in a moment; $50,000 by a Mr. Meixler; and $10,000 by Marcus Dugaw and Jessica Dugaw. So you can see, it is a -- what you have
before the Court here today, is a very small minority position making claims. And I should point out that these claims are unique in that out of $575 million worth of convertible senior notes that were issued by Suntech, these are the only claims of this sort that are asserted by purported investors in those notes. Now, this update concerns what's happening elsewhere. And I should point out that this $575 million is the largest single debt, by far, that Suntech has. And, yes, it is true,
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as your Honor knows, that Suntech did default on payment of these notes earlier this year. And since that time, Suntech
has been negotiating vigorously with the investors in those notes, the vast majority of those investors. fruit with regard to that. Now, this is, for Suntech Power Holdings, essentially a life-or-death sort of issue in the sense that if the negotiations with these shareholders fail -THE COURT: Where -- have you filed for bankruptcy? Exactly. The company will file for And has seen some
MR. SAMBERG:
bankruptcy, and that will be the end of it -THE COURT: Would you be in Chapter 11? Actually the bankruptcy would take place
MR. SAMBERG:
in the Cayman Islands, would be under a rather different -THE COURT: They have not filed yet? They have not filed yet, because they
MR. SAMBERG:
are in the process of negotiations of very detailed sort with their creditors. And, recently, the most recent results of
that is that the company and the principle creditors, which are the purported investors in this 575 million-dollar issue of convertible senior notes, have reached what they believe is the basis for a restructuring framework agreement, which I understand will be described imminently. THE COURT: They are a different class than the people
that are the plaintiffs here. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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MR. SAMBERG:
No, they are exactly -- they purport to
be situated in precisely the same position as the claimants here. And, consequently, the claimants here -THE COURT: But the claimants here have not been
included in the conversations. MR. SAMBERG: Well, not at all, your Honor. The And
claimants have not been excluded from those conversations. in fact, your Honor -THE COURT: Have they got notice of them? Pardon me?
Have they had notice of them? Yes, they have, your Honor.
What notice have they had? Well, among other things, first, these They have been highly
MR. SAMBERG:
conversations have not been secret. publicized. THE COURT:
What do you mean highly publicized?
The
Cayman Island corporation being highly publicized in this country? MR. SAMBERG: Yes. In this case, Suntech Holdings is And it has made
a New York Stock Exchange listed company.
ample disclosures and press releases with regard to the progress of those discussions. But, more importantly, your Honor, I myself have put Mr. Teitelbaum in contact with representatives of -- with a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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representative of that negotiating group.
And as I understand
it, he was invited to participate in it if he chose to do so. But, that's besides the point. opportunity has always been there. I think the
There has never been an
effort to exclude anyone who purported to be an investor in these notes. And toward that end , I take it that the
representatives of the vast majority of these -- of the purported investors in these notes are negotiating for their own benefit and, as I understand it, a general outline of a resolution of this matter, and a reorganization of the company, with an exchange of debt for equity is in the works. has been announced in the press, as well. general press. I think if you look, your Honor, the very first item on that collection of documents that I provided to counsel and to the Court is a Bloomberg Businessweek release. And And that
This is in the
Bloomberg Businessweek has been publicizing the events as they have transpired, either by way of publishing press releases, or by way of reporting on it. And this is -- there is no secret And, in fact, I think
with regard to what is going on here.
that Mr. Teitelbaum would concede that these particular claimants, in this instance, are racing out as quickly as they can in an effort to I think, frankly, seek a preference relative to all other creditors who are arguably similarly situated. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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Now, I mean one of the questions the Court ultimately has to face, is should these purported -- and this is the larger picture, as I said, your Honor. I'm not saying that
these are points that are legal matters which are directly related to this particular procedure that these claimants have invoked -- and I'll get to that in a moment. But, really, one
of the questions that is underlying this is should these alleged investors be given a preference relevant to all others, and does it make sense for them even to seek it, and would the Court be doing them any benefit if it granted it to them. Because if these negotiations collapsed, then the investors are all going to suffer. And the company has made every effort to And that
optimize the result for the benefit of its creditors. is why these negotiations are ongoing.
And they involve
bringing in a fresh investment converting, as I understand it from the press release, converting a debt to equity to find some optimal result for all of these creditors similarly situated. Now, one other point that I would like to make before addressing the details with regard to these particular purported claimants is that I think Mr. Teitelbaum has agreed and conceded that Suntech has issued these promissory notes. And its obligation as a formal matter under these notes is to one party, and one party only. the Holder, CD & Co. That is, it's obligated to pay
And if it is made to pay any other party,
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then CD & Co. without getting a release from CD & Co. of a comparable nature, or some evidence of an assignment of a claim by CD & Co., then Suntech risks being put in a position of having this obligation to CD & Co. and having an obligation to some other party. And so far as I can tell in the papers that
have been submitted to the Court, I see nothing which constitutes an assignment, or any waiver or partial release, by CD & Co. And so in the back of Suntech's mind is this question
I think the Court must face as well, and must face it in the context of this very peculiar procedural posture that the plaintiffs in this case have invoked for reasons that, as I said, are beyond me. Because CPLR Section 3213, which is a
motion that seeks summary judgment before there is any discovery, whatsoever, any opportunity to review the bona fides of papers, or to examine any parties whatsoever, must be based on an instrument for payment of money only. That is typically
a promissory note from me to you that you can present to the court, and that on its face prima facia, number one, you can authenticate and, number two, represents an obligation from me to you. And that's clearly not the case that we have here. I wanted, also, to thank Mr. Teitelbaum for helping demonstrate that -- when he cited the Weissman case, which is a New York State Court of Appeals case. That the essence of this
procedure is something where there is no reference, no need for reference to extrinsic evidence. This case, clearly, is one
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which is based almost exclusively on extrinsic evidence. THE COURT: What cases do you have to show that this
is any different than it's an obligation to pay that's contained here. Since they have provided letters that show What
that they have standing, I don't think you could contest.
is it that you are relying on to say this is different from the ordinary motion for summary judgment in lieu of complaint that is filed all of the time in New York State court? MR. SAMBERG: THE COURT: Well, your Honor, I -- perhaps I --
What authority do you have? Well, your Honor, the legal authorities
MR. SAMBERG:
are cited in our brief, but I think I can better illustrate -THE COURT: What ones are you referring to? I'll defer to my colleague, Mr. Barres,
MR. SAMBERG: in a moment.
But if I can -- if I can go on for a moment, and then come back to providing those legal authorities, I will do so. I wanted to -- what I wanted to do is to point out by illustration why this case is not amenable to summary judgment in lieu of a complaint before any discovery. THE COURT: authority. MR. SAMBERG: THE COURT: authority. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 Pardon me? That's why I'm asking you for your
That's why I'm asking you for your legal
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MR. SAMBERG:
Yes.
And I will provide that in a
moment, your Honor, but -If your Honor will permit me that moment. While -- while I am -- while my colleague is finding that legal authority in our, in our brief, if I may just point out by illustration why that rule with regard to CPLR 3213 procedure regarding the mandatory denial of a motion when the claimant has to resort to extrinsic authority, why that rule applies so very much in a case like this. Because if you look
at the extrinsic evidence -- and I will do so in detail for the benefit of your Honor in a moment. But if you look at the extrinsic evidence that is presented by each of the plaintiffs in this case, each and every bit of that extrinsic evidence suffers, either because it is unauthenticated, it consists entirely of hearsay, or it creates its own issues with regard to substantive matters in this case. And I am prepared, and I will in a moment, go
through the individual documents on which these plaintiffs rely to point out specifically how none of these documents become admissible at this stage without further examination. That is
the problem that is created by resort to extrinsic evidence. And that is what these parties have done without necessarily establishing the foundation, either for the authenticity of many of these documents, or with regard to the hearsay elements of these documents, or addressing the many questions, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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substantive questions, with regard to -- that are created by these documents, not the least of which is who actually owns the investment that they purport to claim. through that, in detail, in a moment. Clearly, your Honor is aware that with regard to any motion for summary judgment, the defendant is going to get the benefit of all doubts, all inferences, et cetera. And there And And I will go
are substantial evidentiary issues that have been created. the documents, if they were ever made admissible, as I say,
create material issues of fact that I will describe in detail. And I put it to your Honor, in the end, that Suntech deserves an opportunity to take discovery before a summary judgment motion is heard. Now, to begin with, I would point out that with regard to points regarding ownership, title, et cetera, even to the claimed beneficial ownership -THE COURT: I am having trouble with this whole You came in here, and you handed me up
argument, Mr. Samberg. these news articles.
These news articles are dated after this
case had been fully submitted to the Court. In the meantime, these people brought this action in early May or June, and no word from anyone from, as I understand it, from anyone at Suntech. At all. They
completely disregarded them if they had any negotiations going on. They have known of this action, obviously, because you SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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have appeared in the action. that purpose.
You must have been retained for
And, now, you are talking about discovery when
it is perfectly clear that, yes, they do contain hearsay, it's true. But, they are not -- no one is going to seriously And so now
dispute the fact that those letters are genuine. you've asked for discovery -MR. SAMBERG: THE COURT: Your Honor, may I --
The alternative would be to have someone
just give an affidavit from CD & Co., and maybe Merrill Lynch, something like that, to attach to the documents. say, give the assignment. And, as you And
But the money is due and owing.
I don't see why I should engage in you having lengthy discovery. week. MR. SAMBERG: THE COURT: Your Honor, if -If you want to have discovery, then do it in a
And, then, in that week, you can have your
discovery, talk to CEDE & Co. and talk to whoever else as to whether the documents are authentic. And we'll have -- you can But why not go
file something with the Court after that time. right ahead with this thing.
You are just asking -- what
you're actually doing is trying to put them off while a deal is made by the major creditors. MR. SAMBERG: THE COURT: Your Honor --
And they make the deal, they get what they
want, but where do these people stand? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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MR. SAMBERG:
Well, the -- the creditors who are in
negotiations with Suntech stand for -- stand to make an arrangement that benefits all creditors. individual creditors. It is not for
And these creditors were never excluded, However,
they were always welcome to join in that negotiation. because -- I would point out to your Honor -THE COURT: There is no showing there is any
negotiation before August 30th in these papers.
August 30th is
after this action had been brought and fully briefed. MR. SAMBERG: Yes, your Honor. It's true that these
papers are -- relate to most recent developments in connection with those negotiations. But, Mr. Teitelbaum is aware, and I
believe Mr. Dugaw is aware, that these negotiations have been going on for -- since probably the beginning of the year or before then, that they have been publicized amply, and that they were never excluded. THE COURT: In fact, in the case --
Well, the --- as I mentioned with regard to
MR. SAMBERG:
Mr. Teitelbaum, I introduced him to a representative of that group, if he chose to join in that discussion, on behalf of his clients. And with regard to Mr. Dugaw, I made him aware and
asked him if he wished to be contacted by a member of that group. It has never been -- it has never been a question of
exclusion. But, your Honor, if I may go on -SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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THE COURT:
Yes, you can.
But then we get into this
And that is, of course if I grant the motion, they
would have judgments and they would stand in a different position than the other creditors. MR. SAMBERG: Yes, your Honor.
May I go on to -THE COURT: Yes, you may. -- discuss individual documents?
MR. SAMBERG:
Let me -- let me take them in order, beginning with the question of the claim by Trondheim Capital Partners. The claim by Trondheim Capital Partners, a limited partnership, is supported by a declaration, an affidavit of a gentleman by the name of Colin Peterson who indicates that he is the managing director of another company, Trondheim Capital. A manager. And we don't know whether he is a legally
authorized representative of Trondheim Capital Partners, a limited partner. And he -- I do not believe that he identifies And the general partner would
who the general partner is.
normally be the person who would represent the company. In this case, as evidence of the claim by the company, the plaintiff, Trondheim Capital Partners Limited Partnership, Mr. Peterson submits as exhibit A in -- currently submitted on August 15, a number of pages. They are heavily redacted. And
some of them do not identify what they are. On the first page in those documents, which is -SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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THE COURT:
I don't see where you are. -- identified page 8 of 49, in
MR. SAMBERG:
the affidavit of Colin Peterson, which was filed August 15, 2013. So, directing the Court's attention to page 8 of 49,
which is inscribed on the top of the page. If I may assist the Court. MR. TEITELBAUM: THE COURT: exhibit A. Yes. Your Honor, may I approach to assist the It would be in the reply. All right, I go to
This is August 14th.
MR. SAMBERG:
THE COURT:
Yes. Thank you. I think you have the page in
MR. SAMBERG:
front of you, your Honor. Now, your Honor, this document that you have in front of you purports to be the principle document evidencing an investment interest by the company called Trondheim Capital Partners. Now, the Court will notice that this is not an account statement. We have no idea what this document is, nor do we And it is not identified further.
know who prepared it.
Beyond that, the following 13 pages are heavily redacted documents which, of various providences, which indicate that a trader by the name of Colin Peterson at Trondheim submitted, appears to have submitted an order, does SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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not identify for whose account.
And, also, lists a person by
the name of Keden Wright, a place called Carolina Capital, without identifying who or what that is. If one trolls through None of them
the 13 pages, they are all of a similar nature.
are account statements, none of them indicate the party for whom trades were made, none of these -THE COURT: Carolina Capital is identified on the
cover page as the broker. MR. SAMBERG: The -- again, your Honor, that first
page is unidentified as to the nature of the document and who prepared it. But, I would point out that none of these
documents constitutes an account statement indicating a current ownership of any interest, whatsoever, by a company by the name of Trondheim Capital Partners. In a note issued by -- in an
account relevant to a note issued by Suntech Power Holdings, there is no evidence, even if these documents had been authenticated, even if they were not hearsay, and even if they had been proper documents indicating an interest by Trondheim Capital, they would not be satisfactory for purposes of a summary judgment motion in lieu of a complaint before any discovery whatsoever. Your Honor, unless your Honor has any questions with regard to that, I would like to address papers submitted on behalf of Mr. Meixler next. THE COURT: My question is aren't these just support
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documents that -MR. SAMBERG: THE COURT: They are.
-- have the date of the acquiring of the
issues, and are explained by the affidavit? MR. SAMBERG: Your Honor, none of this -- none of this But if it had been
is documentation which is admissible.
admissible, none of it would prove that the company, as I mentioned, Trondheim Capital Partners, has a current holding of a beneficial interest via an account at any particular company, at all. And so on that basis, I would suggest, even if we
didn't look beyond these documents, that it would be impossible to grant summary judgment in lieu of complaint to Trondheim Capital Partners, L P. With regard to Mr. Meixler, if I may if I may go on? THE COURT: You have the sworn statement of
Mr. Peterson that he is a managing director of Trondheim Capital, the general partner of Capital Partners LP, and that Trondheim is the owner of beneficial interests of approximately $500,000 total amount standing, of the 3 percent convertible senior notes through March 15, 2013. It's an affidavit that he owns the property, or that his, Trondheim Capital Partners, LP owns the property. And
it's verified by the broker, as I understand it and by CEDE & CO.'s letters. MR. SAMBERG: Well, your Honor, in fact, it is not
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verified by any broker, no broker put in any affidavit whatsoever. Mr. Peterson's position as an advisor to Trondheim He is not a general partner. He
Capital Partners is one off.
does not purport to be anything other than an investment advisor. There is no brokerage account that indicates the
current holdings of that company. THE COURT: Capital, LLC -MR. SAMBERG: THE COURT: That is a different company, your Honor. He is the managing director of Trondheim
-- which manages -- which manages
Trondheim Capital Partners, LP. MR. SAMBERG: Yes, your Honor. Trondheim Capital, LLC
is a distinct company which serves as an investment advisor or manager of this other company. employed for that purpose. But, that means that they are
That does not mean that they are a
general partner, or another -- or a representative of that company. And, in any event, as an investment manager, I'm not sure if he could vouch for the authenticity of documents that are provided by another partner. And that -- and those
documents themselves are not self-authenticating, and they do not indicate what they are. Or who prepared them. So we do
not know who prepared that first page with regard to the summary that you observed at the very outset of our discussion here. Nor do we have anything that indicates a brokerage SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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account indicating a current holding of a beneficial interest in any note issued by Suntech. The evidence simply is not there. And, it would be, I
propose, a bit of a travesty if Suntech were not given at least some opportunity to examine the situation, take discovery. Otherwise, as I mentioned earlier, it is being put at risk of paying the wrong people. We -- if we're -- if Suntech is made Nor do we know whether
to pay at all, in these circumstances.
Trondheim Capital Partners, itself, is holding some interest of any kind for the benefit of other parties, its investors in Trondheim Capital Partners. We do not know if this is the And we
proper party, or whether it's a representative party.
would like the opportunity to take discovery with regard to that, simply to establish that, your Honor. By the same token if I may go on to Mr. Meixler. Later in the same document, fortunately, without -- without reference to anything further, there is an exhibit which contains all of the -- all of the evidence propounded by Mr. Meixler. And if I may approach to the bench to assist you in finding the document that I'm -THE COURT: front of me. that? MR. SAMBERG: What I'm referring to here, simply for It's all right, I have the documents in What page is
Mr. Meixler's affidavit in reply.
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convenience, is in the same affidavit.
There is -- there is a
set of papers which is identical to what Mr. Meixler submitted a reply. And I am looking at page 23 of 49 of those papers.
If you look at the upper right-hand corner, you will see an identification of the page number. THE COURT: Okay. Do you have that? Now when you say ECF
MR. SAMBERG: THE COURT: number? MR. SAMBERG: THE COURT:
Yes, thank you.
Yes.
Or -Yes, it's --
Got it. Okay, thank you, your Honor.
MR. SAMBERG:
Now, if we can examine these pages as well. First, what we have is what purports to be an account statement issued by Meixler Investment Management. It turns
out that Mr. Meixler is not, apparently, an investor, but he is an investment advisor. March. The account statement is dated in It was made long before the claim So, it would have been more apt
It is not current.
was made, I believe, in June.
for an account statement to have been made in June. The problem is two things. Number one, Mr. Meixler
makes a claim on on the basis of an alleged investment of approximately $50,000 in the in the Suntech notes. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 This
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statement indicates that investments totaling $40,000 were made. It does not indicate whose account, it does not indicate We
who Mr. Meixler, as an investment advisor, was buying for. do not know whether Mr. Meixler is the actual owner of anything, whatsoever.
And we do not know whether the proper
parties are others who may have claims. The pages that follow are just puzzling. just entirely puzzling. They are
These are various confirmations issued Several of them are highly
by Meixler Investment Management. redacted.
The very first one involves -- purports to be a -What page are you on? This is page 24 of 49, the very next
THE COURT:
MR. SAMBERG: page. THE COURT:
All right. Looking to the upper right-hand corner
MR. SAMBERG:
of the text, there you will see an account number which is redacted. And then the reference, Your Financial Advisor, So this is obviously Mr. Meixler, acting an But
Michael Meixler.
investment advisor, is buying for somebody else's account.
Mr. Meixler does not appear to be the Holder of an interest at all. This very first page indicates a purchase, as a whole, of
$50,000 worth of Suntech notes, which is entirely inconsistent with the prior page, which is indicates a purchase of a total of $40,000 worth of Suntech notes in four tranches. This is The
dated at the end of May, a trade date at the end of May. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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suit was brought on June 11.
It's entirely inconsistent with
the preceding -- the documents that preceded, and the documents that succeeded. The following several pages, running from page 25 of 49, through page 29 of 49, are heavily redacted documents of a similar nature issued by Meixler Investment Management indicating a redacted account number, but indicating that it is information provided by, quote, Your Financial Advisor, Michael Meixler. To whom, we do not know. The very first of those pages, page 25 of 49, is an indication of how complex the situation is that Mr. Meixler is setting you up for whoever his clients are. trades that are described. Holdings, something. There are two
This one is a put of Suntech Power And a
It doesn't indicate exactly what.
number of puts totaling what looks like 300 puts, followed by a purchase of what looks like $20,000 in notes at a very deep discount. And this sort of thing appears on the next pages.
Again, heavily redacted documents, without indicating for whose benefit these trades are made. of puts, and long positions. A very complex set of trades,
And all of the documents
submitted by Mr. Meixler are, how shall I put this. Number one, internally inconsistent; number two, unauthenticated; and, just lead to enormous questions with regard to what in the world is going on here, and who is the actual beneficial Holder of the purported claim. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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If I may go on, your Honor, to -THE COURT: argument is. I'm not sure that I -- I see what you're
But I have got the fact that the account number, And, Your Financial Advisor, Michael
2306, is mentioned.
Meixler, is listed up in the upper right-hand corner, does not mean that the he didn't buy it on his own account, which normally is the address that you see on the left-hand side of an account statement in brokerage account. assuming -MR. SAMBERG: THE COURT: No, I -And So that you're
-- that he is purchasing for others.
you may have a right to do that, I don't suggest that. is an assumption on your part.
But it
And I don't know whether I have
to look at the other documents to see whether he said that these purchases were in his own account. MR. SAMBERG: I think there are conjectures of a And part of the submission of Now, in a
various kind that can be made.
these documents asks us to make certain assumptions.
situation like this, if there is any doubt, it has to be resolved in favor of Suntech, I think we can all agree. In addition, there is a stark obvious point that there is an internal inconsistency among all of these documents. They do not add up. Your Honor, if I may also go on to the situation with regard to the Dugaws. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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THE COURT:
Let me see where he says -- I don't have He says: As stated in my
his original affidavit of June 10th.
original affidavit, I am the owner of beneficial interests of approximately $50,000 in total -So you have an affidavit that he is the actual owner. MR. SAMBERG: THE COURT: Well, your Honor, without having --
You don't have any basis for your
conjecture that he purchased for other people. MR. SAMBERG: I believe there is doubt that is raised And since we have not had an
by the documents themselves.
opportunity to question Mr. Meixler, the question is -THE COURT: at straws. MR. SAMBERG: Well, your Honor, these are very real The question is whether you are grasping
questions at the moment in terms of whether Suntech is gonna be put in an untenable position, and that these issues can be resolved very -THE COURT: They are in an untenable position right
They have been in an untenable position since March. MR. SAMBERG: Your Honor is correct, that Suntech is
in a very -THE COURT: We're talking 6 months. -- is in a very difficult commercial
MR. SAMBERG: position.
I cannot disagree with you with regard to that.
However, what I am suggesting to your Honor is that a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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discrete, reasonable period of discovery would help us to resolve all of the issues that I have mentioned. And the
additional issues, that I will point out in a moment with regard to the Dugaws, as well as others, that, you know, I -- I will not take the Court's time right now. to say that there is a remedy for this. But I -- suffice it
It is in the normal
proceedings, procedures of this Court that if the Court is going to permit a motion for summary judgment, it would at least give the defendant an opportunity to make a fair examination of what the record is that is submitted by the plaintiff since there undoubtedly are issues that are unresolved, and there are ambiguities that are unresolved. And
in the instance of a motion for summary judgment of any sort, and certainly a motion for summary judgment in lieu of complaint, all of those issues, any ambiguities, any doubts, must be resolved for the benefit of the defendant. the rule of fairness in this court. stands for. If I may go on with regard to the Dugaws' situation, which is even more complex, your Honor. With regard to the Dugaws situation, we have the foundation issue of the status of Marcus Dugaw, who is a plaintiff in this case. There is no evidence submitted, Mr. Dugaw asks us And that is
That's what this court
whatsoever, that he is a Holder of anything.
to accept California law regarding the rights of spouses SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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relative to each other in the event of divorce.
That is his
claim, that under California Domestic Law, he has an inchoate right against his spouse that would give him an interest in the event of divorce with regard to his spouse's alleged claim here. But, that says nothing about his rights with regard to
Suntech. The status of Mr. Dugaw as a claimant is greatly in doubt. And we should have discovery with regard to that.
There is a question as to whether he has standing at all. THE COURT: law is. is. We are all aware of what the California And you're aware of what it
I'm aware of what it is.
Really. MR. SAMBERG: It's not a question -- I don't question
what the law is.
I believe that that law has no applicability
here as to whether Mr. Dugaw has any standing, whatsoever, because there is nothing that indicates that he holds any -THE COURT: they not? MR. SAMBERG: both he and his wife. THE COURT: securities. MR. SAMBERG: Your Honor, there is no document that There is a document that And they are the ones that hold the He and his wife are plaintiffs; yes, He and his wife are the plaintiffs, are
indicates that they own anything.
they submitted that Mrs. Dugaw has an account of interest with SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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regard to something.
And I will get to that in a moment.
But
nothing with regard to whether Marcus Dugaw, himself, has any ownership interest. THE COURT: But under the law, there is communal We are all aware of that.
property in California. MR. SAMBERG:
That may be, but that -- that does not That affects
affect Mr. Dugaw's rights relative to Suntech. his rights relative to his wife. THE COURT: an interest in it. MR. SAMBERG:
If it is in his wife's name, then he has
That would be an inchoate interest, I
believe, your Honor, in the event of a divorce, when he could exercise that right. But, your Honor, with regard to law, I would welcome the opportunity to brief that very point to the Court, because I believe it is one which affects whether Mr. Dugaw has any standing here at all. And since there is a question with regard to that, I would ask for the opportunity to brief it so that we can be clear on it. Because Mr. Dugaw, remember, I mean he submitted He never said
something with regard to this only in his reply. anything before this. address that point.
We have not had an opportunity to
I should also point out that while Mr. Dugaw purports to represent Mrs. Dugaw in this proceeding, if Mr. Dugaw -SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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obviously, Mr. Dugaw is not a lawyer and is appearing pro se -THE COURT: I don't know that he is a lawyer. Mr. Dugaw can verify that he is not a
MR. SAMBERG: lawyer. THE COURT:
No, I don't think he is a lawyer. Yeah. Can you verify that you are
MR. SAMBERG:
Mr. Dugaw, are you there? not a lawyer. MR. DUGAW: THE COURT: right? MR. DUGAW:
I am not an attorney. But you are married to Mrs. Dugaw, is that
I am married to Mrs. Dugaw.
She is here
and available if the Court would like to speak with her. MR. SAMBERG: THE COURT: Thank you, Mr. Dugaw.
All right. With regard to the purported evidence on
MR. SAMBERG:
behalf of Mrs. Dugaw's alleged interest. Now, Marcus Dugaw submitted, and purported to authenticate what amounts to -- and I will go through this in detail in a moment -- a heavily-redacted slice of a June 2013 account statement identifying Jessica Dugaw as the account holder. And that is Marcus Dugaw affidavit one, his
very first affidavit, exhibit 3. Subsequently, he, Mr. Marcus Dugaw -THE COURT: This is not the one in reply.
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MR. SAMBERG:
No.
That was the very first -- the very That would be And, then, in the
first affidavit submitted by Mr. Dugaw.
exhibit 3 to Mr. Dugaw's first affidavit.
reply, he purported to authenticate a redacted trade confirmation from September 2012. Now, clearly, Mr. Dugaw is not the account party, not a recipient, not an addressee of any of these documents. is not in a position to authenticate them. themselves, are hearsay. And
And the documents,
And, in fact, Marcus Dugaw's
affidavits, to the extent that he is not -- if he does not have standing, and we maintain that he does not. hearsay. His affidavits are
And we would like to question Jessica Dugaw with
regard to those documents. Now, if I may address the documents themselves. Working backwards, certainly the second document submitted, which is a confirmation notice -THE COURT: Could you give me a page number? I'm sorry, your Honor. This is in
MR. SAMBERG:
connection with the affidavit of Marcus Dugaw, the second one. THE COURT: Filed August 12? It looks like the document date is I do not have the filing date
MR. SAMBERG:
approximately September 3 or 4. handy. THE COURT:
I'm looking at the ECF number.
There is
another one dated September 3. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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MR. SAMBERG:
I believe it would be that one, I
THE COURT:
September 3. Yes, I believe it would be that one.
I have got that one. Exhibit B. I just point out that
MR. SAMBERG:
exhibit B is a confirmation notice dated September 27, 2012. So it does not purport to be a current account statement. And
we do not know what the current -- this does not indicate what the current account status is of Jessica Davidson Dugaw, nor is the document authenticated. THE COURT: Let me look at exhibit B. This is in the
Ameritrade document sent to -- confirmation notice sent to Jessica Davidson Dugaw. MR. SAMBERG: confirmation notice. Yes, your Honor. It is just a It
It is sent to Jessica Davidson Dugaw.
requires authentication by someone.
I submit that Marcus Dugaw And if it
is not in a position to authenticate this document.
were authenticated, it is just a confirmation note with regard to a purported trade on September 24, 2012. current account statement. The earlier document that, to which I referred, is an account statement. THE COURT: Let me just see whether it is. So it just says the date that It is not a
It is a confirmation.
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it was purchased.
And 10,000 of Suntech Power Holdings Seems
Company, senior, convertible, 3 percent due, 3/15/2013. pretty clear to me. MR. SAMBERG: Yes, your Honor.
It is -- the document And it purports
itself is clear as to what it purports to be.
to be nothing more than a confirmation notice regarding a trade that was made a year ago. Approximately. It does not purport
to indicate what holding Jessica Davidson Dugaw currently has, or had, at the time that she commenced suit, which could have been entirely different. And so there is no evidence of that presented here. In addition, I -- as I said earlier, I submit that Marcus Dugaw is not in a position to authenticate this document. I do not
deny that the authentication of this document would not be a difficult matter. It's something that we would like to see
done, rather than have to worry about whether the document is authentic -THE COURT: You know, I knew Mr. Mintz. Pardon me? And he was a man of
MR. SAMBERG: THE COURT: high character.
I knew Mr. Mintz.
I don't think he would engage in this kind of
a -- of a defense. MR. SAMBERG: Mr. Mintz -THE COURT: I really don't think he would be asking Well, your Honor, I -- I hope that
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for these authentications, when you have letters dated in August, CEDE & CO. to Ameritrade, and copy to you -MR. SAMBERG: to -THE COURT: -- and, you know --- address those letters. Your Honor, I -- if I may, I would like
MR. SAMBERG: THE COURT: And, Ameritrade -MR. SAMBERG:
-- all providing you with the information.
Your Honor, if I may.
On the one hand,
I would say I would hope that Mr. Mintz, Richard Mintz, his father, any of them, would have made a full and vigorous defense of his client, as I am -THE COURT: He would, but --- endeavoring to do for mine.
MR. SAMBERG: THE COURT: reputation for. MR. SAMBERG:
-- but this is what lawyers get a bad
Your Honor, the question I guess is,
with regard to these procedural questions, all of which I submit create issues that are unresolved, and in the context of a rush to the courthouse seeking summary judgment in lieu of complaint, are premature, and that they can all be addressed in the normal course of even limited discovery. we're asking for, is an opportunity. THE COURT: You have had an opportunity, when you got And that's what
copies of these things, to ask for whatever you wanted. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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MR. SAMBERG:
No.
In fact, your Honor, we did not. This was a motion for
There was no period of discovery. summary -THE COURT: the letter. needed. MR. SAMBERG:
I didn't say it was a -- you were cc'd on
You could have asked for anything further that you
And by that -- by that letter, you're
talking -- your Honor is referring to a letter to Suntech, I take it, your Honor? THE COURT: Well, they have -Is that what your Honor is referring to?
They have a letter from the Depository And from
Trust Company in connection with these shares.
Ameritrade to the Depository Trust Company, dated August 23rd. And then a letter from CEDE & Co., dated August 20 to Suntech and cc'd to you, and cc'd to Ameritrade. Now you're coming in
here, it's September 12, and saying, oh, we need time to have discovery here. inquired then. MR. SAMBERG: Well, your Honor, I think it's fair to If you needed anything else, you could have
THE COURT:
You had these papers. Your Honor, these papers were filed on
MR. SAMBERG: August 28th.
And it's fair to say that, yes, we are here
asking for an opportunity for discovery, for a period of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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discovery.
And I submit to the Court that in the
circumstances, I don't think there is a question but that it is premature to grant summary judgment in lieu of complaint. And
that Suntech, yes, has not had an opportunity for discovery or a fair opportunity to examine the papers. are ambiguous, all of them. And that the papers
And that there are substantial
issues of an evidentiary nature but, more importantly, substantial issues of a substantive nature. of Marcus Dugaw is entirely in question. That the standing
And that the rights
of the respective parties who are before you today having brought this in a form which is unknown in federal court, but is a construct of state court in New York that is unique, and have brought it with regard to claims that do not fit that sort of procedure, yes, in this circumstance, your Honor, I think it is fair to give this defendant, as you would give any defendant, an opportunity to defend itself, and to resolve those issues. And, yes, this defendant has not had an
opportunity to do that. The letters, themselves, if your Honor cared to hear, the letters themselves are internally questionable. But,
again, all of these points, all of these questions can be resolved if we simply follow the normal course in federal court towards resolution of the claims that these plaintiffs have brought. THE COURT: Well, I mean this letter from Ameritrade
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goes to Depository Trust.
And he wants to get confirmation, as
I understand it, with respect to the 10,000-dollar face amount. What have I got, the Dugaw? I have the Dugaw one. MR. SAMBERG: And your Honor will see that these I have the Dugaw. Yeah,
documents were submitted a few days ago, in September. THE COURT: August 23rd, the letter is dated. They were filed.
MR. SAMBERG: THE COURT: with Ameritrade.
He, as I understand it, has an account
Ameritrade then writes to the Depository
Trust Company asking them to have its nominee, CEDE & Co. confirm the position with respect to $10,000 face amount of the above-referenced security credited to our DTC participant account on the date hereof, in addition to acknowledging this request is subject to the indemnification provided for in DTC Rule 6. The undersigned certifies to DTC that the information Notes credited to our
in fact set forth are true and correct.
DTC participant account are beneficially owned by our customer, Jessica Dugaw. MR. SAMBERG: Now, these, as I said, these documents That document
were filed a few days ago in early September. that you read from is not authenticated. document from CEDE & Co. is in draft. eventually it gets -- it is signed.
The following
But let's assume that
And it reads that, on the
basis of what DTC is informed, it says, DTC is informed by the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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participant.
And then it describes certain things that it And then it goes on to say that DTC And on the basis of
received as information.
is informed of other things, as well.
those informations, DTC purports to assign a letter here, or at least this document purports to be a correspondence from CEDE & Co. All well and good. All well and good. Except, that there
is no foundation for the admission of any of these documents. And there is some question as to what was the document you referred to at the beginning of your description a moment ago. You referred to a request that would have been made by Mr. Dugaw, perhaps, or Mrs. Dugaw -- we don't know whom -- to Ameritrade. We do not have that. So we do not know what these
letters are responding to. THE COURT: You know what they say. And what they
said was Depository Trust Company, and you knowed that CEDE &CO. as nominee of Depository Trust Company confirmed those things to Suntech Power Holdings Company. MR. SAMBERG: And, you got a copy.
Your Honor, I received a copy -- pardon
me, I'm sorry, your Honor. THE COURT: You got a copy. If your Honor is -- I'm sorry, I may
MR. SAMBERG:
have interrupted you, sir. THE COURT: No, that's all right, I mean -Your Honor, to be fair, we did not And I must put it -- I must
MR. SAMBERG: receive a copy.
So far as I know.
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make that qualification.
So far as I know, we did not see a
copy until the papers were filed. THE COURT: But you were cc'd in the documents. I see, with regard to one of these But so far as I know, we did not
MR. SAMBERG:
documents, we are cc'd.
receive a copy until it was filed. And whether the filing was made, or whether the transmission was made in late August or early September, I think, is irrelevant, really, for present purposes. The point is that -THE COURT: It means that as of that date these
documents were -- these securities were in Mrs. Dugaw's name. MR. SAMBERG: THE COURT: Perhaps.
What? Your Honor, perhaps.
MR. SAMBERG:
I mean if we were on trial, and this is what we are standing here before you, in effect, doing. If we were on
trial, you would require that these documents be authenticated, that my issues with regard to authentication be resolved, that a foundation be made before they were admitted into evidence. Since they are not authenticated and cannot be admitted into evidence, they don't prove anything. In addition, I think in the context, as I mentioned, in addition to everything else, the status of Marcus Dugaw is entirely up in the air. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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But, your Honor, I think -- I think I have spoken enough in terms of the points that we want to make with regard to these matters of evidence and substance with regard to the questions that are raised with regard to who is entitled to bring a claim, if nothing else. And we would request an
opportunity to take discovery with regard to those issues, and a few others, over a relatively brief period of time. would suggest to the Court 60 days. And we
Because, we would be
asking for documents and an opportunity to take depositions. But no more than 60 days. With your Honor's permission.
What we do submit to the Court is that a motion for summary judgment on this record cannot be granted at this time. MR. TEITELBAUM: brief reply? THE COURT: Yes. Thank you, your Honor. Would your Honor entertain a very
MR. TEITELBAUM:
Your Honor, for the record, Jay Teitelbaum for plaintiffs Trondheim and Meixler. A few points that I would like to try to make. I think at the outset of my initial argument, I started out by saying what this is all about is trying to make the simple complex. I don't think I need to say anything more
about that after hearing Mr. Samberg's argument. I scratched my head quite a bit, especially with the opening, with that the plaintiffs here are in a unique SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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position.
And the argument here is we're so tiny that we're But, yet, we're going to create some And I'll even address on
almost irrelevant.
travesty in case there is a payment. the merits why that is wrong.
But what it -- what it alluded
to was these little guys are the only ones suing, they must be wrong. I mean it's been awhile since I have read this to my daughter, but The Emperor's New Clothes came to mind. little boy in the audience was right. The
And, your Honor, to the
extent that we're the little boy, I think we're right here, which is that the notes matured. about ongoing negotiations. they happened. There have been news releases
Yeah, we knew about them after
And that's not an invitation to attend; that's
not an invitation to participate; that's not an invitation for you to, your 50 or 500-thousand dollar claim to play with the gorillas in the room who have hundreds of millions of dollars. In point of fact, aside -- I'm not going to even argue about whether we were or were not invited. It's irrelevant. But it
Because I will represent to the Court, we weren't. doesn't matter. The notes matured.
There is clearly no
obligation under New York law for a party who is holding a matured note to do anything but demand payment. obligation to negotiate at that point. There is no
Every contract, of
course, has an obligation of good faith and fair dealing in the performance of the contract. But once the note's matured, it's
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irrelevant.
Essentially what the Court is hearing, is that
this company wants the benefits of a bankruptcy file, the automatic stay, having some committee act for some others as fiduciaries, without any of the burdens. The parties negotiating are not fiduciaries for anybody here. They are negotiating on their own behalf. There
is no bankruptcy filing.
This company continues to do whatever
it feels like doing with whatever assets it has in this country, and outside of the country, perhaps to the detriment of creditors. court. Why? Because there is no oversight by a bankruptcy
Yet, we're being asked, wait, just wait, just wait. The entire argument here was
Because of alleged hearsay.
predicated upon hearsay and irrelevant evidence. I think your Honor put your finger on it, frankly. My
clients submitted not one affidavit in reply, but their initial pleading that's appended to the notice of removal, the summons, the notice of motion, motion for summary judgment, included affidavits as well that attested to the fact that these plaintiffs owned these shares. no credible dispute here. There is no dispute. There is
This is sort of a watch as my
fingers never leave my hand, I'm going to come up with as much stuff as I can to throw mud up against the wall. what summary judgment is about. dispute as to a material fact. The fact that account statements were redacted, I have SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 That is not
It has to be a credible
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advised the Court I have the originals.
I would take the
position, frankly, I've complied with the rules on privacy in certain -- many of these redactions on the electronic filing system. You are not supposed to include account numbers, so I left the
you can't get hacked and can't get broken into.
four last digits on the account numbers so I showed what it was. But I do a lot of bankruptcy and other work where you
have to redact social Security numbers, account numbers. Southern District has a rule on that. rule. I complied with that
There was nothing improper, nothing nefarious about
those redactions. The remaining redactions regarding accounts that have nothing do with this, that's appropriate, that's private business. Has nothing do with it.
Again, with respect to the issue of travesty and double jeopardy. I want to just spend a minute and talk about
that and actually address a comment and a question that I think was probably the most important one that the Court had, which is, if I grant the plaintiff's relief, aren't I putting them ahead. And I heard you loud and clear. Your Honor, Section 6.07 of the indenture specifically provides that, notwithstanding any other provision of this indenture, the right of any Holder to receive payment of all amounts due with respect to securities on or after the respective due date, which we know has passed, as provided SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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herein, or to bring suit for the enforcement of such payment on or after such respective dates, shall not be impaired or affected without the consent of the Holder. Each of my clients
at paragraph 16 of their affidavits assert they have not consented. So, your Honor, I understand the issue that you have raised, but that's not the problem of the Court. That's the
problem negotiated in the indenture by the parties, which is noteholders have their right to enforce the payment. And, if
they decide to file bankruptcy because the dominoes fall, so be it. That is their right. That is our -- I don't even view it
as a risk, I view it as -- I wouldn't -- I wouldn't mind having this business under the auspices of a Court to make sure assets are not disappearing. But until that happens, we're not going
to file an involuntary petition at the moment against this company. But the fact of the matter is, that they have the They have
right to file bankruptcy to protect their assets.
the right to file bankruptcy to get a committee appointed to negotiate the type of deal they are trying to do informally. They haven't done it. So this, in all due respect, is not a bankruptcy Court. You have a motion before you for summary judgment. And I submit there is no double
There is no travesty.
jeopardy, if you will, on the payment. Why is that? Well, the letters your Honor, that were
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submitted to the Court -- and Mr. Samberg got copies of everything here. First of all, the participants, First
Clearing and Merrill Lynch, under a medallion stamp guaranteeing the signature of that entity of First Clearing and Merrill Lynch, sent letters to DTCC attesting to the fact that their customers, in this case Mr. Meixler and Trondheim, held securities in a specified amount for Suntech. commencement of the action. Identified the
And, under the rules of DTCC which
the company subscribed to by utilizing DTCC, agreed to indemnify DTC if the information in fact set forth in their representations to DCC were not accurate. In reliance upon
that normal business practice DTC, through CEDE & CO. acknowledged that Mr. Meixler and Trondheim were Holders and specifically authorized them to prosecute the action and enforce the payment of the note. Seems to me, your Honor, that if Suntech decided, okay, you know what, you guys are too small to bother with, we're going to pay you and make you go away, it would be hardpressed for CEDE & Co. to say, oh, you have to pay us too. They have an admission here that they have directed the company to pay somebody else. So I do not see, for the life of me,
what the issue is of this travesty and double jeopardy on a payment. If what we are talking about are formalities of
releases, this is the process that the company and parties that do this have ascribed to, and this is what we have followed. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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And, pointedly, this is what the Court in Applestein, Second Circuit 415 F.3d 242 addressed and specifically found that these proxy statements are proper, appropriate, admissible evidence for standing. Once we have that, everything else is noise. everything else just goes away. the payment. Your Honor asked about cases, because a lot has been made of the issue of 3213. Is it proper. Is it improper. Because there is no defense to
Again, I think it's irrelevant under Valley National because, really, what the Court is faced with is a motion for summary judgment. But to the extent the Court was interested,
in our reply brief we cite, at pages 4 and 5, New York State cases which stand for the basic proposition, and I quote, your Honor: 3213 may be utilized to enforce any instrument for the
payment of money only, and is not limited to negotiable and nonnegotiable paper within the terms of Article III. have several cases we cite. We then
These cases refer to guarantees,
certain indemnities which, on their face, say pay. So, the fact of the matter is that the indenture stands a foot high, is irrelevant. document. Yes, it is a complicated We're not
But we're not suing on any conditions.
suing on breaches of covenants.
At this time, post maturity,
it's an absolute unconditional obligation to pay a sum certain. We have submitted the affidavits of Mr. Peterson. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 And
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I think the Court -- and I'm not going to belabor it -- has identified the fact that these are uncontested affidavits. attempts to go behind them are silly, frankly. The summary, I will tell the Court, on the Peterson affidavit, is a one-page summary which summarizes the sheets behind them, which are the trades, which aggregate the $500,000. Its annexed to an affidavit. The Court sees those The
things all of the time. With respect to the Meixler affidavit, they are not being consistent. The second page of the trade confirmations
dated May of 2013 clearly indicates the acquisition of 50,000 face dollar shares or amount of the notes. That's it. The
other was background for the ins and the outs of the account. We wanted it to be as complete as possible. created confusion. I apologize if it
The May 30th date, as set forth in Mr. It shows CD &
Meixler's affidavit, is the only relevant one. Co. has acknowledged that.
The company has said to the Court,
as said in its papers, the only entity it needs to deal with is CD & Co. If it is good enough for CEDE & Co. it should be good
enough for Suntech. Thank you, your Honor. MR. SAMBERG: and that's -MR. DUGAW: reply. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 Your Honor, I would also like to make a May I have a moment for a couple points,
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THE COURT:
Mr. Dugaw comes next. Yes, sir.
Yes, Mr. Dugaw. Yes, your Honor.
MR. TEITELBAUM:
I concur with Mr. Teitelbaum's arguments that the defendants arguments are all essentially red herrings. The
documents submitted in my case, I certify that they come from the personal business records of my wife. And I have also The Court is
submitted a copy of our marriage certificate.
clearly aware of the nature of the law in California. The trade confirmation and partially-redacted account statement, the account statement shows the current condition as well as the letter from CEDE & CO. I certainly was never Prior to
contacted to participate in any negotiations.
speaking with Mr. Samberg, after this action was already filed. And I would point out to the Court, that Mr. Samberg, as he mentioned, invited my wife and I to participate in the negotiations and, yet, questions whether or not we're Holders of the notes, which is nonsensical. At any rate, Mr. Trondheim, I think eloquently described my wife and my exact position. And we would like the
Court, again, to grant summary judgment in our favor. THE COURT: Thank you. For what it's worth, I didn't say it,
MR. TEITELBAUM:
but we would obviously object to delaying this further with SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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discovery.
We don't think it is appropriate, and we would ask
the Court to rule on the motion. MR. SAMBERG: Your Honor, two quick points and I won't
take up more of the Court's time. I just point out the obvious, that a motion for summary judgement -- in a motion for summary judgment, the evidence is treated as if it were submitted for trial. With
the exception that any doubts, any ambiguities, any questions with regard to that evidence must be resolved in favor of the defendant. In this case, take for example the letters, which seem to be perfectly correct, formal letters on their face, it's not the first time that we've ever seen such documents. would not admit them into evidence, for two reasons. Number one, the plaintiffs have not laid a foundation for authenticity; number two, since they are submitted for the truth of their content, they are hearsay and they are inadmissible in the absence of a foundation for a business records exception, and the plaintiffs have not done that, either. All of this is to say that in the case of a Rule 56 summary judgment motion, I doubt that this Court would ever permit such a motion to be made before any opportunity for discovery, whatsoever. In order to be able to establish But you
whether there is a credible dispute regarding material fact, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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which is a phrase that Mr. Teitelbaum adopted, that is determined by federal courts in New York after the parties have had an opportunity to take discovery. We are not asking on As I
behalf of defendant for a prolonged period of discovery.
mentioned earlier, we just want some period of discovery so that we can defend ourselves. And we suggest, and request, 60
days for that purpose, considering the nature of the discovery that would be required, and the geographic spread of the parties that would be subject to that discovery. Thank you, your Honor. MR. TEITELBAUM: quickly. Your Honor, just briefly, very
If the Court were so inclined, I just want to put on
the record that we think this discovery request is so frivolous that I believe, as Judge Griesa has held in a prior case involving the Argentina bombs, the question becomes who is going to bear the costs of this. And I think what this is is
the 800 pound gorilla trying to beat up the little guys in delay. And we would respectfully put on the record we would Because if what I'm hearing
believe we would seek sanctions.
is they are challenging the authenticity of the CEDE & Co. documents, that is sanctionable conduct, your Honor. that with hesitation. But it is outrageous. And I say
Because these
people are sophisticated.
They know what that document is.
And in fact one of those documents was signed by Mr. Hemsley, the very affiant they relied upon in their own papers. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 And now
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they are challenging that document? THE COURT:
It is outrageous.
Mr. Hemsley is -Signed one of the DTC letters that we
MR. TEITELBAUM: received.
And he also signed ECF docket number 9, which
identified the participants in a pleading filed by the defendants here in opposition. So it is outrageous that they
would stand here and say they need discovery on the authenticity of those documents. know Mr. Samberg has. And I've tried cases. And I
And I know parties stipulate all of the
time to authenticity of documents, and don't put other parties or the Court through the burden of the game and the show of authenticity when there really is no dispute. delay, and to beat up the little guys. Thank you, your Honor. MR. SAMBERG: Your Honor, if I may take a moment. This is just
On behalf Suntech, I absolutely resent that last remark. it. But the question, the rules of evidence, generally, do not only include authenticity, but hearsay. And in addition, I'm going to put that aside, and I'm going to ignore
to the extent that defendant has submitted any paper from third party, that paper has been authenticated by a certificate by that third party, so that it could be admissible into evidence. Rules of evidence do mean something, especially in this Court. And we rely on them, in part, in addition to the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300
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substantive points as to, as I pointed out earlier, there are questions with regard to who is entitled to be a claimant in this case, and by what right. And we feel that Suntech is
entitled to make that examination, to get that right, before any judgment is issued in this case. Thank you, your Honor. MR. DUGAW: THE COURT: MR. DUGAW: If I may, one, very quickly -Yes, Mr. Dugaw. The rules of evidence to which Mr. Samberg And
alludes are not used to block the truth, but to seek it.
in this case, all of the evidence that I presented and that Mr. Trondheim's clients have presented is clearly self-authenticating. came from. There's a clear paper trail on where it And I
There can be no dispute that it's genuine.
would concur with Mr. Trondheim's objection to any discovery in this case. THE COURT: Well, this is September 12. These
documents were submitted, at the latest, in Mr. Dugaw's case on September 3rd. that. I think there has been adequate time for Mr. Samberg to call and determine whether the letters were actually sent by CEDE & Co, by Depository Trust Company, by Ameritrade, or any of the other persons herein. And, under those circumstances, I am going to grant SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 And in Mr. Teitelbaum's case, earlier than
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the motion of the plaintiffs, and by Mr. Dugaw. I'll ask that the plaintiffs submit a judgment, on notice to the defense, within three days, so that -- notice with three days notice to the defendants of the submission of the judgments. Is there anything else to take up? MR. TEITELBAUM: MR. DUGAW: No. No, your Honor, thank you very much. Thank you, your Honor. The order of the Court is the Or should we
MR. TEITELBAUM:
transcript, we'll just submit the judgment.
submit a separate order granting the motion, and then the judgment. THE COURT: Well, I'm going to grant the motion. You
don't have to -- it's on the record here, but you do have to submit a judgment. MR. TEITELBAUM: THE COURT: MR. DUGAW: THE COURT: (Adjourned) We'll do so. Thank you, your Honor.
All right. Thank you, your Honor. Thank you.

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Case 1:13-cv-04668-RPP Document 19

Filed 09/30/13 Page 1 of 71

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

Case 1:13-cv-04668-RPP Document 19

Filed 09/30/13 Page 2 of 71

Your Honor, Gilbert Samberg for And, David Barres of my

defendant, Suntech Power Holdings. firm, as well. THE COURT:

Mr. Barres, is that right?

MR. SAMBERG: THE COURT:

Yes, your Honor. Just want to be sure I'm

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

Case 1:13-cv-04668-RPP Document 19

Filed 09/30/13 Page 3 of 71

Thank you. Jay Teitelbaum, for

Again, good morning, your Honor.

And I'm just raising that only because Mr. Dugaw is

Case 1:13-cv-04668-RPP Document 19

Filed 09/30/13 Page 4 of 71

The note is matured.

They acknowledge there is a

And they acknowledge that payment

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

Case 1:13-cv-04668-RPP Document 19

Filed 09/30/13 Page 5 of 71

It says you pay on

So we're not talking about a covenant breach,

The maturity date is not in

payment on March 15. before this Court.

There is no dispute that we're properly

New York law applies, although -- even

Case 1:13-cv-04668-RPP Document 19

Filed 09/30/13 Page 6 of 71

We're suing on a sum certain, based upon an We're not

We are not saying you have

Case 1:13-cv-04668-RPP Document 19

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SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

Case 1:13-cv-04668-RPP Document 19

Filed 09/30/13 Page 8 of 71

Case 1:13-cv-04668-RPP Document 19

Filed 09/30/13 Page 9 of 71

Those are parties that are

So I can appreciate the

Case 1:13-cv-04668-RPP Document 19

Filed 09/30/13 Page 10 of 71

MR. TEITELBAUM: section 2.15. THE COURT:

I have that. Second paragraph, Members.

MR. TEITELBAUM: THE COURT:

about midway through after the word procedures.

is no ellipsis in their papers.

They failed to go on and quote And

the rest of that paragraph, which expressly provides that.

Case 1:13-cv-04668-RPP Document 19

Filed 09/30/13 Page 11 of 71

MR. TEITELBAUM: indenture, Section 2.15. THE COURT:

I've got it. That paragraph, your Honor, together

MR. TEITELBAUM: Honor, page 1. THE CLERK:

What agreement is that? I can hand it to the Court.

MR. TEITELBAUM: THE COURT:

No, I would like to find it in the papers,

so I can reference it. MR. TEITELBAUM: It is at the back of the indenture, It is

It is, I believe, the first exhibit

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

Case 1:13-cv-04668-RPP Document 19