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Testimony · Feb. 4, 2020

Probate hearing transcript for Jeffrey Epstein's estate, February 4, 2020

Transcript of the Virgin Islands probate hearing on Epstein's estate, with counsel for claimants and co-executors arguing motions on appraisers, fees, and accountings.Machine-written summary

march 01. 2022 05:36 ex

52-2021-RV-00005

TAMARA CHARLES

CLERK OF THE COURT

Exhibit 1

IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS Division of St. [REDACTED] /St. John _____ 0

In the Matter of the Estate of: ) ) PROBATE CASE ) ) NO. ST-19-PB-0080 ) ) ACTION FOR TESTATE ) ADMINISTRATION _____ Deceased. ) _____ )

Official Transcript FEBRUARY 4, 2020

BEFORE: THE HONORABLE CAROLYN P. H. PERCELL Magistrate Judge Presiding

APPEARANCES: ARIEL [REDACTED], ESQ., PAMELA TEPPER, ESQ., Assistant Attorneys General Department of Justice GERS Building, Second Floor St. [REDACTED], Virgin Islands { On Behalf of the Government }

COPY

William Blum, Esq. [REDACTED] Kroblin, Esq. Marjorie Whalen, Esq. Shari D’Andrade, Esq. Andrew Tomback, Esq. Daniel Weiner, Esq. {On Behalf of the Co-Executors }

APPEARANCES (Cont’d) Douglas Chanco, Esq.

{On Behalf of Jennifer Araos}

Kevin D’Amour, Esq.,

(On Behalf of

Jane Doe 1,000 and Jane Doe 1

Richard Bourne-Vanneck, Esq.

(On behalf of Tela

John Benham, Esq.,

{On Behalf of Jane Doe}

Melody Westfall, Esq.,

(On Behalf of Claimants

Jane Doe 1-12}

Sean , Esq.,

(On Behalf of Anonymous Claimants

I -N-D-E-X

Motion Re: Appointment of Appraisers12
Mbtion Re: Appointment of22
Motion Re: Fee Applications36
Mbtion Re: Quarterly Accountings49
Criminal Activity Lien Notice63

WITNESSES DIRECT

Jordana Harris[REDACTED]…103
Kenneth Feinberg…158

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THE COURT: Good morning.

THE CLERK: Good morning. Probate calendar for Monday, February 4, 2020. Case Number 1, in the Matter of the Estate of Jeffrey Epstein, ST-19-PB-80.

THE COURT: Counsel.

ATTORNEY BLUM: Good morning, Your Honor. My name is Attorney William Blum. I’m Counsel for the Co-Executors of the estate of Jeffrey Epstein. I am accompanied today by Co-Counsel, Kroblin, Marjorie Whalen sitting at Counsel’s table, as well as Shari D’Andrade sitting behind. Two mainland attorneys who have been admitted pro hac vice in this matter, Attorney Andrew Tomback at the end and Attorney Daniel Weiner.

If it please Your Honor, I would like to start by —

THE COURT: Attorney Blum, before you proceed, first off, Good morning to you. Good morning to Counsel. Do we have the pro hac admission documents to file with the Court? I’m going to ask that they be filed with the Court.

ATTORNEY BLUM: We’ll do so, Your

1 Honor.

2 3 THE COURT: Well, they can just be filed in due course.

4 ATTORNEY BLUM: Okay.

5 6 7 8 9 10 11 THE COURT: Let me just first explain how we are going to work these proceedings today because this is an unusual probate proceeding, the Logistics of how Counsel is to come forward to address the Court. The estate counsels have been seated at Counsel’s table.

12 13 14 15 16 17 18 19 20 What I am now going to ask is that Counsel for other parties come to the podium, identify themselves by names and their client. Then I’m going to ask you to return to the gallery. There are numerous motions before the Court pending for today. I put them in categories to be dealt with. It made sense to me to categorize the motions because it seems they fit into categories in my thinking.

21 22 23 24 25 As the motions are called by category, Counsel would then indicate, after the Estate has made its arguments to the Court, if Counsel wishes to be heard, by indication raise your hand and you come

1 2 3 4 5 6 forward. That is the only way the Court can see how we are going to get through this today to allow everyone to have an opportunity to address the Court on the different issues. Fair enough to everyone present in the courtroom?

7 8 ATTORNEY BLUM: Thank you, Your Honor.

9 10 11 12 THE COURT: Yes. Okay. Counsel for claimants or other persons interested in the estate, one at a time—I don’t know how we are going to do this.

13 14 15 ATTORNEY CHANCO: Good morning, Your Honor. Douglas Chanco here today on behalf of Claimant Jennifer Araos.

16 17 18 THE COURT: Attorney Chanco, are you an attorney licensed here in the Virgin Islands.

19 ATTORNEY CHANCO: Yes, .

20 21 THE COURT: Never met you before. Please to meet you, Sir.

22 ATTORNEY CHANCO: Thank you.

23 24 25 THE COURT: Do you mind spelling your name for the Court so that Madam Clerk could have everything correct there.

ATTORNEY CHANCO: Absolutely. D-O-U-G-L-A-S. C-H-A-N-C-0.

THE COURT: And you represent which claimant?

ATTORNEY CHANCO: Jennifer Araos. A-R-A-O-S.

ATTORNEY D’AMOUR: Good morning, Your Honor. Kevin D’Amour. I’m here on behalf of—

THE COURT: Attorney D’Amour, Good morning.

ATTORNEY D’AMOUR: —five different claimants. I’m also here with two of the state side Counsel that at some point may want to address the Court, if they are permitted.

THE COURT: Have they been admitted?

ATTORNEY D’AMOUR: They have not been admitted but their application is pending.

THE COURT: Without the admission, I don’t believe they can address the Court. They can address the Court through you, attorney.

ATTORNEY D’AMOUR: I understand, Your Honor. Our claimants are , and a claimant who has been identified as a Jane Doe 1,000.

Our other claimant —one moment — is also identified as a Jane Doe but all the cases are pending in the Southern District of New York. Thank you, Your Honor.

THE COURT: Thank you, attorney D’Amour.

ATTORNEY WESTFALL: Good morning, Your Honor.

THE COURT: Good morning. ATTORNEY WESTFALL: I’m Melody Westfall of Westfall Law based in St. Croix, admitted in the Virgin Islands.

THE COURT: Melonie? ATTORNEY WESTFALL: Melody.

THE COURT: Melody. ATTORNEY WESTFALL: Melody

Westfall. W-E-S-T-F-A-L-L. I’m here on behalf of Claimants Jane Doe 1 through 12. Nine of those twelve have filed a Complaint in Supreme Court in New York by Jordan Merson, of Merson

1 2 Law, PLLC, and we will be submitting his pro hac vitae application.

3 4 THE COURT: Have you filed a notice of appearance with this Court?

5 6 7 8 9 ATTORNEY WESTFALL: On Friday we filed the motion to proceed anonymously and a notice of claim, and a claim for unliquidated— for damages and on Monday, yesterday, we filed a motion to intervene.

10 THE COURT: In which District?

11 12 13 ATTORNEY WESTFALL: We filed it in St. Croix and they told us they would go over the documents.

14 15 16 17 18 19 THE COURT: It hasn’t made it to the Court’s file; it hasn’t made it to my file. When you say in St. Croix, you were not one of the names that was relayed to me this morning so I don’t have any of your documents before me at this time.

20 ATTORNEY WESTFALL: Thank you.

21 THE COURT: All right.

22 23 ATTORNEY : Good morning, Your Honor.

24 THE COURT: Good morning, Sir.

25 ATTORNEY : Sean . I

1 2 3 represent approximately two dozen victims of Jeffrey Epstein, and we have filed a motion to proceed anonymously in this matter.

4 5 6 7 8 9 10 11 12 THE COURT: Okay. Good morning, Attorney ATTORNEY : Good morning, Your Honor. Ariel , Virgin Islands Department of Justice on behalf of the Government of the Virgin Islands. Before the Court we have a motion to intervene with a number of exhibits, but that is the only actual motion pending before this Court. Thank you.

13 14 THE COURT: Okay, Attorney Good morning.

15 16 17 18 19 ATTORNEY TEPPER: Good morning, Your Honor. Pamela Tepper, representing the Government of the Virgin Islands and as Co-Counsel has already stated, we have a motion before the Court.

20 21 THE COURT: Good morning, Attorney Tepper.

22 23 24 25 ATTORNEY BOURNE-VANNECK: Good morning, Your Honor. Richard Bourne-Vanneck on behalf of claimant Tela . I’m admitted to practice in the Virgin Islands.

THE COURT: Yes, Attorney Bourne-Vanneck. Good morning to you.

ATTORNEY BOURNE-VANNECK: Thank you.

Attorney Benham good morning, Your Honor.

THE COURT: Good morning, Attorney Benham.

ATTORNEY BENHAM: John Benham of the law offices of John H. Benham, PC. Yes, I am admitted to practice in the Virgin Islands.

THE COURT: Yes, Attorney Benham.

ATTORNEY BENHAM: I have appeared and I’m proceeding anonymously for Jane Doe. We have filed a creditor’s claim combined with a motion to proceed by pseudonym that was filed on December 19th and it does appear on the docket. I have a copy of the docket sheet.

THE COURT: All right. Thank you. Has the Court now heard from all counsel who would like to be heard this morning?

The first motion that the Court will consider is the Motion For Appointment of Appraisers for real properties located in New

1 York, New Mexico and Florida.

2 3 4 5 6 7 8 9 10 This is a motion filed by the estate by the Co-Executors where they move the Court to appoint appraisers pursuant to Rule 12 A of the Virgin Islands Rules of Probate and Fiduciary Proceedings to appoint appraisers in the jurisdictions of New York, New Mexico, Florida to appraise the real property that may be of interest to this estate. Counsel?

11 12 ATTORNEY WHALEN: Good morning, Your Honor.

13 THE COURT: Good morning.

14 15 ATTORNEY WHALEN: The estate filed a—

16 THE COURT: Just state your name.

17 18 19 20 21 22 23 24 25 ATTORNEY WHALEN: My apologies. Marjorie Whalen for the executors of the estate. The estate filed a motion for appointment of appraisers on January 17, 2020. This is a motion, Your Honor, to appoint three appraisers for three properties in three jurisdictions, in Florida, New Mexico and New York. Each of the three proposed appraisers have executed and submitted affidavits to the

1 2 3 Court affirming that they are competent and qualified appraisers and that they are licensed in their jurisdictions.

4 5 6 7 8 9 10 The first appraiser is Bryan J. Rogers and he is proposed to appraise two properties in New York. He is a licensed appraiser and is Senior Vice President at , Samuel, Inc., which is a New York based Real Estate Appraisal and Consulting firm.

11 12 13 14 15 16 And the second appraiser is Jim Connolly, and the executors seek his appointment to appraise real property in New Mexico. Mr. Connolly is a licensed appraiser as well and has also submitted his affidavit affirming his experience.

17 18 19 20 The third proposed appraiser is Michael R. Slade and the estate seeks to appoint him to appraise the property in Florida.

21 22 23 THE COURT: Are you completed with your argument or your information to the Court?

24 25 ATTORNEY WHALEN: Yes. We have submitted the affidavits and I believe we

1 2 3 4 submitted everything needed to appoint these appraisers and we have not received any objection or opposition to our request for their appointment.

5 6 7 8 9 THE COURT: Let me see if there is any Counsel who wishes to address that motion for appointment of appraisers for real properties located in New York, New Mexico and Florida?

10 11 ATTORNEY : I would like to —

12 THE COURT: Attorney

13 14 ATTORNEY : Good morning, Your Honor. With regard to the motion —

15 16 17 18 THE COURT: Just identify yourself. All Counsels, when you come to the podium, again, identify yourselves by name, please.

19 20 21 22 23 24 25 ATTORNEY : Okay. Attorney Ariel on behalf of the Government of the Virgin Islands. With regard to the motion that was made earlier before the Court and filed prior to that, one of the questions we would ask the Court to inquire of the executor who owns the properties from which they’re

1 2 3 4 seeking the appraisal and what interest do they represent in the estate because that was not clear from the motion nor the representations before this Court.

5 6 7 8 9 10 11 12 13 14 15 16 17 18 THE COURT: Okay. Attorney and Attorney Whalen, Attorney has nailed what this Court, the concerns this Court has concerning that motion - is that you are seeking for the court to appoint appraisers located in these jurisdictions. As I have it in the petition that was filed, petition for probate and for letters testamentary, The estate of Jeffrey E. Epstein does not own any real property. It’s set forth —and I know this is the initial petition, but it’s set forth that these properties in question are owned by corporations for which the decedent may have owned shares in the corporation.

19 20 So, the question would be: What is it that we are seeking to value?

21 ATTORNEY : That’s it.

22 23 24 25 THE COURT: Is it the real property or is it the shares, his ownership of the shares? And I would say because the Court has no jurisdiction over real property located

1 2 3 4 outside of the jurisdiction, that is why the Court usually does not have to appoint appraisers located in any jurisdiction other than the Virgin Islands.

5 6 7 8 9 And I know what you set forth as the proposed rates for these appraisers. This Court has a rate schedule for its appraisers that begins at $400 and does not exceed $450 for reports to be shared by two persons.

10 11 12 13 14 ATTORNEY : Your Honor, if I might add that the first quarterly accounting that was literally filed, I believe, either Friday or yesterday, reflects no real estate owned by the decedent.

15 16 17 18 19 20 21 22 23 24 THE COURT: And Attorney also, she is correct. In the first quarterly accounting filed with the Court, filed yesterday, the first quarterly accounting says real property, none, and it provides a schedule as to personal property and on that schedule, valuation is provided for all the corporate entities in which the decedent is alleged to have owned 100 percent and I have values for those.

25 So that’s what the Court would 1 2 3 4 5 6 believe the Court would need. What is the value of the shares held by the decedent - not to appraise the real property located in these jurisdictions because I would have no idea what is proposed by these appraisers is fair and reasonable. Attorney Blum.

7 8 9 10 11 12 13 14 ATTORNEY BLUM: Attorney William Blum for the Co-Executors of the estate of Jeffrey Epstein. Your Honor, the real properties that we are seeking to be appraised are each found in separate corporations that are Virgin Islands corporations. Those are the only substantial assets of each of those corporations.

15 16 17 18 19 20 21 22 23 24 25 So for us to be able to evaluate these stocks of these corporations, we need someone needs- to make a determination as to what is the value of the underlining real estate. Now if Your Honor is suggesting that we should make our own decision as to how to evaluate the property that’s owned by these corporations, we would do so and then we would use that as evidence of the value of the stocks and perhaps if required, we could have a separate appraiser who could affirm that

1 although it is sort of fairly obvious.

2 3 4 THE COURT: Well, Attorney Blum, I’m saying if the shares are what is owned by the estate —

5 ATTORNEY BLUM: Correct.

6 7 8 9 10 11 12 13 14 15 16 THE COURT: The V.I. Corporations, I’m assuming, they are still in operation and have corporate government, whether Officers, Board of Directors, continuing to function that— someone needs to make sure that their cell phone or whatever electronic device they have is turned off—it also would seem to me these corporations would have had annual reports, tax returns, something that would be able to value what the value of the shares held.

17 18 19 20 21 22 23 24 What I am addressing is the motion to appoint appraisers to appraise real property when I have the decedent does not own any real property and any appraisal that I sent or gave an order to would have been for real property located here in the Virgin Islands. So as it pertains to— Attorney

25 ATTORNEY : Yes, Your Honor.

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I would just ask, I think what is —Well, or what the Court may want to inquire of is which of the companies that was owned by the decedent own these real properties since that’s what they are suggesting is the case. That is not clear in the motion.

THE COURT: But it’s set out in the petition for probate: 10,000 shares of Maple, Inc., a U.S. Virgin Islands corporation which holds title to Nine East 71 Street, New York.

10,000 shares of Cypress, Inc., a U. S. Virgin Islands Corporation which holds title to 49 Zorro Ranch Road, Stanley, New Mexico;

10,000 shares of Laurel, Inc., a U.S. Virgin Islands Corporation which holds title to property located in Palm Beach, Florida;

999 shares of SCIJEP, a company which holds title to some real property located in Paris;

10,000 shares of Poplar, Inc., a U.S. Virgin Islands corporation which holds title to Great St. James Island.

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10,000 shares of Nautilus, Inc., a U. S. Virgin Islands corporation which holds title to Little St. James Island.

So it’s set out in the petition. So it would seem to me that’s what the Court — and in the petition and the filing, there was an estimated value provided for what those shares would be so the Court sees no reason, the Court would need to appoint an appraiser to appraise the real property. That information should be to be given by the corporation, the Officers, from whether your annual report to verify it, and in your quarterly accountings in the petition, we had values presented, the first quarterly accounting again has values presented so the Court will deny the motion for the appointment for the appraiser for the real property located in New York, New Mexico and Florida. So that motion is denied.

ATTORNEY BLUM: Your Honor, if I may, nevertheless, the estate will need to appraise those properties, at least for estate tax purposes in order to provide appropriate value for the estate tax returns.

THE COURT: The properties or the shares?

ATTORNEY BLUM: The shares of , the companies that owns the , that owns the real property. Those are going to be listed in the estate tax returns.

THE COURT: And I’m saying to you, these are corporations functioning—

ATTORNEY BLUM: Yes.

THE COURT: With Officers, Board of Directors who can do whatever is needed as a corporate structure to valuate the shares owned by its shareholders.

ATTORNEY BLUM: Thank you, Your Honor.

ATTORNEY : Your Honor, I would just say that this is kind of an extraordinary circumstance because it appears that in a number of these corporations the decedent was the sole shareholder and I’m concerned as to what that might suggest to the estate what they are able to do without input from the Court.

THE COURT: What I’m saying is I

1 2 3 4 5 6 7 have it that these are corporations. I’m assuming corporations that are operating according to Virgin Islands corporate law or any jurisdiction where they have been created. Corporations having a creation separate and apart from the shareholders or from the estate.

8 9 10 11 12 13 14 15 16 17 18 19 The estate is saying we own shares in these corporations. The Court at this point does not know how the co-executors are involved with the corporations. I’m assuming the corporations are operating separate and apart from the estate because they are corporations. Unless I have something different to inform me, I’m taking the decedent own shares in the listed corporations- whether he own 100 percent, it is still entities separate and apart from his estate. Okay, Attorney Blum?

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22 23 24 25 THE COURT: All right. Next motion that was filed on August 30, 2019. Motion for the appointment of a pursuant to Virgin Islands Rule of Civil Procedure 53 in which

ATTORNEY : Thank you.

ATTORNEY BLUM: Yes, Your Honor.

1 2 3 4 the Executors—co-executors move to appoint a , which in summary they set out to assist the Court with what they believe would be a complicated probate proceeding.

5 6 ATTORNEY KROBLIN: Yes, Your Honor.

7 THE COURT: Attorney Kroblin.

8 9 ATTORNEY KROBLIN: Thank you, Your Honor.

10 11 THE COURT: I said your name but for the record.

12 ATTORNEY KROBLIN: Yes.

13 14 15 16 17 18 19 20 21 22 Kroblin on behalf of the executors of the estate of Jeffrey Epstein. Your Honor, we submitted this motion in anticipation of this estate involving much more work than the average estate pending before this Court and in particular to deal with a couple of issues, one of which —and an important one —is dealing with administrative costs of the estate, particularly attorney fees that needs Court approval.

23 24 25 We’ve submitted now four different fee applications and we have, I believe, two more that will be filed this week 1 2 3 and another one or two next week. So that brings it to about a total of eight fee applications and they are ongoing.

4 5 6 7 8 9 10 11 12 13 For a little background, Your Honor, we have not addressed yet, there are numerous lawsuits pending in the United States. There are some 32 Plaintiffs that have filed suits in different lawsuits and we have retained, the estate has retained Counsel traveling to represent the estate in the defense of those lawsuits, most all being filed in New York at this time and some other ones.

14 15 16 17 18 19 20 21 22 So Your Honor, the estate has urgent need to appear in these matters and defend the matters. They are currently, you know, in progress. I guess at this junction none of them have really gone to the discovery phase yet but we understand if they were to go under discovery which is imminent, that the costs would skyrocket for the representation of the estate.

23 24 25 So the need to timely approve the fee applications, we find to be highly important particularly with the number of

1 2 3 4 5 6 7 8 9 10 lawsuits pending and the matter of attorney fees the estate has sustained in defense of these lawsuits. That’s the reason we’ve asked that the Court consider the appointment of a to assist with those fee applications and he may also be able to potentially assist with other issues the Court may have or want to refer to the . We’ve proposed Britain who is here in the courtroom with us today.

11 THE COURT: Attorney

12 13 ATTORNEY : Yes, Your Honor.

14 THE COURT: Good morning, Sir.

15 16 17 ATTORNEY KROBLIN: And Your Honor, he is the oldest practitioner in the Virgin Islands Bar currently.

18 {Laughter}

19 20 21 22 23 THE COURT: Oldest practitioner? I don’t think that is what you want to say, sir. He might be the longest serving practitioner. I think that is what you want to say, the longest practice.

24 25 ATTORNEY KROBLIN: That is correct, That is correct. And Your Honor, he

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 is, you know obviously, he has many years of experience, and has been more recently a partner in a large firm in the Virgin Islands and he is used to dealing with you know, engagement of attorneys and fee applications and knows how they are submitted under the Virgin Islands Court rules and we submit that he would be of assistance to the Court to prepare reports for the Court’s consideration, you know, to review the fees, all the entries, the rates, and make a recommendation to Your Honor that may assist in moving these fee applications along so the Court can’t be bogged down with that. We know there are many more other complicated issues that this Court is going to have to deal with and that are being presented in this estate and we think that it would be of great assistance to the more routine fee applications to have assistance.

21 22 23 24 25 We filed our application pursuant to Virgin Islands Rules of Civil Procedure 53 which we believe the probate rules allow to look to the Rules of Civil Procedure when there’s no rule on point in the 1 2 probate rules. Rule 53 lays out the requirements for the appointment of a

3 4 5 6 7 In particular, Rule 53 authorizes the appointment of a to address pretrial and posttrial matters that cannot be effectively and timely addressed by an available Judge or Magistrate Judge.

8 9 10 11 12 13 14 Your Honor, we believe that this would help address this aspect of the case and move the fee applications along, some of which have been pending for sometime now. Particularly the Troutman Sanders fee application. There are two now pending with a third on its way.

15 16 THE COURT: Let me ask you this, Attorney Kroblin.

17 ATTORNEY KROBLIN: Yes.

18 19 20 21 THE COURT: What fee application comes before this Court? Which are the ones that have been presented to this Court sitting in probate?

22 23 24 25 ATTORNEY KROBLIN: I believe any- the Court’s order, when the initial order was entered, required that all estate attorney fees be approved by this Court.

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THE COURT: Estate attorney fees?

ATTORNEY KROBLIN: A-hem.

THE COURT: Estate attorneys.

Who are the estate attorneys? What law firm is the estate attorney?

ATTORNEY KROBLIN: Well, Your

Honor, my law firm, of course, is representing the estate and the administration of the estate but with regard to the lawsuits filed in New York, the co-executors have been sued on behalf of the estate, essentially. They have been sued in a number of lawsuits and those co-executors have gone out and retained Counsel to represent them in the lawsuit, to represent the estate in the lawsuit, and so we believe that those attorneys require approval of this Court to be paid. If they do not, then we’ve resolved an issue, Your Honor, but if they do and in an abundance of caution, we’ve asked, you know, for approval from Your Honor to not be in violation of the order.

THE COURT: All right. Thank you, Sir. Is there anyone wishing to be heard on the appointment of the

THE COURT: You know what. Also, I looked for the appointment of the to also assist in the settlement of claims, but wouldn’t that be addressed under that Voluntary Claims Program?

ATTORNEY KROBLIN: Yes, Your Honor, we filed the motion for the prior to filing the motion for that so we were unsure how things would necessarily shake out, if you will —

THE COURT: Okay. ATTORNEY KROBLIN: —in the Voluntary Claims Program, our motion, so we submit that if we do have a appointed, you know, it could possibly come into play at some point. It would be useful in assisting with that in some manner, but I think it would depend on how the Court considers to use the claims program and how it is actually structured and put together in the end.

THE COURT: Okay. Thank you, Sir. Attorney

ATTORNEY : Yes. THE COURT: Just again, identify yourself.

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ATTORNEY : Yes, I would, Your Honor. Ariel again on behalf of the Government of the Virgin Islands.

First of all, Your Honor, we have the utmost confidence in your ability to handle this probate estate.

THE COURT: I’m glad you do.

ATTORNEY : The utmost. You have had several years working in probate and you’re excellent in that particular area of law so we would object just on those grounds.

Notwithstanding that, we have some additional concerns. One, it appears that the estate is seeking to use the decedent’s estate to pay expenses that—let me rephrase this.

The Court is correct that the Court would evaluate fee applications relating to estate attorneys’ expenses. The expenses that they are seeking to have paid are relating to lawsuits which are not necessarily expenses that are in the ordinary course of the business or expenses that are directly related to the running and the preservation of the estate.

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So I think the proper course of action should have been when the lawsuits are filed, the Court needs to be immediately informed as to what is going on, a proper motion be brought before the Court and then they ask for the ability to retain Counsel as opposed to retaining Counsel and saying, Your Honor, we need to pay these fees.

We’re concerned about those types of actions without the Court’s authority— the Court’s permission being sought that would ultimately dissipate the estate prematurely without this Court having full knowledge of exactly what’s going on.

THE COURT: But wouldn’t the Court have knowledge because the executors are required to file quarterly accountings.

ATTORNEY : Your Honor, first of all, the executors have not even filed an inventory so at this point, as we sit here this morning, this Court nor the executors based on the first quarterly accounting, know exactly what the assets are within this estate.

THE COURT: And if I understand

1 2 3 4 5 it, they didn’t file the inventory because they were waiting for the appointment of the appraisers; they believed the appraisal was necessary. We do have the first quarterly accounting.

6 7 8 9 10 11 12 ATTORNEY : Well, Your Honor, if you look at what they provided as the first quarterly accounting, there’s a number of assets which they indicate to be undeterminable that are right after the statement that there’s no real property and then there’s a number.

13 14 THE COURT: Determined by appraisal.

15 16 17 18 19 20 21 22 23 24 25 ATTORNEY : Right, but those are assets that are related to personal property; meaning, watches, jewelry— not the real estate that they were suggesting as part of their earlier motion. So it’s a different evaluation that needs to be done to fully have the Court understand what this estate consist of. So we believe that the first quarterly accounting is premature and not complete. There are a number of issues with it that we can talk about when the Court gets to that

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motion. I don’t want to be premature with that but as far as a Special , we don’t think it’s necessary and we think that we have to be careful in this estate in having the executors make decisions about expending estate assets without previously seeking permission by the Court and it’s also clear in the quarterly accounting that they have already begun to do so.

THE COURT: Well, under the terms of the Last Will and Testament of Jeffrey E. Epstein dated August 8 of 2019 which was admitted into court at Paragraph C (1), “the testator specifically authorize his executors to appoint agents, attorneys of law, consultants, investment advisors and to pay for such services from the assets of my estate without obtaining judicial authorization or approval”. The testator specifically provided for that.

ATTORNEY : Your Honor—

THE COURT: Let me continue.

THE COURT: When the Court issued the order, the Court’s order, which is a

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 standing order issued in every estate provided that attorney fees should not be paid—and this was an order dated September 6 of 2019 —it provided that the co-executors shall not pay from decedent’s estate any attorneys fees or co-executors fees for services rendered to the estate without prior approval of this Court. It contemplates Virgin Islands Rule of Probate Procedure, Rule 18, that provides in part, Simultaneously with the filing of the final account, an administrator, executor or attorney shall make application to the Court for an award of fees and costs where appropriate for services performed in the execution or administration of an estate.

16 17 18 19 20 21 The fee petition shall clearly state the hourly rate for fees charged for services rendered, an explanation of the services provided and specific dates and time spent performing such service identified in the petition.

22 23 24 25 The Probate Court reviews the fees and expenses of probate counsel, estate counsel because that is the work that is before this Court— whether in filings to the

1 2 3 4 Court, appearances before the Court, so the Court can then make a determination whether the fees sought, and the time expended was reasonable given the nature of the estate.

5 6 7 8 9 10 11 12 13 14 15 16 17 18 This Court does not review as the co-executor who had the fiduciary duty to represent the estate and preserve and protect its assets, the Court does not then, when an executor has to hire a counsel for a civil proceeding, a counsel to represent the estate, say with the bank and a mortgage proposal, then say you have to now come in for me to review those fees because I don’t have that work before me to determine if it’s reasonable. It’s estate counsel the Court reviews the fee application of and that has been the practice of this Court, of the Probate Division.

19 20 21 22 23 24 25 ATTORNEY : I understand that, Your Honor. This particular case also presents a unique circumstance in that on January 17th, based on the filing of a CICO action there was notice given to the Probate Court with regard to the Government’s lien in an effort to preserve the assets of the estate 1 2 based on the pending CICO litigation. So I think that particular event —

3 THE COURT: Okay.

4 5 6 ATTORNEY : —changed, to some extent, the Court’s oversight over this estate.

7 8 9 10 11 12 13 14 15 THE COURT: And I agree and that is something we are going to have to flesh out if this hearing continues this morning—what now happens when now the Government having filed that lien, but to address that lien, correct, and to address whatever civil proceeding the Government is going to file, would not the co-executors have to retain counsel?

16 17 18 19 20 ATTORNEY : Well, the co-executors have been served and counsel for that proceeding has not made an appearance. So to that end, we can address it when the need arises.

21 22 23 24 25 THE COURT: Okay. I’m going to pick up the attorneys fees in this matter. I’m going to go to that now. And I have right now concerning the appointment of a and I understand what is set forth, I’m going to

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deny the appointment of the without prejudice. This Court, while there maybe quite a number of filings; it may be a different type of probate proceedings, I still see it as a probate where persons have to, the co-executors are going out to defend the estate but as a probate, filing the quarterly accountings, filing the inventory, keeping the Court apprised as to what’s going on. The Court is not going to intervene in what may be happening in New York. I have no authority to do that. The report would be mailed back to me that these matters have been settled.

Should we go and set up the voluntary resolution program, it would be settled from there. The co-executors have started to convert assets because they have the authority of law to do that. I see in the quarterly accountings notations that properties,vehicles may have been sold converted to cash; am I correct? and

ATTORNEY KROBLIN: Right.

THE COURT: As the co-executors, they have the authority by statute and by the decedent’s Last Will and Testament to do that

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and all they are doing is keeping the Court aware of where the assets are, how they are being used.

So the ruling on the is denied without prejudice at this point in the proceedings.

ATTORNEY KROBLIN: Thank you, Your Honor. If I may just for my client’s sake just so to make sure that I understand the ruling of the Court because the Order did say, “the co-executors shall not pay from decedent’s estate any attorneys’ fees and co-executor’s fees for services rendered to the estate without prior approval of the Court.”

Is it my understanding that we know that only applies to the firm representing the estate and these proceedings have not —

THE COURT: That have always been my understanding as a Practitioner in Probate when I practiced probate law and the time that I’m sitting on the bench because the Court cannot—I would tie your hands if each and every time you had to come before me to

1 2 3 ask, can this be done? You set forth here in the motion for approval for Trotman and Saunders.

4 5 ATTORNEY KROBLIN: Yes, Your Honor.

6 7 8 9 10 THE COURT: I believe he was retained during the decedent’s lifetime. If I understand the reading, the co-executors are seeking to pay for services that were rendered to the decedent; am I correct?

11 ATTORNEY KROBLIN: No, Your Honor.

12 THE COURT: Okay.

13 ATTORNEY KROBLIN: I’m sorry.

14 THE COURT: Okay. Let me hear it.

15 16 17 ATTORNEY KROBLIN: We did do that, Your Honor. We did make payments for services rendered during his lifetime.

18 THE COURT: Okay.

19 20 21 22 ATTORNEY KROBLIN: The only thing we’ve sought the Court’s approval for is after he died the services that were then retained by the co-executors to represent the estate.

23 24 25 THE COURT: But for matters when he was alive, he was facing, there was a federal—

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ATTORNEY KROBLIN: Uhmm—well, there was a—

THE COURT: Listen here. Don’t say no. Let me get it. United States versus Jeffrey Epstein, 19 Criminal 490 Southern District of New York. This is the motion for approval of payment of Steptoe and LLP, an Incorporated Memorandum of Law. During his lifetime he retained the law firm to provide necessary legal representation. Upon decedent’s death, the Federal criminal case proceeded until August 29th at 2019 and Steptoe’s representation discontinued shortly thereafter.

So then I have a fee affidavit for that, correct?

ATTORNEY KROBLIN: Yes, Your Honor.

THE COURT: So the decedent had retained him in his lifetime to represent him. He died. They continued representation. Now they’re seeking to be paid; am I correct as to that?

ATTORNEY KROBLIN: They’re seeking to be paid only for the post-death

1 2 fees incurred. The pre-death fees, the executors went ahead and paid.

3 4 5 THE COURT: Right, but now for what they did to bring this matter to conclusion, correct?

6 7 ATTORNEY KROBLIN: Correct, Your Honor.

8 9 10 11 12 THE COURT: I do not see that the Probate Court—this is not the kind of fees I’m reading that the Probate Court is said needed to come before the Probate Court for approval.

13 14 15 16 17 18 19 20 21 So as it pertains to the motion for approval of Steptoe and Trotman and Saunders—and again, Trotman and Saunders, then it was renewed with additional fees, and it is my understanding that Trotman Saunders, LLP, is representing the estate in New York for these numerous cases that have been filed by the alleged victims of sexual assault, correct.

22 23 ATTORNEY KROBLIN: Correct, Your Honor.

24 25 ATTORNEY : Your Honor, if I may just for clarification, I am not sure how

1 2 the legal fees requested by these firms are any different than creditors claim.

3 4 5 6 7 8 9 10 11 12 THE COURT: You know how they are different? I’m going to tell you. They are different pursuant to Title 15, Virgin Islands Code, Section 568, “an executor or administrator shall be allowed in the settlement of his account all necessary expenses incurred in the care, management and settlement of the estate, including reasonable attorneys fees and any necessary litigation or matter requiring legal advice or Counsel.

13 14 15 16 17 18 19 When we appoint executors or any person of fiduciary capacity, we want to make sure that this person can complete his or her fiduciary responsibilities to the Court. The person is given all rights to go and retain Counsel because the Court says he is taking an oath to protect the assets of the estate.

20 21 22 23 24 25 The fiduciary, the co-executor goes out and retains Counsel to litigate, to represent the estate - whether it’s in an automobile accident case, whether it’s in a mortgage foreclosure - wherever the estate is now being sued, and the Court says by statute,

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Virgin Islands law says the Legislature has determined that executor is allowed the attorney fees in the necessary litigation and where he needed the legal advice of Counsel.

Legal advice of Counsel was needed, is needed in these ongoing matters pending in New York. The executors, the co-executors have retained Counsel to represent the estate. I’m going to assume the co-executors is going to retain Counsel to represent the estate in the action the Government is going to file against them.

What the probate Court reviews is the expenses of probate administration, part of which includes, whether it’s paid to estate counsel - in this instance, the firm of Kellerhauls, right?

Before me I have a motion for approval of Kellerhauls, , Kroblin, PLLC, Interim payment application Number 1 in which they set out, which they are seeking fees where they provided to the estate in the administration of the probate estate from August 11, 2019 to October 31st of 2019. They are seeking for this Court to approve those

1 2 3 fees. Those are the fees that this Court has before it where they are required to set out the date, time, and service provided.

4 5 6 7 8 9 10 11 12 13 Now on review of these fees, which was provided to the Court by Order, they had to submit to the Court. Upon my review of these fees, I’m going to deny your motion for approval of these fees. Number 1, this Court does not enter interim orders for fees because then it requires the Court to be keeping an accounting system of what fees have been paid or not paid. This is three months. August 11th to October 31st of 2019.

14 15 16 17 18 19 20 21 22 Also, in your fee affidavit, Counsel is to provide date, time, service provided. When I opened what is termed a pre-bill, the bills are seriously redacted. I, as the Officer charged with reviewing this fee affidavit to determine if the fees are reasonable, cannot determine what services were provided by your law firm in the probate administration.

23 24 25 Let’s begin. September 23rd of 2019, attention to—redacted. Reviewed- redacted. What was reviewed? Legal research

1 2 3 4 5 6 7 and preparation of—redacted. Telephone conference with Co-Counsel reviewed- redacted. There are numerous redactions. How do I know was this work necessary for the probate administration customary that the Court would find needed for probate? You don’t provide the services provided.

8 9 10 11 12 13 14 ATTORNEY KROBLIN: And Your Honor, we would be happy to submit an un-redacted version for in-camera review. The reason it was redacted is because we believe that it contained attorney-client privilege information that we didn’t believe was appropriate to waive.

15 16 17 18 19 20 So Your Honor, we submitted it in a redacted form and we were going to request what the Court wanted, once we got some guidance on how the Court wanted to proceed on fee applications, to submit an in-camera un-redacted version.

21 22 23 24 25 THE COURT: Even if I wanted to approve this motion, I couldn’t. I don’t have information. I don’t know what you did on behalf of the estate because it’s struck out. How is it that I don’t understand

1 2 3 attorney-client privilege, research on probate procedures and you know what, that is your decision.

4 5 6 You understand why I am not going to approve this motion for interim fees at this time by your law firm.

7 8 9 10 11 12 ATTORNEY KROBLIN: Your Honor, if I may, I understand the Court’s ruling and I think we filed a motion for reconsideration on the interim payment of fees. We believe it has been done in the past in states we’ve represented.

13 14 15 16 THE COURT: I’m not saying it has not been done. I said this Court does not enter interim fee orders. This Court does not enter interim fee orders.

17 18 19 20 ATTORNEY KROBLIN: Okay, Your Honor. We respectfully will request to file a motion brief consideration on that ruling, but I understand your ruling.

21 THE COURT: You can do that.

22 ATTORNEY KROBLIN: Thank you.

23 24 25 THE COURT: And I’m going to tell you, doing this cursive review, I picked up one page, November 14 of 2019, I see one

ATTORNEY : Your Honor, one understand the Court’s position pursuant to

1 2 3 4 5 6 7 your reading of Virgin Islands law as to the attorney fees outside of the probate petition or the probate estate that would not require consideration by this Court but to the extent that even in this initial accounting, there are literally no vouchers, nothing to support —

8 9 10 11 12 THE COURT: And I will bring that up. I will bring that up when we get there. I know they filed the quarterly accounting —and I have a note that the quarterly accounting is deficient.

13 14 ATTORNEY : Significantly so, Your Honor.

15 16 17 18 19 20 21 22 23 24 25 THE COURT: And when co-executors file deficient quarterly accountings or are not doing their accounting work as the Court requires, the Court has a process in which the Court can remove the co-executors or in some way impose a penalty on the co-executors. The testator in his will provided for these co-executors to be paid executors fees. If the Court were to find the co-executors dilatory in their duties, the Court could reduce those fees or not award any 1 fees.

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So there are ways the Court can deal with co-executors or administrators who the Court does not believe is completing or fulfilling their fiduciary duties, but we are not at that point as yet.

Concerning the motions for Trotman Saunders and Steptoe , the Court does not believe it needs to approve those fees. Those attorneys are being hired to represent the estate in the civil proceedings. These matters are not before the Court. The co-executors have been charged with their fiduciary duties to preserve and protect the estate and that means taking on litigation, determining if they need to hire Counsel.

The only Counsel this Court reviews the application of is probate Counsel and then in your quarterly accounting everything will be set forth as to what is being expended. Persons can raise objections. Okay. Have we dealt with the fee Ap?

ATTORNEY KROBLIN: Understood.

THE COURT: Okay. Now what’s left before the Court—well, you know what? Let’s 1 2 3 4 deal with the quarterly accounting that was filed because then based again on how I put things in categories, the last category remaining will be this claims program, right?

5 6 7 8 9 10 11 12 13 Concerning the first quarterly accounting that was filed with the Court on August 31st of 2020, Counsel, again, as the Government have pointed out, the items listed, the need to be determined—it says, determine by appraisal and this first quarterly accounting covers August 10th of 2019 to December 31st of 2019. Right? It’s signed by the co-executors.

14 15 16 17 This is the problem I had when I reviewed it. Again, heavily redacted as to the bank statements. Then you have copies of checks I can’t even read.

18 19 20 21 22 23 24 25 Attorney Blum, do you see the First Bank, Voucher 1, First Bank. Attached is a check redacted as to who received $16,000. The text is so small, I cannot read them. And pursuant to Rule 5, each expenditure is to be supported by proper documentation. For example, we have the funeral expenses, correct?

ATTORNEY BLUM: Correct.

THE COURT: Let me get there.

Funeral expenses I guess this is to the home, 16,308, it doesn’t say what entity. Usually you would have then the supporting invoice.

ATTORNEY BLUM: Your Honor, to the extent that the vouchers are insufficient, we will be happy to re-submit.

THE COURT: Right. The

expenditures, specifically by that Rule 15, provides every expenditure or other disposition of assets must be supported by proper documentation. So, right, Co-Executors might have issued a check and then I see the check redacted as to who the check may have been made payable to you and no supporting documentation as to why the checks are issued. That is just one example. It’s very hard for the Court then to determine if these are probate related or justifiable expenditures by the estate. And I think that is the Government’s objection, the objection the Government has.

ATTORNEY BLUM: Your Honor, we believe when we prepared the vouchers that the 1 bank statements would be sufficient.

2 3 Obviously, the canceled check are difficult to read and probably —

4 5 THE COURT: Okay, you agree with me. I thought it was just me.

6 7 8 9 10 ATTORNEY BLUM: No, it’s difficult for me as well but we’d ask that we do need to redact account numbers which I assume is not an issue for the Court so long as it provides proper—

11 THE COURT: Well, you know what—

12 ATTORNEY BLUM: —detail as—

13 14 THE COURT: I’m going tell you this about—

15 ATTORNEY BLUM: —to the payees.

16 17 THE COURT: Sorry, not to over-speak you.

18 ATTORNEY BLUM: It’s all right.

19 20 21 22 23 THE COURT: At some point you are going to need to provide those account numbers because of the final adjudication. That is what we are adjudicating, if these accounts are still in existence.

24 25 ATTORNEY BLUM: We will do so to that extent, at the end.

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THE COURT: To the end, that’s fine.

ATTORNEY BLUM: We are just concerned about security with respect to this particular decedent.

THE COURT: That’s fine. I mean the only payee I can read here is the Government of the Virgin Islands on these checks. That is the only payee I can see there. I can follow the electronic fund transfers, say, I guess, to Verizon, ADT, and I guess may be just saying there’s ongoing with Verizon, whatever is needed for that, but some of these others, I can’t even see the amount.

So as far as this Court’s quarterly accounting, when would you be able to provide an appraisal as to the personal property listed?

ATTORNEY BLUM: We are still in the process, Your Honor, of hiring appraisers. There are a lot of very valuable assets in this estate and personal property that was owned by the decedent or his companies.

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Based on Your Honor’s ruling earlier, we will re-evaluate to the extent to which any of the personal property may have been owned by an entity, but to the extent that they were owned by the decedent, we are dealing with some valuable antiques and valuable jewelry and a lot of assets in a lot of places that we have located, but we still are having to employ appropriate appraisers to take care of that. We are in the process and we will continue to do so.

THE COURT: Attorney

ATTORNEY : Yes, Your Honor. Ariel on behalf of the Government of the Virgin Islands. In addition to the concerns that have been previously raised with regard to the lack of vouchers supporting the checks, I’d like to draw the Court’s attention to, in particular, the page that states—let me see if I can get it correct here—Your Honor, it says, statement of decreases due to sales, liquidation and payment of expenses.

THE COURT: What page?

ATTORNEY : It would be - when you look for the one that says Schedule

1 2 3 4 D, it purports to be, I guess an indication of expenses. After you go to Schedule D, you go to the third page in. The pages are not numbered so it’s difficult for us.

5 6 THE COURT: Yes, it’s very difficult. Guide me again.

7 Attorney Blum, are you there?

8 I have the Certificate of

9 10 11 Service. ATTORNEY : The Schedule C which is a statement of income collected.

12 THE COURT: Yes.

13 14 ATTORNEY : Okay. The next page after that was to be Schedule D.

15 16 17 THE COURT: Statement of decreases due to sales, liquidation and payment of expenses. Okay.

18 19 20 21 ATTORNEY : If you go to the third page in of that, so that first page is Schedule D and the second page and then you get to the third page.

22 THE COURT: Yes.

23 24 25 ATTORNEY : And this, of course, Your Honor, we have not had an opportunity since we literally received this

1 2 3 4 5 6 7 8 9 10 11 12 13 by mail yesterday afternoon at 5 O’clock when the other parties who are apart of the case received theirs by email earlier that day, so we did not even get the courtesy of a hand delivery or an e-mail, but notwithstanding that, in looking at that, you see two expenses - one for twelve million dollars to Southern Country International Limited; another one for 3.5 million to Southern Country International Limited. From what I understand, these are not attorneys so I’m not sure why they would be getting checks that total fifteen million five hundred dollars.

14 15 16 17 18 19 There’s no explanation for it with regard to Schedule F which is a couple of pages later and again, Your Honor, this is just a very quick review, we see there’s a statement of creditors claims that they say have been presented, allowed and paid.

20 21 22 23 24 25 Now deferring to the Court’s interpretation of 15 VIC 560 that relates to attorneys fees I would want to know what would be the authority for the executors to pay what they have even classified as creditors claims without the authority of this Court.

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THE COURT: The V.I. Statute.

Claims—

ATTORNEY : Well, I understand that—

THE COURT: You asked a question.

ATTORNEY : Right.

THE COURT: Claims presented to the executors are examined and if approved are paid by the co-executor. If rejected, then they come before the Court.

ATTORNEY : Yes, Your Honor,but I see three of these, a number of these claims are debt claims but there is a specific claim which is to the Epstein Virgin Islands Foundation doing business as Enhanced Education, where is the invoice or whatever to support that?

THE COURT: That is why I think I just talked to Attorney Blum and he indicated that he will provide the documentation. Just like you, I got this first quarterly accounting yesterday. Just like you, I picked it up and said, it does not provide the information necessary for the Court to determine if these expenditures are proper

1 expenditures.

2 3 4 5 6 7 8 I told Attorney Blum the rules require the documentation to be attached. So now he knows. He has to amend, this first quarterly accounting needs to be amended to provide the documentation to explain what has been paid. And that is all I can do at this point.

9 10 11 12 ATTORNEY : I understand that, Your Honor. I am just concerned about what would appear to be a course of conduct. That’s all I would just say to that matter.

13 14 15 16 17 18 19 THE COURT: Okay and now you are going to be copied on all the quarterly accountings. The Government has now filed its Criminal Activity Lien Notice, I believe, on the estate. So the estate now knows this affects everything going forward. Attorney Blum.

20 21 22 23 24 25 ATTORNEY BLUM: Just to re-confirm, Your Honor, we will amend the accounting and to the extent that there are issues, what we would suggest to the Court is that we could have a separate hearing with respect to approval of the accounting if it’s 1 necessary.

2 3 4 5 6 7 8 9 10 THE COURT: Well, the accounting is not approved as yet. You just continue to submit your accounting but you need to have— Attorney is correct, twelve million dollars. I mean—you know what? Given the size of this estate maybe that’s not significant. It’s still twelve million dollars to Southern Country International Limited with no information.

11 12 13 14 ATTORNEY BLUM: And the short explanation, Your Honor, is there was a mistake in deposit that was made and this was the reimbursement of that.

15 16 THE COURT: Reimbursement? So this money came back?

17 18 ATTORNEY BLUM: It came back, yes. I mean, you can see —

19 THE COURT: Where?

20 21 ATTORNEY BLUM: Right in the same spot you were looking at.

22 23 THE COURT: A check? You know what?

24 25 ATTORNEY BLUM: Two point six came in and 11 came in, and 12 came out and — -

1 2 THE COURT: You are right and then it became, it’s less.

3 4 ATTORNEY BLUM: Yes and that was one point eight.

5 THE COURT: But you see

6 7 ATTORNEY BLUM: You need more information, Your Honor. We understand.

8 9 10 11 THE COURT: If the documents were attached, it would have explained it. You are right, following this, it went in and came back.

12 13 14 15 16 ATTORNEY BLUM: Right. It was because of a mistake as to where the monies went and that is why it was corrected. Your Honor, we’ll provide that detail with the amended quarterly accountings.

17 18 THE COURT: Because it’s required. ATTORNEY BLUM: Of course.

19 20 THE COURT: It is required. By the probate rules, it’s required.

21 22 23 Anything else concerning the quarterly accounting and all quarterly accountings going forward.

24 25 ATTORNEY : Your Honor, I would just ask — Ariel , Government of

1 2 3 4 5 6 7 8 the Virgin Islands. I would just ask that we be able to brief the issues as they come up because, again, we have not had a real opportunity to do more than a cursory review of it and we’d like to be able to do that so any concerns that we have with regard to the first accounting which the Court has not approved, we’d like an opportunity —

9 10 11 12 THE COURT: We don’t approve the accounting. The attorney has said he is going to—and you raised concern — he is going to amend his quarterly accounting.

13 14 15 ATTORNEY : Your Honor, could you inquire as to when we would be able to expect that?

16 17 18 19 THE COURT: He is going to amend his quarterly accounting and timely file it as he is required to file quarterly accountings every three months.

20 21 22 23 24 25 ATTORNEY : Well, no. I understand that, Your Honor, but to the extent that the first accounting had some issues, is it going to be amended in a short period of time before the second accounting or is it going to be simply amended in the second

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accounting? I think we would want to have some clarification on that.

THE COURT: Attorney Blum.

ATTORNEY BLUM: Well, the latest would be by the second quarterly accounting.

THE COURT: That’s what I’m saying, quarterly accountings from the date of the appointment every three months thereafter.

ATTORNEY BLUM: Well, to keep it straight, we’ll amend this one and file the next one and if we can file the amended version of this sooner than the second one, we shall.

THE COURT: You know, Attorney

THE COURT: Probate may be different than other matters that you have been involved with. Okay. You have to give the time for the co-executors to gather the information to attach it. Now through Counsel, the co-executors are aware of what’s required. If they were not aware before, they are now aware of how to file a quarterly accounting and what documentations need to be attached.

1 Right. Rule 15.

2 3 4 5 6 7 8 9 10 And the consequences of failing to file your quarterly accountings as set out in Rule 16, in which I explained, they can be brought before the Court on a show cause, Attorney , and you can move for this Court to cause them to come before the Court to show cause if any, why they should not be punished for contempt of Court. That is always an option.

11 12 ATTORNEY : Thank you, Your Honor.

13 14 15 16 17 THE COURT: Okay. All right. The claims that have been filed, the Voluntary Claims Resolution Program and the Criminal Activity Lien notice filed by the Government. Attorney Blum.

18 19 20 21 22 ATTORNEY BLUM: I would like to call on attorney Andrew Tomback to address the Court and present testimony with respect to the Voluntary Claims Program, if it please Your Honor.

23 24 25 THE COURT: But, you know what? I don’t mean —and I see Attorney , I understand that Voluntary Claims Resolution

1 2 3 4 Program is what is being proposed by the estate to address these claims that are going to be filed in multiple jurisdictions, numerous of them pending in New York, right?

5 6 ATTORNEY BLUM: Correct. Most of them.

7 8 THE COURT: Most of them in New York. There’s also in Florida.

9 ATTORNEY BLUM: And Minnesota.

10 THE COURT: And Minnesota, right.

11 ATTORNEY BLUM: And we expect more.

12 THE COURT: And we expect more.

13 14 15 16 Let me summarize it —and everyone listen and if anybody has an objection to what I am going to say, then you can raise it.

17 18 19 20 21 22 23 How I read, all the persons who have filed claims through Counsel present here in this courtroom, they have, the claimants have no objection to the Voluntary Claims Resolution Program. Their concern is how much money is to be expended to set up this program.

24 25 I think it was Attorney Benham- is he still here? Do you see him in the

1 2 3 4 5 courtroom— who raised those concerns and said what are you going to do with the expenditures for rents, paying salaries, just the cost of setting it up. That was his concern, am I correct, Attorney Benham?

6 7 ATTORNEY BENHAM: Yes,Your Honor. Can I approach?

8 9 10 11 THE COURT: Yes. Well, you know what, cause I’m just doing a summary and I just wanted you to confirm and then I can let you approach to supplement.

12 13 Who opposed the claims program is the Government.

14 ATTORNEY BLUM: Right.

15 16 17 18 19 20 21 22 THE COURT: Because the Government, Attorney , listen and see if I’m correct— because the People have filed this Criminal Activity Lien Notice, and this lien notice is against the Estate of Jeffrey E. Epstein; Jeffrey Epstein; the 1953 Trust; Plan D, LLC; Great St. James, LLC; Nautilus, Inc.; Hyperion Air, LLC; and Poplar, Inc.

23 24 25 And reading what’s under the Statute, the Statute provides that on the filing of this lien, this is Title 14, Virgin

1 2 3 4 5 6 7 8 9 10 11 12 Islands Code, Section 610 “This lien shall commence and attach as of the time of the filing with the Criminal Activity Lien Notice and shall continue thereafter until expiration, termination or release. The lien created in favor of the Government of the territory of the Virgin Islands shall be superior to and prior to the interest of any other persons in the personal or real property or beneficial interest in, if the interest is acquired subsequent to the filing of the notice.”

13 14 15 So that all being said, with The People having filed their Criminal Activity Lien, hasn’t it put everything on hold?

16 17 ATTORNEY BLUM: It should not, Your Honor.

18 THE COURT: Tell me why not.

19 20 21 22 23 the probate addressed in very clearly if you need ATTORNEY BLUM: The reason is that code itself, which is not the Government’s papers, state —and I can find the cite for you it —

24 THE COURT: Yes.

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administration expenses of the estate have priority, virtually priority over everything else the estate needs to be administered. The problem that the executors will have is these liens are in fact defective which we believe they should not be and we will be asking Your Honor to either dismiss them or we will do so before Judge Dunston in the other matter under which they’ve filed the Complaint.

With out that, we question whether we can expend anything. We believe that that is not correct under Virgin Islands probate Code and that it is Your Honor who controls in every respect the co-executors actions with respect to what they expend and what they don’t expend and what they can not expend and that is the point that we will make in papers when we file them with respect to those liens.

THE COURT: Because now there’s a question because I have here— I know you’re pointing to Title 15, Virgin Islands Code, Section 421, preference in payments of claims and charges. Is that what you are talking about?

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ATTORNEY BLUM: That is correct.

THE COURT: In administration, funeral charges, taxes, expenses, debts preferred by law, debts which is the debt of the deceased were a lien upon his property of any rights or interest,debts to employees, all other claim against the estate.

Where would this lien, this Criminal Activity Lien fall, because they, by the statute, 14 VIC 610, if I’m reading it, everything has been locked down.

ATTORNEY BLUM: That was our first reading as well, Your Honor.

ATTORNEY BLUM: And that is our concern with respect to that.

THE COURT: Except may be for the basic administration of the estate but as far as it goes to settling claims because if that is— okay, the estate can continue to function.

ATTORNEY BLUM: Thank you.

THE COURT: I have no problems with that. If the estate has to pay taxes—Attorney , the estate has to pay 1 taxes, it pays its taxes, right?

2 3 ATTORNEY : That is correct, Your Honor.

4 5 6 THE COURT: If the estate has to— ATTORNEY : Pay its employees.

7 8 9 10 11 12 THE COURT: Thank you. Pay its employees; if the estate has to pay its attorneys, other than estate Counsel, because the estate now has attorneys who have to come in and represent him in this matter —Now, this civil— I know —

13 14 ATTORNEY : I’m not happy about that.

15 16 17 18 19 20 21 22 23 24 25 THE COURT: I know you are not happy with that civil forfeiture matter— but what it seems to me that the estate cannot do, the estate cannot pay claims, cannot pay these claims that have been filed by the persons that may be coming out of New York— whether they get a judgment out of New York or whether they come in to this Claims Resolution Program— that is how I’m reading that, that by this the Government has said, stop because and I read that in part of your filing because

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the Government is concerned that you could then start this program, start entering settlements, paying out settlements and then when the Government comes, there’s nothing at all.

ATTORNEY BLUM: The program will be recommending settlement. It will be approving settlements that will be paid by the estate. They will need to be paid if, in fact, we adopt the program. The problem is that if we do not proceed to the program, it will tend to waste estate assets because, as Attorney Kroblin refered to earlier, we will now have to go much heavier into litigation that are already pending. We will need to expend additional expenses on attorneys fees and other expenses relating to those litigations especially with respect to discovery since there’s at least 22 of them that will be a very large amount.

Since at least the claimants who have spoken up, appear to be in favor of the program, that is why we would like to get the program approved quickly, as soon as Your Honor is prepared to do so. And then we still

1 2 3 4 5 6 7 8 9 10 11 have to deal with the liens. That is a separate issue It might prevent the actual payment but if we can promptly deal with the liens even after we have started the program, that would be to the estate’s advantage because we would not have this additional litigation expense, and once we get to the point of actually having to pay out the settlements via the program or otherwise, other settlements, that would be the way we think that we should be proceeding.

12 13 14 15 16 17 18 19 20 21 22 23 THE COURT: You see, Attorney Blum, how you described it, that was my thought process. That if you have the settlement resolution program quickly, I mean fairly quickly dealt with, because if not, if you don’t use that program, then what you have is these multiple lawsuits proceeding, attorneys being retained to represent the estate in these actions and judgments being entered but you have no control of and the judgment will have to be paid whether it’s a settlement through this program or a judgment.

24 25 But my question is right now by what The People have filed and you said that

1 2 was your initial reading of it, what has changed?

3 4 ATTORNEY BLUM: My initial concern, I’m concerned—

5 6 THE COURT: Well, that is my concern too.

7 8 9 10 11 12 13 ATTORNEY BLUM: —that this Court and the Government feel that we shouldn’t be spending anything on virtually anything. You have already confirmed that we can administer the estate for which we appreciate that, but part of the administration of the estate is also dealing with these claims.

14 15 THE COURT: Yes, I know but now these claims are going to be paid from where?

16 17 ATTORNEY BLUM: They are going to be paid from estate assets, no doubt.

18 19 20 THE COURT: And The People have just put a lien and the lien provides that nothing could be paid out of those assets.

21 22 23 24 25 I can understand that you need to do it today and I think Attorney understand that but their concern is that you cannot pay claims and you cannot set up this program.

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Attorney , then what would you have the estate do? Then the estate is going to go into New York and Minnesota and Florida and wherever else and having to retain Counsel for all these lawsuits.

ATTORNEY BLUM: And Your Honor.

THE COURT: Yes.

ATTORNEY BLUM: These claimants will be denied timely compensation which is one of the things that the co-executors very much wish to avoid. We wish to compensate them promptly. They were interested in having this program go forward and that is what we would like to do.

ATTORNEY : Your Honor, first of all, the program and I mean— let me go back. Let me go to the podium, Your Honor.

Ariel on behalf of the Government of the Virgin Islands. I think Virgin Islands law is clear as to what the Criminal Activity Lien is. I don’t think from my estimation there’s any dispute but beyond that, I think that there’s a misunderstanding as to what the Government is saying.

1 2 3 4 5 6 7 8 Lien Notice, we have stated an opposition to the plan as proposed and what we did in our opposition is we indicated the areas in which we have concerns about the plan as proposed. One of the areas that we were concerned with is that the plan as proposed, presumes to exonerate other people besides the estate of Jeffrey E. Epstein.

9 10 11 ATTORNEY BLUM: Your Honor, we haven’t had a chance to present our motions yet and she is providing all—

12 13 THE COURT: You know what? Yes. And I have no idea what you are speaking of.

14 15 16 17 You know what? Attorney if I could, the estate was going to provide the Court with more information concerning this plan this morning.

18 19 20 21 22 23 24 ATTORNEY : Okay, and to that end, whatever is provided this morning, we have no information as to it and the information that was provided in the opposition we received yesterday, we have not had an opportunity to reply to it because we just saw it, so it might be premature.

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last thing I’m going to say with regard to this until I’m called again — but we believe that setting up this plan without the Court having a full inventory and a complete accounting that has vouchers and all the other deficiencies that were missing from this accounting would be premature.

THE COURT: Okay. So let the Court say this: I’m not going to make any decision on this plan, whether creating this plan or it shouldn’t be created or should be put in place this morning because I have no information as to the plan because in the submissions from the estate, they set forth, I think several times that full information will be brought to the Court this morning.

I’m going to allow you then to provide that information. Then I’m going to allow Counsel present to make their comments, arguments, for or against the plan but there is going to be no decision this morning because I do not have full information as to this plan.

Then, I’m going to have to say if this Court were to structure, set up, allow

1 2 3 4 5 6 7 8 9 10 11 12 —first of all, do I even need to be the one to allow the co-executors to establish the plan, moving estate assets, and if that’s the way, I need to know how much estate assets are you going to move; how does that import with the Criminal Activity Lien Notice that the People have filed; is there anyway for me to get around it; can the two sides, with the People work that out and say so much can go into the plan? Yes, we don’t want to affect claimants but we also have to know we have a claim; The People have filed their claim.

13 14 15 16 17 18 19 20 21 22 23 And you know, for none of the claimants before this Court do I have numbers; right. There are no numbers so I can’t even say set aside this amount. There are no numbers. Everything is, speculation, a judgment, we’re court but there are no numbers you know, going into which is unusual because when claims come before the Court, a claim by the Statute, that is how we determine claims. It sets out the specific amounts.

24 25 ATTORNEY BLUM: If we might at this time, I would like Attorney Tomback to

1 2 3 4 5 provide the Court, via witnesses, with much of the information that you are inquiring about and that the Government is inquiring about and at the end of that presentation, then Your Honor can ask whatever questions.

6 7 THE COURT: Testimony? Are you going to have written documents?

8 9 ATTORNEY : That is my concern also.

10 ATTORNEY BLUM: Yes.

11 12 13 THE COURT: I thought it to be written documents with how much is going to be expended for rents, money - not testimony.

14 15 ATTORNEY BLUM: It would be both, Your Honor.

16 17 18 ATTORNEY : Your Honor, I think this is part of the Government’s concern and this is Ariel again for the record.

19 20 21 22 23 24 25 The Estate needs to be forthright with the Court about every aspect of whatever it is they are proposing even though again we maintain it’s premature because if they haven’t at this juncture they are making this plan proposal but they haven’t even done the basics which is to give

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the Court an inventory and based on its motion, they have until March 2nd approximately, to provide this inventory so to even get into a plan without an inventory so the Court knows, essentially the lay of the land, is extremely premature and then to proposed the plan before the Court without any writings, without any opportunity to vet it properly, it’s highly irregular.

THE COURT: If I understand it, Attorney Tomback is going to provide the Court with how much he believes, how much the plan would cost. Am I correct?

ATTORNEY TOMBACK: Your Honor, Andrew Tomback on behalf of the executors. I have been admitted pro hac vice. I know I can do this later but my oath is here if Your Honor wants it.

THE COURT: Yes. Please file it in the proper way into the Court.

ATTORNEY TOMBACK: It’s our intent to have Your Honor’s permission to call three witnesses. The first witness, Jordana , and they all will be supported by documents, documents which have been available

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in the public domain, some of which have been filed by the Court and available to the Attorney General, that describes the program in great detail.

The reason for the program; why it makes sense to the victims; why it makes sense, I think, for everybody in terms of the estate not to be litigating in various places and spending money on litigation.

Quite frankly, I think that if the Attorney General hears from these witnesses, I can tell you about it in a moment, but if the Attorney General hears from these witnesses, I believe that we’ll address every concern that the Attorney General has raised, including whether in fact we can pick a particular number as a number of dollars that Your Honor at this time, Your Honor can say, okay, that is the right number because we don’t have the whole number of victims and so forth, and I would defer, quite frankly I’m just a lawyer, but the people I’m going to call, Jordana who was the Administrator of the 911 fund has tremendous experience. This is the first witness we would

1 like to call with respect to that, Your Honor.

2 The second witness is Ken

3 4 5 6 7 8 9 Feinberg. Mr. Feinberg from the beginning of his career involving Agent Orange and working with the Judge in the United States to solve what seemed to be an intractable problem, has done plans like this more than any person alive - not just in the United States but anywhere.

10 11 12 13 14 15 16 17 18 And then the third witness is my colleague, Mr. Weiner, who also represents the estate who would briefly testify regarding why the estate itself is going to be harmed (a) if the Attorney General lien, as you put it, makes everything grind to a halt, not only the victims or the alleged victims or the claimants - whatever you want to call them, but also the estate.

19 20 21 22 23 24 25 I’d just like the opportunity to put them forward. I think it will clarify a great deal for Your Honor, the Attorney General. I think in fairness to the people and the Court who don’t have an opportunity to speak because they are not admitted to hear how we believe this will help people who

1 2 alleged that they’ve been harmed, people who are claimants.

3 4 5 6 7 THE COURT: But there is still the concern. If I understand it, the People are the only ones opposing the establishment of this program, right, as proposed but there is nothing proposed.

8 9 10 11 12 13 14 15 16 ATTORNEY TOMBACK: Your Honor, we can bridge the enormous gap because the Attorney General’s understanding and expression in our papers of what is proposed is not what is proposed and I think if we hear from the witnesses, we’ll understand from the witnesses what is really proposed and I think the Attorney General can have every opportunity to cross examine them.

17 18 19 ATTORNEY : Your Honor, but we are not prepared to do that today, Number 1.

20 21 22 23 THE COURT: You know, that is true. You told me, because I did not know that you were going to have all these people here.

24 25 ATTORNEY : And so we are not prepared to do that today because we

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haven’t had an opportunity to vet this question, but more importantly, we still haven’t found out from the executor what does this program cost. Do you have those numbers? That is the preliminary question. We can hear all about, you know, all the touchy-feeley, whatever.

THE COURT: Okay, Attorney Let’s hear from some of the other attorney representing.

Attorney Benham, do you want to come forward or any other attorney wishing to speak in this matter? Just identify yourself.

ATTORNEY TOMBACK: By the way, Your Honor, I just want to make one thing clear just so Your Honor understands. I think Your Honor knows this but we’re here now and I understand your concerns but speed is of the essence. I think that the victims or the claimant’s counsel will speak to that.

But we made our motion with respect to that, Your Honor, on November 14th. We then filed again on December 13th. The Attorney General is late to the game, right, so she says she’s not prepared but she wants

1 to stop us.

2 3 4 THE COURT: But listen, you filed your motion to establish the program, right, without—

5 6 ATTORNEY TOMBACK: That is all we want to do now, Your Honor.

7 8 9 10 11 12 13 14 THE COURT: Yes, but you want me just carte blanche go and establish the program? You never gave the Court any numbers. We didn’t know what numbers we were dealing with. We didn’t have a quarterly accounting. We didn’t have an inventory. That’s part of the objections the People are making and now—

15 ATTORNEY TOMBACK: Your—

16 17 18 19 20 21 22 23 24 25 THE COURT: —let me finish—so don’t tell me cause you told me when you filed your motion. I know when you filed your motion but I was not prepared to rule because there was no information for this Court to rule on that motion. So now if I understand it and then motions or filing to the Court during the course of the week said the Court will be given this information at the hearing. Well, I didn’t know what kind of information you

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were coming with at the hearing. Now you say you are coming with witnesses. My thing and I specifically said Attorney Benham made one of the most salient arguments —no objections to the plan but what is the cost of the plan. Everybody just want to know what you are going to do to set this up. And that is what I want to hear. Let me hear from other counsel, please, sir.

ATTORNEY TOMBACK: Sure.

ATTORNEY : Good morning, Your Honor. Sean . Our firm represents probably two dozen of the victims - probably the majority of the victims that are going to be filing claims against the estate and we are absolutely in favor of this program. We think it’s a great program that will provide redress to the victims without the need for protracted litigation and we feel that to derail that process at this stage would not be in the best interest of those victims.

We don’t disagree that more information is required and I think that’s why we are here today - to get more information so that we can move forward and support that

1 2 program for our clients. That is where we stand on that position, Your Honor.

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5 ATTORNEY : You’re welcome.

6 7 8 ATTORNEY D’AMOUR: Good morning, Your Honor Kevin D’Amour. We represent five different victims. I would echo what Mr.

9 10 11 12 13 14 just said but I want to make it clear that if we fail to establish a program that is cognizant of the harm that’s caused to these victims it’s going to be far more discriminatory than what the Government is trying to propose or object to.

15 16 17 18 19 I think if we go forward with this program we are going to see great results and I think we are going to have a much better outcome if we can go forward with this program as soon as possible.

20 21 THE COURT: Thank you. Attorney Benham.

22 23 24 25 ATTORNEY BENHAM: Good morning, Your Honor. John Benham on behalf of one claimant, Jane Doe. I assume at some point during our proceedings today we are going to

THE COURT: Thank you, Attorney

1 2 3 4 5 6 7 get to the issue of how the creditors are going to proceed in this by pseudonym or however, but as far as the voluntary compensation program, as we stated in our papers that were filed on December 23rd, we don’t oppose the creation of the program but we don’t know what the program is.

8 9 10 11 12 13 14 15 We don’t know in particular, the expenses that are going to be entailed in just creating the program in the first place. We don’t know and we still don’t know, even after the first quarterly accounting, what is in the estate, whether or not the program intends to divulge making all of the estate assets available.

16 17 18 19 20 21 22 23 24 25 I think the estate has responded that yes, all of the assets, I believe they have said that all of the assets are available because under the terms of the will, the executors have to pay all of the debts in all of the claims that are approved and only after that the rest and residue of the estate and assets will be poured into the trust that was created under the will. At least that is the way I understood it.

THE COURT: Except for now what the Government has done.

ATTORNEY BENHAM: That is a new development, Your Honor.

THE COURT: Yes. That is what I am saying. That is what has now maybe thrown everything and I got notice of this January 23 of 2020, right. That is a whole different something to look at. What does that do to what it may bring to the proceedings or persons going under?

ATTORNEY BENHAM: I didn’t get notice of that until last Friday, Your Honor, because the Government didn’t serve anybody except for the estate as far as I can tell so as far as these proceedings, there’s no- - so I’m not here to address whether or not the CICO lien is as all encompassing as the Government claims it is which basically freezes every single asset of the estate and say no, you can’t pay anybody. I would understand that is what they say the effect of the CICO lien is.

I would be, if the Court wishes us and the other creditors who have filed

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claims in this matter to address that, I would suggest that perhaps a briefing schedule should be established on that particular issue.

THE COURT: I think that may be appropriate and the People then could respond because that is now the quandary I believe the Court is in because now I have what maybe going on in another court. I have the lien. There’s nothing else but it tells me a lien against all and it lists specific assets and it begins with the estate of Jeffrey E. Epstein so if all these things, the shares in all these corporations is sitting in that estate, that is why I say does that then stop everything.

ATTORNEY : Your Honor.

THE COURT: Let me hear from the other Counsel.

ATTORNEY : I just wanted to clarify one thing. The claims that are represented here are the same kind of claims that the Government has. Their claim is not with regard to the lien itself, but the nature of the claims. It’s the same exact type of

1 2 3 4 5 6 claim for those who are in New York courts or other courts. So there’s no distinction between the claims that the Government has in terms of the nature of the claims and claims that are presented by these other claimants in this case.

7 8 9 10 11 12 13 THE COURT: I don’t know. I just know people have filed claims; claims of sexual assault, claims without any monies attached to it indicating that they have filed them in a Court of law and saying maybe they can resolve them through this settlement probate.

14 15 ATTORNEY : And also one of those same type of —

16 17 THE COURT: You’re saying sexual trafficking.

18 19 20 21 ATTORNEY : Well, the point I’m making, Your Honor, is that their claims had no numbers nor do all claims and they are all filed in court.

22 23 24 THE COURT: And I said that and everybody has filed their claims here with no numbers.

25 ATTORNEY : Right.

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THE COURT: So if I were to say those are claims, those claims don’t comport with what the Statute requires but I’m allowing people at some point to fix numbers on them, they’re coming in as claims. If I’m just sitting strictly on probate and just reading what probate requires, it requires you to have affixed a number. Nobody has affixed a number but I can understand why you can’t fix a number cause you are just, to me, preserving a claim that you say I may perfect somewhere by getting, may get a judgment and then if I don’t or I don’t want to try to get this judgment, I’m willing to resolve this matter through this voluntary settlement program.

Correct? Right. Everyone?

ATTORNEY : Yes. I think setting up the program is different than paying out under the program. We want to move forward with setting something up; we are not talking about paying out. That is different.

THE COURT: Attorney , that was one of the things and the note I have is that’s what it is. You just want to have this program in place. You just want them to start

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talking with the alleged victims and maybe then you just have matters are settled, but you still know I have to wait for whatever is going to pan out here with this CICO lien.

ATTORNEY : But I think that program will also help flesh out what those numbers are for each claimant cause each claimant is very different.

THE COURT: Okay, Sir. Let me hear from final Counsel.

ATTORNEY CHANCO: Douglas Chanco here for the record. Your Honor, to build on Attorney Benham’s argument that I’d like to adopt, this Court has kind of touched on our concerns already so I will be brief.

The setup of the fund is not what my claimant Araos’s issue is. It’s the fact now that we’ve been hearing today of 32 plaintiff’s lawsuits and the funding of any sort of claims program and we just—even with the fact that Your Honor stressed, I have not been able to provide a number as no other claimant has, I would cite to the filing on January 31st of this year in Schedule G. My client’s case is the first one listed on

1 2 3 4 5 6 7 8 9 10 Schedule G; it is a New York State case. It is proceeding . It is not one that may possibly be filed or is intended to be filed. It is going forward at this time and her New York Counsel is present here so we would just ask the Court to, again, take concern as to funding of any amount from the estate for the payment claims at this point as we have a valid claim to present and preserve at this point.

11 12 ATTORNEY WESTFALL: Your Honor, may we be heard?

13 14 THE COURT: Yes. State your name for the record, please.

15 16 17 18 19 20 ATTORNEY WESTFALL: Melody Westfall. Your Honor, we would ask that the estate be allowed to resolve the claims Your Honor ruled earlier today that the estate would be allowed to settle some claims and we would urge you to allow the —

21 22 23 THE COURT: No, I don’t recall that. I said the estate could pay its attorneys, except probate attorneys.

24 25 ATTORNEY WESTFALL: Well, we would argue that the lien applies after what

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claims are paid. This is about the victims. It’s about the people’s whose lives are ruined and we are very in favor of the voluntary program. The victims desperately need help. It’s pressing and we would urge the Court to hear from the administrators and perhaps we can resolve this today. Thank you, Your Honor.

THE COURT: Thank you.

Have I heard from all the attorneys representing persons who may be filing or have filed claims against the estate?

ATTORNEY BOURNE-VANNECK: Good morning, Your Honor. Richard Bourne-Vanneck on behalf of the claimant Tela . I would second the issues that have been raised by Attorney Benham. I thought he did it adequately so that is why I sat back down. Thank you.

THE COURT: Thank you. So if I understand what the persons here, the attorneys representing the claimant, what we really just need to get is testimony on the numbers. I think everybody says they’re in

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favor of this program. They’re satisfied how the program may be set up. We just need to know how much monies we are talking about that would be allotted to this program.

ATTORNEY : Your Honor, I would just state one thing. I really just want an opportunity to present our own witnesses. I think there’s information that we may have that I would like to present to the Court also before the Court can make its final decision.

THE COURT: I’m not making a decision. I specifically said that. I’m going to take the testimony because the persons are here to testify.

THE COURT: I think I specifically said I’m not ruling on this and I’m also going to require Counsel to brief the Court on the effects of this lien as to anything how this estate proceeds as far as it wants to set up the claims. I understand that the estate just want at this point permission to set up this program. That is what I am understanding permission to set up the program.

1 2 3 4 5 6 Then the question will be and thereafter once the program is set up, you go ahead and start to talk to the alleged victims, would any settlement then have to wait until resolution of this criminal forfeiture in the civil action?

7 8 9 10 11 12 13 14 I’m going to ask Counsel to brief the Court and provide to the Court say within thirty days memorandums of law to assist the Court on that but I’m going to allow you to present— I think everybody has agreed that at this point they have enough information as to what this program would entail.

15 16 17 18 19 20 My law clerk, Attorney Harrigan did some research on this program and he provided to the Court that this similar program has been done with 911 victims, the Archdiocese of Los Angeles with its sexual assault cases.

21 22 23 24 25 So it’s not a program that has not been used by other persons. It’s just as, I think, the estate has said, this may be a new one in a probate but it has been done, tried, tested, worked. I think we are just

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here and all Counsel for claimants have said they support the program because they believe it will be a quick resolution for these victims, alleged victims, rather than having to go to court and testify, right, in open court and have to present a full claim.

To me, it also has to reduce attorneys’ fees on both sides significantly. Just how much will be set up maybe the Estate can work with the People as to what — because it’s the People, the Government is the opposition. That’s where your opposition is. I have no other opposition but the Government and maybe their mistake is just try to work with the Government with regard to what the Government has filed. But Sir, just go ahead, please. I think we can just limit it to what the numbers are. Fair enough for everyone in the courtroom?

ATTORNEY TOMBACK: Your Honor, with some leeway, I think we can focus, okay?

ATTORNEY TOMBACK: So III , will you take the stand, please?

DIRECT EXAMINATION

1 By Attorney Tomback:

2 3 Q. Please state your name for the record?

4 A. It’s Jordana Harris

5 Q. Where do you live?

6 A. I live in —

7 ATTORNEY TOMBACK: Sorry. Sorry.

8 I’m sorry. She should be sworn.

9 THE COURT: Yes, she should be.

10 11 ATTORNEY TOMBACK: She’s trustworthy, Your Honor.

12 THE COURT: Well, yes.

13 (Laughter)

14 15 16 And you do have your pro hac admission? May I have it before I allow you, let me just at least say I saw that.

17 18 ATTORNEY TOMBACK: May I step forward or—

19 20 THE COURT: The marshal will take it for you.

21 ATTORNEY TOMBACK: Thank you, sir.

22 23 THE COURT: Let’s take a ten-minute recess.

24 (Ten-minute recess)

25 (Court re-convened)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Good afternoon. Before we proceed I need to take care of some matters. After I retired to , it came to my attention, I think I have been free with the Counsel for the claimants to allow them to come forward and make presentations to the Court because this is an unusual situation here this morning. But before me I have a motion from the People, the Government to intervene as a claimant intervenor in the matter and I’m going to deny that - the Motion to Intervene. You’re here as a claimant. And I’m assuming that you will file your formal creditors claim. You know you face that lien. You have the Criminal Activity Lien Notice.

17 18 19 20 21 22 23 24 25 So that being said, also there’s a Motion to Intervene filed by Attorney D’Amour. The Court recognize you are a claimant. You represent claimants for the estate. You may have a claim against the estate. I’m going to deny the Motion To Intervene also for those claimants represented by Attorney D’Amour. Is he still present in the court?

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ATTORNEY D’AMOUR: Yes, Your Honor.

THE COURT: Yes, you are. You have filed claims against the estate. You just need to perfect those claims, provide the information, whether it’s by judgment or should this voluntary program be established by the Court, but as the Court has not now allowed anyone to intervene, this matter will proceed just as if it was a regular probate proceeding. The estate Counsel is here. The Court is here. I’ll allow you to present the testimony limited to what the Court believe it needs concerning this program. Sir?

UNIDENTIFIED SPEAKER: Sorry to interrupt but we also had a motion to proceed anonymously for claimants.

THE COURT: With that, let me say that proceed in the same name in which you were proceeding in the New York Courts or whatever courts you are filing this assault case. It just seems to me that would make it easier because then when you bring your judgment, should you have a judgment that comes in as a creditors claim, the Court would know what claim it goes with.

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So, file your claim in the name, however you are proceeding in whatever Court you are proceeding in with the sexual assault. Fair enough, all Counsel? So the motion would be persons will then file however you are proceeding under, the claim would be filed in the same way. Attorney

ATTORNEY : I just have one procedural question, Your Honor. To the extent that you’ve denied the Government’s Motion to Intervene, how would we file any response to— cause we decided to file the Motion To Intervene in order to be able to file the opposition which has not been formally filed. It was attachment. just filed as an

THE COURT: claimant, right, so you before the Court . You come in as would be presented

ATTORNEY to intervene was premised activity lien and so once : Well, the motion on the criminal we were able to intervene we would then file an opposition as a movant of sorts. I’m just trying to figure it out procedurally.

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THE COURT: Okay. I’m not leaving you intervene for probate purposes. Now, you have this civil —

ATTORNEY : Criminal.

THE COURT: And I don’t know what happens over there. Once that case has been filed, then I guess you would file it and then show the Court why you have to be here making opposition to whatever we have. But right now I’m not allowing you to ask questions of the person on the stand. Do you understand that?

THE COURT: Should you go farther there, right, you have a lien. If I understand it, there should be then some kind of action filed.

ATTORNEY : It has been filed.

THE COURT: It has been filed? Well, I don’t have it. I know there was a lien.

ATTORNEY : It was attached to the motion.

THE COURT: Not what I have, I don’t believe.

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exhibits. ATTORNEY : It has five

THE COURT: Then once it’s here and you hear that, if you believe this program would affect your claim, then you would have a right to file your opposition but I’m not going to allow you to be questioning the witness. Do you understand that?

THE COURT: I’m not going to allow —or when you submit your claim, follow the claim procedures and the executors will review it, whether they approve it or reject, guess what? Then you move the Court to hold a hearing and then we go in full presentation.

THE COURT: Fair enough. All right. Okay, Sir, and for the record, Attorney.

ATTORNEY TOMBACK: Your Honor, I had assistance from your colleague here to the left.

THE COURT: My able law clerk, Attorney Harrigan. Yes, we do have your application for pro hac vice admission that

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was approved and signed by Justice Cabret January 30th at 2020. And we have your oath that was attested by the Clerk of the Court, Attorney Handy February 3rd at 2020. So you are properly before the Court. We will now swear the witness.

Thereupon, JORDANA HARRIS , first having been duly sworn, was examined and testified as follows:

DIRECT EXAMINATION

Q. Please state your name?

A. Jordana Harris .

Q. Where do you live?

A. New York City.

Q. Did you come down in St. specifically to testify in this proceeding?

Q. And are you familiar with our filing indicating on January 9th in our brief that you would be here to answer questions that the Court may have?

Q. And where were you most recently employed?

1 2 A. I worked at the September 11 Victim Compensation Fund.

3 4 Q. And briefly describe that fund for the Court?

5 6 7 8 9 A. It’s a federal program that was established in the aftermath of the September 11th attack to compensate the families of those who died and people who were injured in the immediate aftermath of the attack.

10 Q. What was your position there?

11 12 A. I was Deputy Special and Director of the New York office.

13 14 Q. How long did you hold that position?

15 16 17 18 19 A. I held that position for three years but I worked through the Justice Department and with the program for over ten years in its various iterations beginning in 2001 and then when it was re-opened in 2011.

20 21 22 Q. And did you leave the 911 fund generally your position there to embark on working on this program?

23 A. Yes.

24 25 Q. And just briefly describe your responsibilities with the 911 fund?

1 2 3 4 5 6 A. I ran our appeals process which afforded any claimant an opportunity to challenge eligibility and compensation determinations if they didn’t believe that the decision appropriately accounted for their circumstances.

7 8 9 10 11 12 13 I presided over or participated in hundreds of those hearings. They were intended both as an opportunity for the claimant to supplement the record and be heard and also for us to acknowledge the traumatic experience that each claimant had been through and the impact that it had on their lives.

14 15 16 17 Q. I’m going to shorten what I was going to cover with you but have you devoted the bulk of your professional career to mass work or mass claims programs?

18 A. I have.

19 20 Q. And you have developed a fair amount of expertise at it, right?

21 22 23 24 25 A. Yes. It’s definitely a niche practice but this is the kind of claims compensation programs outside of traditional litigation similar to what we do with the September 11th fund determining eligibility,

1 2 3 4 determining compensation, figuring out a claims process, intended to be expeditious, voluntary. That is my experience with the 911 program.

5 6 Q. And do you recognize this book that I’m holding up?

7 A. I do.

8 9 Q. It’s Mass Claim Resolution Facilities. Who is the author?

10 A. I’m a co-author of that book.

11 12 Q. And basically what does the book cover?

13 14 15 16 17 A. It provides case studies of mass claims resolutions facilities outside of litigation, and offers some practical guidance in navigating the design, implementation and administration of those programs.

18 19 20 21 ATTORNEY TOMBACK: Your Honor, I would just like to offer now just to speed us up biography. It’s been distilled to one page.

22 23 24 ATTORNEY : Your Honor, is it possible even though I’m not allowed to ask questions that I can see the CD.

1 copy?

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ATTORNEY TOMBACK: Absolutely.

I’m just putting it on the record, Your Honor. I’m not going to ask any questions. I want to move us forward.

Q. When were you first approached regarding a possible compensation program that related to Mr. Epstein?

A. In late September 2019.

Q. Who first contacted you?

A. Dan Weiner.

Q. And did you have conversations and meetings thereafter with the state representative?

A. Yes. I had several meetings by phone and then in person with representatives of the estate.

Q. And where did those conversations end up in terms of your career?

A. They asked me to serve as a co-designer of the program and also to administer the program once it was up and running.

1 Kenneth Feinberg?

2 A. I do. I know him well.

3 Q. How do you know him?

4 5 6 7 8 9 10 11 12 A. Mr. Feinberg was my professor in law school in a course about Individual Justice in Mass Torts Context. We worked very closely together in the first iteration of the September 11th Victims Compensation Fund. We sat on this Mass Claims Commission that resulted in the book that you just offered, and he’s been a mentor to me through out my professional career.

13 14 15 Q. Before you took on this new responsibility related to Mr. Epstein, did you consult with Mr. Feinberg?

16 A. I did.

17 18 Q. And I was pointing backwards, is Mr. Feinberg in the courtroom here today?

19 A. Yes, sir, he is.

20 21 ATTORNEY TOMBACK: For the record he is the gentleman waiving to my right.

22 23 THE COURT: Good afternoon, Sir. By Attorney Tomback:

24 25 Q. Did Mr. Feinberg have a role in the compensation program?

1 2 3 A. Yes. He was also selected to act as a co-designer of the program and helped to implement it.

4 5 6 Q. And was one of the first things that you did— I’m sorry. There’s a third person that you worked with. Who was that?

7 A. Camille Biros.

8 9 10 Q. And the three of you, was one of the first things the three of you put together called a mission statement?

11 A. Yes.

12 13 14 15 16 ATTORNEY TOMBACK: If I may offer that, Your Honor. I don’t know what the Court’s intention is with numbering things. I would call this Number 2 and the Bar Number 1.

17 18 THE COURT: So this is 1; that would be 2.

19 By Attorney Tomback:

20 21 Q. Let me ask you a few things about the Epstein Victims Compensation Program.

22 23 By the way, how did the program get that name?

24 25 A. Mr. Feinberg, Ms. Biros and I decided on the title. We thought it was

1 2 3 important to acknowledge upfront that these were Epstein victims, to acknowledge the wrongs that they suffered.

4 Q. And is it a voluntary reprogram?

5 A. It is a voluntary program.

6 7 Q. And explain what you mean by voluntary?

8 9 10 11 12 A. It just means that the victims have a choice. If they want to resolve their claims in an alternative way outside of the litigation, they can participate. No one is required to participate in the program.

13 14 15 16 17 18 19 20 21 22 23 24 25 The way that we have designed the proposed design of the program, which as you heard was supported by many of the victims, is that a claimant could come into the process, go through the entire process, get a compensation only at that point rights be affected ask that they sign determination, and then would any sort of legal or compromised. We wouldn’t a waiver of release until they had an opportunity to make a more informed decision about whether the compensation that’s being offered is attractive and appropriate for them.

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Q. Is it a confidential program as well?

A. It’s confidential to the extent that we, as the program administrators and my staff and contractors, would be protecting the privacy of the victims. We wouldn’t be sharing any information with the estate or publicly. But the confidential requirement is unilateral. It’s only imposed on us and there’s no requirement whatsoever that claimants limit their— what information they want to share with whomever they wish — you know, investigators, the public. This is an alternative to civil litigation and so we have no intention to interfere with any sort of criminal proceeding .

Q. Are you familiar with the civil lawsuit that the Attorney General of the United States Virgin Islands filed in the other court?

Q. And have you read the Complaint?

A. I have.

Q. And direct your attention—you probably don’t remember this, but I’ll tell 1 2 3 4 you —Paragraphs 87 to 88 described the program as quote, imposing confidentiality restrictions, close quote, on claimants. Is that accurate?

5 6 A. It’s not for the reasons I just stated.

7 8 9 10 Q. Did you contact the Attorney General to correct that error and any other issues that came to your attention in reviewing the Complaint?

11 12 13 14 15 16 17 18 19 20 A. I did. I sent a letter to the Attorney General on January 16th, the day after the Complaint was filed, not only to correct that mischaracterization, but also just to give her some insight into the proposed design of the program. I had attached a draft of the protocol that we have developed - Mr. Feinberg, Ms. Biros and I - had developed and circulated to the Plaintiff’s lawyers weeks before.

21 22 23 24 I explained to her in the letter the various meetings that we had had with Plaintiff’s Counsel to get their input on the draft protocol and seek their recommendations.

1 2 3 4 shed light on what the proposed design was so that she understood that many of her assumptions about the program were incorrect and had been addressed in the draft protocol.

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ATTORNEY TOMBACK: Your Honor,

I’d like to have marked as Exhibit 3 that

letter. It’s dated January 16, 2020. It’s

written by to the Honorable Denise

N. , Attorney General.

Q. Is that the letter you wrote,

, to Attorney General ?

A. I don’t have a copy.

ATTORNEY : Your Honor, I’m

not questioning the witness but I do believe

that this goes beyond what the Court was

anticipating.

THE COURT: I think Attorney

Tomback is going to bring me to what I need to

know about the monies. I haven’t heard that,

setting that up. That is really what I want

to know.

•

I think we agreed that everybody

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what is going to be the costs of setting up this program?

ATTORNEY TOMBACK: Your Honor, the short answer is that the costs definitely justifies the program and we are going to get to the cost but I just want help on one item and you tell me if I should do it or not, but I think that while I have here —and quite frankly it’s wonderful to come down here. It’s beautiful, but is here and Mr. Feinberg is here. I’d like to close the gap for the Court and so the Attorney General understand the proposed program is not what the Attorney General wrote about. It just isn’t remotely related to the process that is laid out in her papers.

Judge, there’s no live person that the Attorney General represents. The Attorney General represents a claim of a client that is historical. I’ve just been admitted to be pro hac. I don’t profess to be an expert of the law but I think it’s clear to everyone in the courtroom that this program needs to go forward to save the estate, quite frankly, just to address the victims or the

1 claimants.

2 THE COURT: Okay.

3 4 5 6 7 ATTORNEY TOMBACK: So I just want to put the context there and close the gaps so the Attorney General can have some residual concern that the estate can address and move on and get going.

8 THE COURT: Okay. Continue.

9 By Attorney Tomback:

10 11 12 Q. Did the co-executors or Counsel, anyone affiliated with them, direct you to write this letter?

13 A. No.

14 15 Q. letter? Whose idea was it to write the

16 A. It was my idea.

17 18 19 20 21 Q. Okay. And the mission statement that I showed you before, Exhibit Number 2, did you describe the program as a, quote, non-adversarial alternative to litigation, close quote?

22 23 A. It does. I don’t have a copy in front of me but I remember writing it.

24 25 Q. Why is non-adversarial important given your background and expertise?

1 2 3 4 5 6 7 8 9 10 A. In these kinds of programs, you have to remove any sort of adversarial posture or tone. I mean the victims are sharing very personal details of their lives about the abuse whatever happened in the aftermath and so they need to be able to feel comfortable that they can share that information without fear of being cross examined or interrogated or that that will be used against them at some later point.

11 12 13 14 Q. In your mission statement it also says that the program, quote, aim to timely resolve, close quote, claims. Why is timeliness important?

15 16 17 18 19 20 21 22 23 24 25 A. It’s important because it’s important to the victims. I mean the victims are the ones who want this program to move forward. They want an option that will expeditiously resolve their claims. We have made a goal to resolve claims within sixty to ninety days of a complete submission We wanted to make a meaningful alternative to litigation for the victims and as you heard today, the victims are in support of allowing this program to move forward.

Q. The Mission statement also says quote, the program offers a, quote, a process that is sensitive to the experiences and concerns of the claimants and treat them with compassion, dignity and respect.

Why is that important and how do you know that the program is actually going to do that?

A. I know it because I have done it before. I mean Mr. Feinberg has done it before. You know, these programs are, we find the victims are looking for validation as much as they are for compensation. They want someone to acknowledge what they have been through and to be treated in a compassionate and dignified way in the process. That is exactly what I have done in the 911 fund.

Q. And the Mission statement also goes on to say that the program will be run by, quote, independent, close quote, claims administration experts. What do you mean by independent and why is that important?

A. Well, that’s key. I mean particularly in this unusual context but we are, Mr. Feinberg, Ms. Biros and I, we are

1 2 3 4 5 6 7 8 not agents of the estate. We’re not here to do their bidding. We make decisions on the design and I will make designs on the administration of the program, how it operates, and how claims are determined based on our own judgment and experience and the estate has agreed to be removed from any part of that process.

9 10 11 12 13 14 15 16 17 Q. And so just to focus in on an individual claimant’s claim and the amount of compensation that the program, and you as the administrator, arrive at, the statement provides that quote, the estate will have no authority to reject or modify the administrator’s determination on any basis or as to any claims, close quote. Why is that important to the program and the claimants?

18 19 20 21 22 23 24 A. It’s important because to allow the estate a say in these decisions compromises the key-guiding principle of the program. It compromises our independence; it compromises our claims and confidentiality; it compromises the non-adversarial nature of the program.

1 2 3 4 5 says participation in it does not affect any rights the claimant might have unless and until the claimant accepts the compensation, determination, and signs a release. Why is it set up that way?

6 7 8 9 10 11 12 13 A. It is set up again as a choice where the legal rights are not affected until the very end of the process, until claimants are able to go through and evaluate her options, see if it’s something that she’s willing to accept or not, with the freedom to withdraw the claim at any point in the process if she’s not satisfied.

14 15 16 17 18 19 20 21 22 23 24 And I would add that one of the things that Mr. Feinberg and I thought was important to include in this program was that that also includes not requiring as a condition of participation in the program any victim to stay pending litigation in order to participate. Claimants can go on a parallel track through our claims process and through litigation if they want to seek discovery and only at the very end of the process would they have to make a decision of which way to go.

1 2 you know have any claimants stayed voluntarily their actions?

3 4 5 6 7 8 A. Yes, it is my understanding that five Plaintiff’s have stayed litigation with the expectation that this program would be up and running in short order because they apparently, I understand that they believed that this was a bona fide alternative.

9 10 11 12 Q. The sooner the program is up and running, I take it the more likely it is to have people stay their litigation, is that a fair assumption?

13 14 A. That’s beyond the scope of what I can say.

15 16 17 18 19 20 Q. Now, the statement also says there in the statement, Exhibit 2, quote, All claimants will be afforded a confidential opportunity to meet face-to-face with the Administrator, if they so desire. Why is that important?

21 22 23 24 25 A. Again, in my experience, the victim wants an opportunity to be heard to tell their story in a way that is rarely captured in a paper file and so it’s something we wanted to offer the victims if they wish to

1 2 3 4 5 6 avail themselves of it. There’s no requirement that any victim come in to meet with us. If they do want to meet, we’ll make it available in different ways but that piece is important because of the opportunity to be heard and tell their stories.

7 8 9 10 11 12 13 14 Q. Are you familiar with the Attorney General Counsel complaint and other papers that have expressed a concern that the opportunity to meet face to face with you doesn’t adequately take into account some of the persons here in the Virgin Islands? You need to come to me. What would you do to accommodate that?

15 16 17 18 19 20 21 22 23 A. We would accommodate. It’s already written into the draft protocol but we would accommodate any questions. You know, we can do it by teleconference, video conference. We would be willing, as we have said to some of the Plaintiff’s lawyers who have clients in Florida, to go to areas where there are a number of claimant’s where we could hold those meetings face to face.

24 25 Q. And the mission statement refers to a claims protocol that includes, quote

1 2 3 eligibility criteria, the methodology for determining compensation, proof requirements and claims procedures, close quote.

4 5 Can you briefly address program protocol?

6 7 8 9 10 11 12 13 A. Yes. It just, it lays out the terms and conditions or the proposed terms and conditions of how the program would operate. It gives some visibility of the criteria that we’ll apply when evaluating claims for eligibility and compensation and outlines the way that we’ll process the claims and the expectations in terms of timing.

14 Q. And how is the protocol developed?

15 16 17 18 19 20 21 22 23 24 25 A. So Mr. Feinberg, Ms. Biros and I drafted the protocol in November and December of 2009. One of our main objectives was to make it as broad and as claimant friendly as possible and with that in mind, we removed a lot of the barriers that would apply or could apply in litigation. The Statute of Limitations is not an issue that we’ll keep in allowing people to participate; prior settlement would not preclude someone from participating in the program; and so we

1 developed a protocol with that in mind.

2 3 4 5 6 7 8 We want any victim who suffered abuse to be able to come in and participate in the program and once we had an initial draft, we circulated it to the estate, to the Plaintiff’s lawyers, to the USVI Attorneys Office, in the Southern District of New York to get their feedback on the protocol.

9 10 11 12 13 Q. And just to be clear, I might not have heard you but I take it numerous Plaintiff’s met with you and proceeded with you or Plaintiff’s Counsel, some of whom are here?

14 15 16 A. Yes, we met with nearly all of the lawyers we know about who represented Plaintiffs.

17 18 19 20 21 Q. And if the Attorney General or her representative wanted to meet with you or just talk to you on the phone or have a series of meetings to express concerns, will you listen to her?

22 23 24 25 A. Absolutely. In fact, in my letter I invited an opportunity to meet with her and discuss more about the program and seek her input.

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Q. Have you heard from her yet?

A. I have not heard back.

ATTORNEY TOMBACK: I would just like to offer up the protocol still in draft form. It’s not finalized but the protocol, as it exists that have been provided to us for this purpose by , shows a track change based on meetings with Plaintiff’s Counsel. I don’t want to review that. want to get this done before you lose patience.

THE COURT: Yes. I want to hear about the money.

ATTORNEY : Your Honor, just for the record I’m not going to ask a question. Just that the revision of the protocol is not what was before the Attorney General in the letter that was sent to her.

THE WITNESS: As Mr. Tomback just said, the protocol that he just offered has a red line copy. Only the red lines are new; anything additional to that, we circulated to the Attorney General.

ATTORNEY TOMBACK: Your Honor, I have one more topic to cover, which is to

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provide briefly an overview of the actual claims process. So if we can mark this as Exhibit 5.

I just want to provide some context because the program is not — you need to understand the program, I think, to evaluate the costs.

Q. So taking a look at Exhibit 5, is that in front of you?

A. Not yet.

Q. Let me wait. I’m reminded by my colleagues for the record of Exhibit 5 which I’m going to offer and when the witness identifies it, then I will put it into evidence. It’s entitled the overview of the claims process.

So directing your attention to the third paragraph, it says, quote, Claimants who voluntarily elect to file a claim with the program will be invited to participate —excuse me —invited to provide documentation identified in the claim form developed by the claims administration experts and any additional corroborating or supporting

1 information to substantiate their claims.

2 3 Can you offer to the Court how that works in practice?

4 5 6 7 8 9 10 11 A. So we all developed a claim form that will look to capture just some basic information about the claimant, about the circumstances of her abuse, the type of abuse, the location, when it happened, how long it happened, and invite her to submit any sort of documentation she might have to help corroborate the claim.

12 13 14 15 Q. And if there is a deficiency in the claim, will the claimant and other Counsel have an opportunity to correct that or address it?

16 17 18 19 20 21 22 23 A. Yes. The program, as we have done in other programs we have administered before, is intended to be claimant-friendly. So if someone files a deficient claim, we’ll do a preliminary review, identify what the deficiency is, do out-reach to the claimant or her representative, and work them to try to address the deficiency.

24 25 ATTORNEY TOMBACK: Your Honor, much of the Mission Statement speaks for

1 2 itself. If you don’t mind I will quote two more paragraphs then move on.

3 By Attorney Tomback:

4 5 6 7 8 Q. If you look, , at the fourth full Paragraph, Line 5, where the word once appears on the right, can you just read that into the record and comment on that for us?

9 10 11 12 13 14 15 A. “Once a completed claim has been submitted, the Administrator will evaluate the claim based on all available information and will issue a determination regarding whether the claimant is eligible to receive compensation and the amount of compensation to be paid to an eligible claimant.”

16 17 18 19 The individual claim determination will be based on that factor in the considerations identified in the protocol. It speaks for itself.

20 21 22 23 24 25 Q. I don’t have any questions. I just wanted to cover that. I want to get to sort of an end game of how the process works. In your overview statement there’s an ultimate paragraph and I will read that into the record, “Upon the issuance of a compensation

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determination by the Administrator”, that’s you, “the claimant will have complete freedom to accept or reject that determination. If the claimant elects to accept the determination, the claimant will sign a release waiving the claimant’s rights to litigate in the courts, as set forth in the protocol. Upon the Administrator’s receipt of the claimant’s acceptance of the compensation determination and executed release, the Administrator will authorize payment to the claimant”.

Do you have anything to add to that?

A. Only that the idea of this type of program, as with the other programs that Mr. Feinberg and I have administered, is to get these victims paid quickly. So our expectation is that once we issue a determination, if the claimant accepts it, and sends in the release, we will immediately notify the estate and our expectation is that they will disburse the funds very shortly thereafter.

1 2 3 4 5 6 7 8 Attorney General lawsuit? This is, again, that Complaint of Paragraph 88 where they say the program, quote, requires any claimant accepting an award under the program is sacrificing any other claims against any persons or entity arising from or related to Mr. Epstein. Closed quote. Do you view that criticism as sensible?

9 10 11 12 13 14 15 16 17 A. Well, like I said before, this program is not intended to interfere with any sort of criminal investigation and the scope of the release has not yet been determined. Ultimately, I mean, that is something that the estate is, I understand, is working on and ultimately if a claimant believes that their rights are unfairly compromised, she has the freedom not to sign the release.

18 19 20 21 22 23 24 25 Q. Right. And if a claimant signs a release and, for example, the United States Virgin Islands Attorney General wants that claimant to serve as a witness in a criminal investigation, hypothetically, the person can still receive compensation, sign a full release in terms of civil claims of the estate—if it is not scheduled another time —

1 2 3 4 and the Attorney General could still sit with that person and perhaps use her as a witness or to help the Attorney General’s investigation; is that fair?

5 6 7 A. Absolutely, like I said before nothing limits the claimant from speaking with investigators about the circumstances.

8 9 10 11 Q. Just in terms of the civil release itself, those are common in your experience? In other words, that you settle sort of total settlement?

12 13 14 15 A. Absolutely and actually, this is different from the 911 context where the waiver attaches at the very beginning of the process upon submission of the claim.

16 17 18 19 20 Here, we thought it would be beneficial to the claimant to wait until the end of the process so that they have a more informed understanding about what they would receive.

21 22 Q. I’m just going to go through this fast. You set up a website, right?

23 24 A. Yes. We started to develop a website. We will set up a website.

1 date, a start date, a let’s-go date?

2 3 4 5 6 7 8 9 A. We have not. We are tying it to approval by the Court to allow the program to move forward but we will be once it’s approved by the Court, we can be up and running within ninety days and I expect, because of the considerable amount of work that we have done up until then, we would be able to do that even more quickly.

10 11 12 13 Q. Last point before turning to the anticipated cost of the program, there’s a deadline for the submission of claims. Why do you have to have a deadline?

14 15 16 17 18 19 20 A. Because deadlines motivate people to act. It provides certainty. We found in our experience that people often wait till the very end of the process to file their claims, the last day, because life gets in the way and it’s not a priority until it becomes a priority.

21 22 23 24 25 So we proposed in the draft protocol making a 90-day filing window, and we didn’t hear any feedback from anyone that that was an inappropriately short period of time so that’s our expectation.

ATTORNEY TOMBACK: So, Your Honor, the budget for the program, can I have this marked as Exhibit Number 6 and then, I think, it would be best to mark Number 7. Number 7, if it’s admitted into evidence, is the engagement letter that signed with one of the counsels for the estate.

Q. So I’m told that the actual signatories for the engagement letter is not counsel but all co-executors?

A. It was like not me. Right.

Q. Precisely. All right. So is it correct that the design and the implementation on the operation of the program such as this requires significant personnel and costs?

A. It requires a specialized expertise in a unique area and it requires building out the infrastructure to support the operation.

Q. And is there a budget prepared by you, Mr. Feinberg and Ms. Biros?

Q• And at the beginning when the budget was put together, had you redacted the 1 2 fees for Mr. Epstein —excuse me —for Mr. Feinberg and for you upfront?

3 A. We did.

4 5 6 Q. And why was there concern about not having that being the very first thing that people focused on?

7 8 A. We just felt like it was a distraction at the very beginning.

9 10 11 Q. The copy that you presented to the Court, which is Exhibit 6, is un-redacted, and so let me just have one more minute.

12 13 14 15 16 17 18 So , turning here to Page 3 of Exhibit 6, the estimated budget, I think it’s probably just easier if you walked us through —without quoting necessarily —but walk through the large pieces of these expenses for the program and then I will ask you some questions about them.

19 A. You said Page 3?

20 21 22 23 24 Q. Yes, but let me start by —this isn’t something we really prepared but — how many people have the sort of expertise that you do and Mr. Feinberg does to conduct a program like this?

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Feinberg is obviously the leading person in this area. It’s a pretty small group of people who do this kind of work.

Q. So I’m not great with analogies, but if I were to compare Mr. Feinberg to a car, right, would he be a good car—Let’s not talk about the —is he the best in the area in your view?

A. In my view he is the best.

Q. And in consideration of how to set up the fund in terms of the program, in terms of design and in terms of administration, without giving anything away that is privileged, the group that came together to figure out how to try to do this — first of all, are you familiar with the fact that the group of executors, co-executors and their Counsel looked at other candidates other than you?

A. I understand that you met with several other people.

Q. And in talking through exactly how to structure the relationship between the- well, relationship between you and Mr. Feinberg, are you familiar with some thoughts

1 2 3 4 or what you thought about why you should be the administrator rather than Mr. Feinberg being the administrator and who should focus on design?

5 6 7 8 9 10 11 A. It was my—I mean, you probably could speak to this selection process better than I can, but it is my understanding that you were looking for someone who both had experience and had sensitivity to the victims’ experiences and I believe you were looking for a female to run the program.

12 13 14 15 Q. And so can you just walk through them with the budget? Starting with the first part of the budget, what are the payments to Mr. Feinberg? I guess that’s the start.

16 17 18 19 20 21 22 23 A. Well, he was retained to design the program based on his very extensive experience so the fees are related to the drafting of the protocol, the meetings that we had with the Plaintiffs’ lawyers, all of the work that goes into bringing his years and years of experience to bear, and in designing and then the implementation of the program.

24 25 Q. And then turning to the second part in terms of your fees — first of all,

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just to divert and try to pick up on that area, you are currently, you are working sort of in the hope that the program will be approved, right?

Q. I mean, you are just between jobs, effectively working on this?

A. Yes. I have left my job with the 911 fund to do this program because I truly believe it was in the best interest of the victims.

So since November, we have been working full steam ahead to get this process up and running because we believe it’s the right thing to do, but I have not been compensated and more importantly, I haven’t been able to compensate other people who have been willing to dive in and start doing work to ensure the timely implementation of the program.

Q. And the budget specifically says- going back to Mr. Feinberg—so this is on the record, it says after listing a number of services that will be offered that Mr. Feinberg’s law offices will receive $850,000

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per month and it says for a maximum period of two months. It says, “thereafter, all ongoing consulting services provided by Mr. Feinberg and Ms. Biros will be deemed to be included in the above-referenced fee.”

Do you understand Mr. Feinberg to have made a commitment after the two months are over to provide services for free?

Q. And in your experiences will he stick with the program or will he disappear?

A. He always stick with the program. He is very reliable, very reliable.

ATTORNEY TOMBACK: Your Honor, the budget, those are the main pieces. We can walk through —

THE COURT: Tell me the bottom line.

ATTORNEY TOMBACK: The bottom line of the budget?

THE COURT: The budget has a bottom line. Are you going to rent office spaces?

ATTORNEY TOMBACK: We can walk through that, Your Honor.

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THE COURT: Just tell me what the office space is. You know, and this question about Mr. Feinberg, this $850,000 a month for two months; is that to him or his law firm?

THE WITNESS: The law firm.

ATTORNEY TOMBACK: The law Office and just to be clear, so he’ll bring to bear the whole thing —

THE COURT: I just want to know if it’s to the law firm?

ATTORNEY TOMBACK: Yes, and Ms. Biros alluding—

THE COURT: Let’s just get it for the persons here, right? Remember, you have been kind enough to give Government Counsel copies of the budget and other documents, but remember there are other counsels for claimants’ present who that was their concern concerning their claims and they have not been given that information and will have to wait until the session adjourns to go to the clerk’s office to get copies. So I just want you to give us where the large expenses would be.

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So, , the payments used for the duration for programs, right, which were how many months is the estimate, assuming the timeline?

A. The estimated budget assumed 12 to 14 months to design, implement, administer from start to finish. I think that the estimation was made with the expectation in. November that it would be approved in short order and that we would be able to execute the contract with vendors and contractors which we have not been able to do because I don’t have the authority to do it.

So we have done all of the work up until that point but have not yet been able to execute and some people have had to decline to participate because of the passage of time. We still anticipated it being a relatively short time frame. I don’t know if it will be within the 12 to 14 month period. That number also assumes, you know, depending on the number of claimants, and that is not just legitimate claimants. We will be accepting claims from some claimants who were determined not to be eligible and those are claims that

1 2 3 have to go through the process just like any other claims in order to get to that determination.

4 5 6 7 Q. And so with respect to your personal fees, is the fee $150,000 a month for the estimated 12 to 14, and if necessary additional, months?

8 A. I’m sorry.

9 10 11 12 Q. Just to understand, if you look at B {i} for Design and implementation for the entire program, what is the fee that will be paid to you,

13 A. After the 14 months?

14 15 Q. No. In total for during the 14-month period?

16 A. It would be that, times 14.

17 18 19 20 21 22 23 24 25 Q. Right? And then with respect to— I mean, just walking through this so it’s in the record even though the documents are there, in terms of the fees and expenses that will be required to be paid and operation of the claims process, you have the backroom costs, some sort of website, the distribution of program documents, developing of procedures to track the claims, to investigate the claims

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and to supervise a toll-free calling center, do you estimate the projected costs for that for the entire program to be in the range of $150,000 to $250,000?

A. Yes, that is what we estimated in November.

Q. The Attorney General said a month but is that not for the whole program?

A. Right. Most of those are cost that would be up front in terms of the development of the website. We want to develop functionality to allow someone to submit a claim electronically, but that is for the duration of the program.

Q. And then in terms of staffing, depending upon the number of claimants who come forward, there’s provision in the budget for up to - not necessarily three, but up to three attorneys to support your program and then administrative support, data analytical support, information technology support, etcetera.

So those staffing services monthly costs are estimated to be in the range of $160,000 but that can change if you were to

1 2 become —that would be addressed for more people, correct?

3 4 5 A. Yes. These estimates are based on whatever information we had available at the time that we drafted this in November.

6 7 8 9 ATTORNEY TOMBACK: Your Honor, there’s one other topic that I would like to— I have to do one other thing is what I’m told. By Attorney Tomback:

10 11 12 13 14 15 Q. This final item is in the estimated budget on Page 5 that you need to have office spaces and equipment. You can’t use your old spaces, right? And there are other employee costs in the range of 15 to 20,000; is that correct?

16 A. That’s right.

17 Q. That is additional cost, okay.

18 19 20 21 The last topic I want to cover, Your Honor, is timing. So we touched on timing but can you just express in a nutshell how important it is for the program to get going?

22 A. It’s extremely important.

23 Q. Why?

24 25 A. Because the victims want it to move forward. I mean, to hear many of their

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representatives come up and say it actually impacted me even more than just— this was particularly impressive upon me because these victims have been at the precipice of opportunity to get some measure of justice in many different points and it’s been pulled out from under them or delayed in some way.

And we are now at a point where we invested a considerable amount of time to put together a draft of what the program would look like to seek the input of the plaintiffs’ lawyers. We have their support and the victims are now, from my understanding in speaking with many of the Plaintiffs’ lawyers, they have had conversations with their clients and their clients are really eager to have this process move forward.

And their expectations have been raised in terms of it being implemented in short order and so to delay this further would really be a great dis-service to these victims.

Q. Just so I sort of break them into—I call them claimants; you call them victims but it’s the same thing—just put them

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in two categories, okay? One category are Plaintiffs who’ve already brought suit through their counsels - the bulk of them in New York. If the program doesn’t go forward, then they would be stuck litigating, right? I mean, they’re going to have to litigate. Is that a fair assessment of what’s going to happen to them?

A. That’s my understanding.

Q. Okay. I want to address this separately. I mean, I think that the Court understands that, so I don’t want to belabor it but I just want to address a separate group, which is, if a person whose claim that she’s been harmed by Mr. Epstein but for whatever reason does not want to go to court, wants the confidentiality, wants to sit with you and not sit in a courtroom and testify and so forth and so on, if the program doesn’t go forward, what happens, in your view, to that person?

A. She’s left without recourse.

ATTORNEY TOMBACK: One moment, Your Honor. I think I’m done here. So I just have one more question of and I wanted

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to call Mr. Feinberg solely to address the prior concern that the Attorney General has. And Your Honor, I don’t want to —

THE COURT: But you know what? It’s not about the Attorney General’s concern. My concern is you are coming here to ask this Court to fund this program. My concern is what types of monies are you talking of? That is what you need to address - not the Attorney General, right?

How much money are you talking about that I would have to say, allow the executor’s, co-executors to move from the estate to this program?

, would you be able to say, based on your experience, what would be the range of settlement in these types of matters?

THE WITNESS: Well, it’s—let me just preface it by saying, you know, we have gotten representation from the estate that there will be no cap on either a given amount on the individual claims, and I believe Mr. made this point, it is impossible to value these claims in the abstract, right.

1 2 There are different circumstances in each case so it’s hard to say.

3 4 5 6 You know, I think that we are talking about, you know, claims that would range from the thousands of dollars up into the millions of dollars.

7 8 9 10 11 12 13 14 15 THE COURT: Would this be where you could — and I think you may have testified to this — you could enter an agreement with these claimants/ victims as to the settlement amounts, they sign the release and they understand they may have to wait for their payment because I think you said that the whole idea is to have them fully compensated within a short period of time.

16 17 18 19 20 21 22 23 24 THE WITNESS: But the goal would BE that once they sign the release and we are able to notify the estate that the estate would be able to disburse that money almost immediately. I understand from the Catholic Church Sex abuse cases, it’s turned around in a week or two. In the September 11th program, they were also able to turn it around in a few weeks time so that would be the goal.

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goal but you understand in this matter, the Government of the Virgin Islands has filed an action that may impede that?

THE WITNESS: I would say that to the extent that the Government’s interest is at least in part to protect the victims’ interest, that interest is not being served by them trying to step in and take priority over the victims.

THE COURT: Well, I don’t know. The People will have to speak to where their interest lies, but I know what the People have filed to put a lien on all the properties of the estate.

ATTORNEY TOMBACK: I asked counsel whether there are any claimants, any individual people that they represent.

THE COURT: Well, the Government never represent individual people. The Government represents the People of the Virgin Islands.

ATTORNEY TOMBACK: Right, but just to be clear, there is no claimant that would receive those monies. There are criticisms about the program in terms of how

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it will treat claimants, but they have no claimants.

THE COURT: If I understand what the People of the Virgin Islands is saying is they are concerned that this program could wipe out whatever they believe they should be entitled to under the action they have filed. That’s what I am trying to get, what is the bottom line? How much money are you talking about? Is there anyway to segregate and say whatever the People are coming against and they have listed what they are seeking, what property they put a lien on. They haven’t put a lien on— well, they put a lien on the entire estate which all these shares are sitting in the estate—that is what I am trying to get, and I think it maybe you have to talk to the People.

ATTORNEY TOMBACK: The only thing I believe I can help in one respect is that the co-executors and their Counsel believe- first of all, there’s a net savings of litigation costs to the estate to proceeding in this way.

THE COURT: Sir, you are

1 2 3 4 5 missing —I understand that. I totally get it - that it will be for everybody involved less costly to enter into the settlement program than to litigate. I get that in terms of money; in terms of time.

6 7 8 9 10 11 12 13 But I’m also backed up where I have what the People of the Virgin Islands, The Government of the Virgin Islands has filed this Criminal Activity Lien Notice which tells me that everything that they have taken this lien, nothing can be disbursed. That is where we are. What can I do at this point with this notice that has been given to the Court?

14 15 16 17 18 ATTORNEY TOMBACK: Two ways, Your Honor, that I think that we can try to address that. One way is to point out that the concerns expressed about the program are not accurate. I think has —

19 THE COURT: Sir —

20 21 ATTORNEY TOMBACK: And the second way —

22 23 24 25 THE COURT: No. Listen. I disagree. I don’t think whatever concerns they had about the program, that’s not before me. I understand that The Government of the

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Virgin Islands is saying I’m going in to take a stake in this forfeiture action to take control. It’s not about the program. They are saying don’t pay out anything on the program because you could not distribute anything from this estate because I have filed this lien and this lien says any trustee, executor, person or institution who moves, transfer or conveys title to personal or real property upon which a Criminal Activity Lien Notice has been filed which the personal or real property is located or who transfers or conveys such property while having actual notice of this lien shall be liable to the Attorney General. That is the concern. That is what they are seeking here or they come in.

17 18 19 20 21 22 23 24 25 And I told Attorney she couldn’t ask any questions, but that is what I understood; that by this program you said you could enter into settlement you said ten thousand to tens of thousands of dollars to persons and then their concern is and then we get our forfeiture judgment and there’s nothing there. Do you understand? That is what I understand the Government is moving.

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ATTORNEY TOMBACK: Could I have one question and then I will propose a way of going forth which is we could like let the program at least develop. So the Order that is before Your Honor— maybe that is the best thing to do at this point — the Order before Your Honor is just to allow to be engaged and Mr. Feinberg to really be engaged to continue their work and to get a protocol to bring to Your Honor to approve, but it seems, I mean, I think I’m reading between the lines that it seems that Your Honor is speaking about maybe a cap on the amount that you don’t like the—maybe put a cap on the amount. You don’t like the infinite nature— I guess the way you are describing it.

THE COURT: Well, is there a set of money that could be moved to fund this program because, okay, you bring the protocol to be approved, right? I approved the protocol. You start working. You say 12 to 14 months from the time of the release this person is to be paid, but then I have on the other side what the People are dealing with in the civil court.

1 2 3 4 5 6 And how I read the Statute, that lien can be in place for a period of six years. So now you’ve set up a program. Persons, the victims come in, sign, release, believe everything is in place. I think that is where I am at.

7 8 9 10 ATTORNEY TOMBACK: The problem with that, Your Honor, is that— I mean, I can let the Plaintiff’s Counsel address that— that will chill the program.

11 THE COURT: I understand.

12 13 14 15 16 17 18 19 20 21 22 ATTORNEY TOMBACK: Let me just ask a question so I understand so we can clarify the point on this, okay? If the Attorney General recovers, let’s say one million dollars from the estate, is that one million dollars going to go to the budget of the Virgin Islands or is it going to go to the victims? If it’s going to go to the victims, I don’t know why we can’t bridge the gap and get the Attorney General to be satisfied with this program.

23 24 25 THE COURT: You know what I said and it comes down maybe to the estate needs to meet with the Attorney General.

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ATTORNEY TOMBACK: We’re prepared to do that.

THE COURT: I think I have said that a couple of times. The estate may need to meet with the Attorney General, with the victims, the claimants, Counsel here is saying we are fully in support of this because the only person we believe will be hurt by not approving this program are the victims because the victims either would have to go into courts, right, expend monies for attorneys on both sides when there’s a program that is going to be fully developed. They are saying we can deal with these victims, fully resolve the issues and have them compensated in 12 to 14 months.

Madam Attorney General, what would you be willing to do on this point? Release a portion of the estate just to fund this program while you proceed with your action?

ATTORNEY TOMBACK: We can absolutely do have. We could do that immediately and the only question I can ask, Your Honor, I can hand up as an exhibit —it’s

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already in the court records, but Your Honor, two copies. One I want you to have. It’s not really for the witness.

In the interim, we would just like to move forward. No awards of money; no release of money but to move this process forward to complete the protocol which is something that would come to you, Your Honor, to approve, if that is what you want if you want to exercise that jurisdiction over the program. Otherwise, for the executors to approve the protocol and be in a position to move forward if in fact we can reach an agreement with the Attorney General or otherwise avoid what I think you call a freeze of the program which obviously we don’t want. That Order will allow actually to be gainfully employed again and to move forward and for Mr. Feinberg to put it together.

THE COURT: You are going to ask me to sign this order now?

ATTORNEY TOMBACK: Yes, Your Honor, please.

THE COURT: No, I don’t believe

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so. I haven’t even seen what you had marked in the exhibits and they have not been admitted. You haven’t moved for the admission.

ATTORNEY TOMBACK: I move for the exhibits of 1 through 7. Eight is already in the record. I thought I move a few of them in before.

THE COURT: No, you haven’t because I never ruled.

ATTORNEY TOMBACK: I’d like to move to enter into the record Exhibits 1 through 7.

THE COURT: They will be so admitted.

ATTORNEY : Of course, Your Honor, I just would want to say that I want to put my objection on the record.

THE COURT: I’m not signing any motion from the bench. Trust me on this.

ATTORNEY TOMBACK: Your Honor, I’m being urged to ask and I actually want to ask it myself but I don’t want to anger Your Honor. I would very much like to call Mr. Feinberg just to address the Attorney General’s concern. It may help make progress, 1 I think.

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THE COURT: Call just him for the limited purpose of that. I’ve gotten, I think, the claimants Counsel who was present wanted to know the money. Attorney Benham, I keep looking at you. You have that as part of the record that now you can get copies of that and then now the attorneys can be in a better position to say, if I understood that, that was their reservation, but I think maybe you need to talk to the Attorney General, the Government of the Virgin Islands, Department of Justice as to his concerns. We now know what the monies are. We now know what you are seeking to set it up.

ATTORNEY TOMBACK: Your Honor, just so you understand that the executors are trying to sort of move between a rock and a hard place. What is difficult for the executors is that the reason that there’s no quote/unquote cap on the program is to attract claimants to the program and to avoid criticisms from Plaintiff’s Counsel that we are given quote/unquote only X dollars. And so we carefully avoided that and I understand

1 2 3 that the Attorney General wants effectively a cap and we’ll work with the Attorney General to try to get this done.

4 5 6 7 8 9 THE COURT: I don’t think that is what they want. The Attorney General to just saying make sure whatever judgment may get— right now, you know what? We two sets Attorney me is they have of claims. We have a claim by the General and the claimants.

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Attorney anything The question is, does the General lien take priority over else done in the estate and I said that is how I read it. Attorney Blum said that is how he read it too, that it may stop everything because the Attorney General has put a lien on all the property. I said, well, the estate has to continue to function. It has to pay its bills; it has to — and Attorney , I think, conceded that it may have basic administration costs, but this is different what you are asking this Court to do while I have this lien here. And this is what I am saying, why can’t somebody guide the Court - whether Counsel submit memorandums of law — no, it does not; we can proceed —

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whether you can say we can back out this amount, whatever is going on in the civil court should not be affected; we believe the estate, if the Attorney General, the Government of the Virgin Islands was to prevail, this will be the amount that they would recover and so we can safely expend these monies on this program, but remember the question was because we don’t have the quarterly accountings, we don’t have the full evaluation. We don’t know what the estate consist of.

ATTORNEY TOMBACK: Your Honor, I understand. Can we start with Mr. Feinberg just to address the subsequent concerns that the Attorney General have with the program, if I can call him?

THE COURT: Just call him quickly. Thank you, . We have all exhibits admitted?

Thereupon, KENNETH R. FEINBERG, first having been duly sworn, was examined and testified as follows:

DIRECT EXAMINATION

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Q. Mr. Feinberg, before you were sworn in, I think you have all the exhibits in front of you so it would go much quicker.

THE COURT: He’s already sworn in.

ATTORNEY TOMBACK: He already sworn in?

THE COURT: Yes, we were good on this one.

Q. Where do you live, Mr. Feinberg?

A. Washington, DC.

Q. Did you come down here just to testify in this proceeding?

A. I did.

Q. Where are you employed?

A. I’m the Law Office of Kenneth R. Feinberg, PC.

Q. What do that firm do?

A. We specialize in alternative dispute resolutions, mediations, arbitrations and claim programs like the one proposed.

Q. Would you just describe briefly to Your Honor your experience in this matter?

A. I started in 1984 with the Agent

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Orange Vietnam veterans liability litigation where we set up a program following the settlement. I was appointed by the Bush Administration to design and administer the 911 funds. I was appointed by the Obama Administration to design and administer the Deep Water Horizon Explosion and I’m currently a co-administrator and designer of Catholic Church sexual abuse cases in five states.

Q. Have you written any books?

A. I have written two; One is “Life Worth”. My experiences with the 911 Victim Compensation Fund. And “Who Gets What”, chapters devoted to my various claim administration programs.

Q. And is it fair to say that you are regarded as either the best or one of the best people in dealing with these sorts of complicated multiple claimant filings?

A. That is for others to say. I’m busy at it.

Q. Will you disagree with on that?

A. No.

Q. Do you have a role in this

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program, the Epstein Victim Compensation Program?

A. Yes. I have been asked by the estate to work with . Biros in the design, implementation and administration of a proposed program.

Q. Do you believe the program would work if the Court approves it?

Q. And are you familiar with the oppositions to the estate motion for establishment of a voluntary claims resolution program filed basically last Friday by Attorney General Denise

Q. Have you reviewed it?

A. I have.

Q. What do you think of it?

A. The Attorney General is trying to do what is best for the Virgin Islands. I can’t question that. There are statements made in the Complaint that I disagree with, and I agree with the Court sitting up back that the estate and the Attorney General should be able to work this out.

Q. And I direct your attention to Page 1 of the Opposition. It says, quote, the program does not secure the Government’s substantial and legally protectable interest in the appropriate and supervised distribution of the estate’s assets.

What’s your understanding of whose role it should be to, quote, supervise the distribution of the estate’s assets?

A. The Government has an interest. It’s the executor’s role. There’s no reason you can’t set up this program and administer it to the satisfaction of the Government, I think, as we’ve done in other programs with the Government of the United States or states that have studied the program and gone along with the proposal.

Q. Okay. On Page 3 of the Attorney General’s letter, she notes that Virgin Islands law entitles victims of crimes to be treated with dignity and compassion, to be protected from intimidation, to be informed of their legal rights and to receive reparations for physical and emotional injuries suffered as a result of being a victim of a violent

1 bodily crime.

2 3 4 Breaking that down, how many claimants have made themselves known, roughly, to the program so far?

5 6 7 8 9 10 11 12 13 14 A. I think it’s probably either known or in anticipation from talk with Plaintiff’s lawyer, probably about fifty. There may be more. Once you announce a program, they will be gilded and they will come. But the goals set out in the Attorney General’s Complaint is exactly the goal of this program - to satisfy the Attorney General and the estate and especially the victims in getting them prompt compensation.

15 16 17 Q. To date are any of the claimants that have come forward, US Virgin Islands residents that you know of?

18 19 A. I’m not aware of any. I don’t know.

20 21 22 23 Q. And says, quote, under the framework of the fund, there’s no obligation that the program Administrator be subject—withdrawn.

24 25 On Page 4, on the long part of Page 4, notes that the programs

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design, quote, would be in part determined by an undefined group of those with an interest in resolution of the sexual abuse claims made by Mr. Epstein’s victims, and she complains that, quote, this group could include any number of individuals and entities, close quote.

Who actually designed the program to the extent it’s designed so far?

A. The protocol was very transparent. The Administrator will be Jordana ; the program has been designed by Ms. Biros and myself. It’s been submitted to both the estate lawyers and the executor and it’s been submitted to very distinguished Plaintiff Counsel.

They have commented; we’ve redlined it; we are still reviewing it; but it is a very transparent process designed to get eligible claimants fast compensation.

Q. Without restating what said, do you understand that in administering the program, . Biros will be subjected to the supervision and approval of this Court?

1 A. That’s my understanding.

2 3 4 Q. And do you understand that we are here because we sought the approval of the Court. We just didn’t do it, right?

5 A. Yes.

6 7 8 9 10 11 Q. And once you developed the protocol, is it the plan of the executors and the funds administrators, independent though we do communicate - is there a joint plan to come back to the Court with the protocol for Your Honor, for the judge’s approval?

12 A. That is my understanding.

13 14 Q. And that happens before a cent is going to be paid out of the fund?

15 A. That’s my understanding.

16 17 18 19 20 21 22 23 Q. And I asked a bunch of questions about would she listen to the Attorney General, has she heard from the Attorney General. I take it not only will the Co-Executors be willing to speak with the Attorney General, but you, Biros, etcetera, will be willing to take her input?

24 25 A. Whatever the Attorney General wants.

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Q. Okay. On Page 4, the Attorney General also complains that the Epstein —well, the program, quote, fails to specify what constitutes a sexual assault and who qualifies as a claimant.

What in your experience is the program—what constitutes sexual assault in this program?

A. The submission by a Plaintiff’s lawyer or pro se claimant claiming that the alleged victim was abused in various ways, minimally to very, very extensively, here are all the circumstances given rise to that sexual abuse and the administrator will make a determination as to eligibility and as to the amount, if eligible, the amount of money that will be proffered or offered to that claimant.

Q. It sounds like a whole bunch of questions. Is it fair to say that it’s an extremely low bar for a person or her counsel to come forward and to participate in the program and then have a dialogue with the program about what is just compensation?

A. Yes, it is. Much lower than a

1 court of law.

2 3 4 5 6 Q. And expresses concern that, quote, children who were sexually abused by Mr. Epstein may mistakenly believe that they consented to this assault and may not recognize their eligibility for compensation.

7 8 9 10 Of those that you’re familiar with who has come forward, do any of them allege that they were minors when Mr. Epstein sexually abused them?

11 12 A. I’m not aware of individual claims at this stage.

13 14 15 16 17 Q. Combining a number of concerns that has, why is there a window and a deadline and why does the program not just go on forever? I know addressed that, but can I hear from you?

18 19 20 21 22 23 24 A. You can’t have a program like this go on forever. It’s not good for claimants. In the 911 fund, two thirds of all the claimants arrived and filed a claim in the last ninety days of a 33-month program. If you do not have a deadline, people procrastinate. It’s human nature.

25 So we try and set up a timeline

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that will provide claimants and their Counsel ample opportunity to file claims. We have discussed this, not only with the estate, but with the various lawyers representing claimants.

Q. And if a claimant missed that window, will they still have recourse to the courts?

A. Not only will they have recourse to the courts, but as you may understand, we, in certain circumstances, will bend the rules to allow a late filing.

Q. On Page 5 of her letter, III urges that, quote, any program proposed to compensate Mr. Epstein’s victims should counsel the psychological trauma of minors who often repress memories of their abuse by allowing them additional time for filing a claim instead of limiting time for filing. Do you feel the program give enough time?

A. I think so and I agree with that statement, but I think that a nine-month program, as the word gets out, we should be able to get all eligible claimants to file.

Q. And you just covered this but in

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your experience, the programs have cutoffs and then there is some flexibility that the administrator has to try to loop people in who for whatever reason has missed the time?

A. In the 911 Victim Compensation Fund, 97% of all eligible claimants filed. In the GM Ignition Switch Traumatic Car Accident Program, over 95% filed and in all of these church sexual abuse cases, the overwhelming number, well in excess of 95%, filed within the deadline.

Q. On Page 5, continues and says, quote, the evidence requirement could potentially exclude deserving claimants, close quote, and says there’s concern that the program will exclude victims or claimants who may be unable to document their claims. What’s your reaction to that?

A. That’s a very legitimate concern. We think the way the protocol was drafted and the procedures that have been drafted will satisfy the Attorney General that we won’t find eligible claimants deemed ineligible and that is a very real concern of ours in drafting the protocol.

Q. I mean, that’s a very fine point I asked. It’s not really clear to me whether the Attorney General is concerned about finding too many people eligible or finding too many people ineligible.

I mean the goal of the program, right, is to figure out the people who are truly eligible and to accurately figure out what is just compensation?

A. Correct.

Q. That’s the whole game, right?

A. Correct.

Q. Okay. We covered the concern about being forced to come to New York or not being heard. If need be, could you envision coming down here, I guess you or coming down here if there’s enough people here and meeting with claimants?

A. Absolutely. Don’t forget, what these people often want as much as compensation, if not more, is validation, is acknowledgment, the opportunity to be heard and this is something that is a very important voluntary aspect of the program.

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program, quote, contains no assurances that the information submitted by a claimant cannot be later used against her if she thereafter decides to file suit against the estate or any other co-defendant.

Is that criticism grounded in the way you see the program?

A. No. No. The protocol expressly secures the confidentiality of anything provided by the claimant. The claimant, and the claimant alone, decides the extent of transparency or disclosure - not the program, not the administrator, or the estate.

Q. A few more, on Page 6,there’s a concern that notes, quote, the program provides no protection to claimants who voluntarily provide information that may later be used to defend the estate from claims or provides evidence against other victims. Does the program work that way?

A. No. The program seals all the information and various common law and statutorial privileges apply. We’ve seen that in these other programs - attorney-client, etcetera; settlement discussions, etcetera.

1 2 3 Q. Is one thing clear between you and the executor’s and their counsel that you are independent, right?

4 5 6 A. That’s right. When the estate approached me —and the Court asked this question a little earlier.

7 8 9 10 When the estate approached me and I recommended . Biros, I had certain preconditions based on my experience.

11 12 13 14 One: Once the program is up and running, any decision made by as the Administrator is independent and may not be challenged by the estate.

15 16 17 18 19 20 21 22 23 Second pre-condition, I asked the estate point blank, is there enough money in the program to indemnify all eligible claimants and the expressed answer I received from the estate is absolutely. There are sufficient funds in the estate to provide eligible claimants with generous compensation without resort to any cap or any artificial ceiling placed on an individual award.

24 25 Now, I reminded the estate that in the 911 fund the compensation ranged from

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 $250,000 a claim. We had a few claims in excess of five million dollars. In the GM Ignition Switch programs, the claims ranged from about $100,000 to a few million dollars and I wanted to be satisfied that in designing this protocol, the estate had sufficient assets— not only to fund the infrastructure, the budget, but albeit, sufficient funds without a cap for the administrator to fund in some cases perhaps multi-million dollar awards. The estate has assured me and III that there are sufficient funds so that any reasonable program with maybe fifty or one hundred, maybe more claimants, there will be claimants that will received, I suspect, multi-million dollar awards and there would be claimants deemed ineligible because is correct that when you build one of these programs, there will be certain claimants who will file and will be found ineligible.

22 23 24 25 So in response to the Court, I can’t say yet without examining the claims whether the average claim will be one hundred thousand dollars, a million dollars, two

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million dollars but the protocol anticipates any claimant deemed eligible can be valued by the Administrator without regard to limited funds.

Some other plaintiffs’ counsel raised this; I’ve raised this with David Boies; I’ve raised this with Brad ; I’ve raised this with other Plaintiff’s counsel. There is no cap and Plaintiff’s Counsel have been assured that they should participate in this program.

Q. Directing your attention to when says on Page 7 of her letter, quote, the range of compensation must be available to claimants before filing. It goes on to say, quote, the potential range of compensation available for each claim should be provided in advance, close quote.

Based on your experience, is that the way you generally develop the protocol?

A. Can’t be. Until we examine the claims and the allegations and the circumstantial evidence of abuse, you can’t begin to anticipate variations among

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claimants. You can’t develop a public matrix that will, I think, raise false expectations as to what the ranges would be. There’s a certain degree of discretion that the independent administrator must have once reviewing the entire file to determine eligible compensation.

Q. If the claimant wishes, this includes an interview with , correct?

A. At the claimant’s option. Not required. Failure to request a hearing won’t adversely impact the administrator. That’s something that the claimant must decide with his or her lawyer.

Q. A few more. On Page 6, says, quote, the absence of clear and precise parameters for inclusion or exclusion in the program fails to provide appropriate guidance to ensure potential claimants will not be left out. Specifically, without clear criteria, potential claimants neither have the information or confidence to approach the fund.

1 2 3 4 you believe you’ve been sexually abused and you show up, that is sufficient? I mean, do you feel there is a need for more infrastructure at the front end?

5 6 7 8 9 10 11 12 13 14 15 16 A. In the draft protocol that we hope to finalize with the approval of this Court, we lay out in some pretty clear language the criteria that the administrator looks at. It’s similar to what we’re looking at now in the Catholic Church sexual abuse cases in five states. It’s basically that type of criteria. It’s not exclusive but we think that provides the claimant, and I think the Attorney General, with a pretty good blueprint of what will be looking at in administering this voluntary program.

17 18 19 20 21 22 Q. makes the statement that the program administrator’s ability to award compensation, quote, makes it less likely that each claimant receives the compensation to which she is fairly and impartially entitled. Your view on that?

23 24 25 A. Well, I just said that is not true. As long as there’s no cap on the program, as long as Administrator can

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render an independent decision as to each claim without regard to any cap, based on the state’s representations, I don’t think any eligible claimant is going to be shortchanged by the number of eligible claimants.

Q. So far, I just want to ask you, do you agree that one of the themes that the Attorney General is pointing towards is concern that any claimant will somehow be disadvantaged, not receive enough consideration, there might be a cap on what they may get. In other words concern that people would come forward and state that they have been victimized and become claimants, they need to be treated as well as possible?

A. I think that’s right. I think it’s a fair concern but I think the protocol addresses that concern and ensures that each claimant will receive an independent valuation without regard to available, other available funds.

Q. You’ve already addressed this, but the demand that makes on Page 7 is that the program, quote, should disclose any limits on the amounts of compensation

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individually or collectively - speaking of compensation to claimants.

In your view, should those amounts be disclosed? You know, married to an identifier of the claimant? In other words, Claimant named A,B,C receives X,Y,Z?

A. No. I don’t think claimants in particular, claimants in particular don’t want amounts that they’ve received to be disclosed and the protocol spells out expressly that there is no cap or no limit on the amount of individual compensation.

Q. Right. She says the quote addresses disclosing limits. You don’t want a limit?

A. That’s right.

Q. If a claimant doesn’t like the compensation award she receives, can she reject it?

A. Of course, very few do if we do our job right, but the answer is yes.

Q. I was just going to ask you, in your experience with just a couple of the funds that you’ve run, what has been the acceptance rate exactly?

1 2 3 4 5 6 7 8 9 10 11 A. All of the funds that I’ve administered, the acceptance rate is above 90% and that’s because the programs have very quick — I think was a little guarded. I think in this program since it’s been delayed in up and running, I think the compensation decisions once made, people will be paid within a week and I’ll be very surprised —it will be a first —if we don’t have the vast number of eligible claimants paid quickly.

12 13 14 15 16 17 18 19 20 Q. And then are you---well, III said that —this is on Page 7 again. There is a lot on Page 7. She says, quote, the waiver of requirement is unjust - referring to the waiver requirement that, I think this is what she is terming the waiver—that if somebody receives compensation, she must give a global release. Do you view that as unjust or necessary?

21 22 23 24 25 A. I don’t view it as unjust. It’s a voluntary program. If the claimant and her lawyer don’t feel that the compensation that’s offered by is fair or just or reasonable, they opt out and continue to

1 litigate or pursue other remedies.

2 3 4 5 Q. Is the estate vulnerable to third party claims and how does that work if, in fact, the estate does not receive a general release from a compensated claimant?

6 7 8 9 10 11 A. That’s a very interesting provocative question raised by the Attorney General and others. And as stated earlier, the scope of the release has not yet been finalized. The estate has to make a decision. Does it want total peace?

12 13 14 15 16 17 , you will pay what ever is necessary to secure a comprehensive release so we won’t be cross-claimed by a claimant or alternatively now, if a claimant wants to release the estate but litigate against X or Y, that is up to the claimant.

18 19 20 21 22 So that is a critical issue and you can argue both ways and I think that the estate and the administrator and the plaintiffs’ lawyers are discussing that at this time.

23 24 25 Q. Page 8, complains that the program, quote, does not specify whether the administrator is permitted or required to

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share evidence with law enforcement, thus positioning the program as a potential means to conceal criminal activity, close quote. I take it that wasn’t an accusation that you’re trying to conceal anything, but in any event, what’s your view on that?

A. In the forty years that I’ve designed and administered these programs, law enforcement has never sought to secure any civil confidential information.

In the church cases, the Attorney General of various states have come to us and said, you know, you have a lot of information about wrongdoings by Clergy and we refused to—we work out with the Attorney General, go see the diocese or the Church. Don’t come to a program where claimants, individual victims have participated in a program on the absolute guarantee of the administrator that information that have been submitted will not be disclosed to anybody. And that is a very important part of this. Claimants do not want information disclosed.

Q. The program, would it respect that wish of claimants?

1 2 A. It’s expressly spelled out in the protocol, yes.

3 4 5 Q. And they can still go to law enforcement. Period. Full stop. It’s up to them?

6 7 8 A. It’s up to them and they can go public. That’s up to them. The estate cannot. The administrator cannot.

9 10 11 12 13 14 15 16 17 18 Q. On Page 8, says that the program, quote, presents an unavoidable conflicts of interest, close quote, between the executors and the program. She said, the Co-Executors have, quote, an inescapable conflict of interest in recommending a program that proposes to compensate any individual or entity making such allegations requiring in return overly broad releases. Do you have a view on this?

19 20 21 22 23 24 25 A. You have to ask the estate on that. I can tell you that before we agreed to take on this assignment, and myself and Ms. Biros, we have received absolute assurances from the estate that they will play no role in the day-to-day administration of this program.

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Q. Okay. So when it comes to the time to set what is viewed as just compensation for claimants anywhere, for me, my clients, one of the Co-Executors, other counsel, zero, right?

A. No. Zero.

Q. And in terms of your understanding, just from your long experience of the Co-Executors, in viewing them so far, do you view them there as exercising their fiduciary duty appropriately?

A. In this case?

Q. In this program?

A. Very much so. The estate has made it clear from day one they want to create an independent claims program to quickly and efficiently resolve these sexual abuse claims against the estate in a manner that is efficient, cost effective and satisfies their fiduciary duties.

There have been no problems. They have worked closely with us as have the Plaintiff’s lawyers in designing and implementing this program.

Q. And goes on to say on Page 9 that,quote, disclosure of conflicts is

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critical to allow the Court to evaluate the ability of the program to engage in error and impartial arms length negotiations or resolutions.

ATTORNEY : Your Honor, if I may, Counsel is referring to a letter; there’s no letter that’s before the Court that’s from the Attorney General. He’s referring to a motion. It’s not a letter. There’s no communication with the Attorney General to the estate.

ATTORNEY TOMBACK: Sorry.

THE COURT: I’ve been reading along on the Motion.

ATTORNEY TOMBACK: It’s in the motion, Your Honor. I have been referring to it as a letter. Thank you very much. By Attorney Tomback:

Q. So let’s assume there is a conflict in some way that the Executor has with something— I don’t know what. Would that matter in terms of the determination that the program makes?

A. No. Under the protocol and under the agreement, once this program is up and

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running, examines every claim and makes an independent judgment as to eligibility first and valuation second.

Q. And the next to the last, we’ve covered the concern about undisclosed costs and the budget and the engagement letter. So I want to address that.

The last thing on Page 9 that III asserts the program as proposed, quote, offers no reconciliation or accountability because, quote, there’s no disclosure of Mr. Epstein’s conduct, the number of victims or the amount of awards paid.

Does the program in anyway discourage disclosure of Mr. Epstein’s or anybody’s conduct related to him?

A. No. This program is about compensating victims quickly. Whether or not there’s criminal activity or criminal investigation or what have you, this program is focused strictly on determining eligible compensation and paying those victims who have waited so long for compensation.

Q. Besides the specific identify, will the number of victims, the amount of

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awards paid by the program be disclosed and provided to the Court for its review?

A. You’ll have to ask the estate that. I’m assuming that there would be some degree of obligation on the part of the administrator to keep the Court informed about the progress and scope of the program.

Q. If this program does not go forward in real speed, in real time, in your view based on your experience with similar programs, what is the likely outcome?

A. It will be a tragedy. It will be a tragedy not to quickly try and compensate as many victims as come forward who are eligible.

ATTORNEY TOMBACK: Your Honor, I welcome any questions you may have of Mr. Feinberg. I’m done.

THE COURT: I don’t believe the concern is of the program and what the program is designed to accomplish or whether the persons who have been engaged to design this program have the experience, knowledge and can get it done.

No one has addressed for me —and I keep coming back to that —I’m still at I go

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forward with the program and how do I do that with what the Government of the Virgin Islands has filed because the program requires a significant expenditure of monies, right, and it is the victims come in, I understand you would like a quick turn around, but victims could have awards of millions of dollars and then the Government of the Virgin Islands is here saying the estate has been dissipated.

We’ve proceeded with the program; you knew we had this lien; assets of the estate were converted to cash to satisfy the claims. That’s where I am. I never had any concerns about the program and how the program would work.

And as the claimant’s counsel who were present said everybody agrees the program is what they want. They just wanted to know what is the money to establish the program. We now have a budget and now we have that the awards can be any amount depending on how the victim presents what she is able to or can show the administrator, but we still come back to this lien on everything of the estate.

2 THE COURT: Yes.

3 4 5 6 7 8 ATTORNEY TOMBACK: But can I just point out one last thing before we do that. If you look at the prayer for relief of the Attorney General, correct, I mean it basically summarizes that the Attorney General wants all the money.

9 10 THE COURT: Yes, I got that. She wants everything.

11 12 13 14 15 16 17 ATTORNEY TOMBACK: But the Attorney General, in her Complaint and in her Motion To Intervene has put forth—I think the witnesses have been completely clear—it’s sort of—I don’t think intentionally —but sort of fake facts about the program. I just want to put the cap on that.

18 THE COURT: Okay.

19 20 21 22 23 24 25 ATTORNEY TOMBACK: I don’t understand why the Attorney General is talking about the program and why the Attorney General is even criticizing the program. If she’s basically just saying I want to take all the money, right, and I want to deny the victims the right to the program and I want to try to

we’ll speak to it right now.

1 2 3 4 5 6 7 8 9 gum up the entire estate, well, sure, we’ll talk to the Attorney General. I don’t understand, but we’ll grapple with the merits of her claim but the merits of her criticisms with the program is why Mr. Feinberg is here and and I’m asking questions and why the Plaintiffs, I presume, are defending the program. I’m just saying they don’t have any merit and I want to move on.

10 11 12 13 14 15 16 17 18 19 20 THE COURT: You talked to the Attorney General. I let you address the Attorney General’s concern. My concern was how much money are we talking about to fund the program for this Court to approve and you say to the executors, you can fund this program; you can set this up, right. didn’t go into the merits of the program because I have where all the claims that are filed, everybody said they support the program.

21 22 23 24 25 The issue is, and I keep bringing it back, is how does this Court fund this program if I have what the Attorney General has set an action in process in the civil court and has filed a lien that says you

1 cannot use any assets of the estate?

2 3 4 5 Wouldn’t I have to move significant assets over to this program if you are going to compensate victims within 12 to 14 days? That’s what it is.

6 7 8 9 10 11 But you’re saying the Attorney General, whether or not she’s not compensating any particular victims, she is seeking to compensate the People of the Virgin Islands - that is her client. That is who she represents.

12 13 14 15 16 17 18 Now, if you want to go over to the civil court and say she has no merits to say I should take what the estate has, that the People can’t show why she should be entitled to that —and I see it in the complaint —and I did have the Complaint before me.

19 20 21 22 ATTORNEY TOMBACK: Well, to be honest, I don’t want to get into the merits but it’s not quite as simple as the Attorney General might think.

23 24 THE COURT: But that is not for me to determine, right?

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THE COURT: Another Judge is going to handle that.

ATTORNEY TOMBACK: What I want to say are two things. One, in terms of what the Attorney General can do here, you know, there are other law enforcement authorities. There is a house in New York; there’s a ranch in New Mexico; and it will be a shame if the Attorney General, as I understand it, has not been in contact with the United States Attorney General for the Southern District of New York which still has the active investigation going. It would be a shame if we have a battle between law enforcement agencies and it destroys the ability of the estate to address the victims.

Your Honor, I just want to say on my own behalf that I hope that the Attorney General, through the presentation of III and Mr. Feinberg that she could at least claim to be interested in the victims and I think that we have tried to make a case to her here that this is a good program that will help the victims.

1 2 3 progress in figuring out how much the Attorney General needs in terms of cash in the estate to let the program go forward.

4 5 6 7 8 9 10 11 12 THE COURT: Maybe that is what you have to talk to the Attorney General about. That is why I keep saying maybe the estate needs to talk to the Attorney General and the Attorney General will say, you know what? I filed this lien, but maybe I will release so much to fund the program, but to me, the Attorney General has taken a lien on everything this estate has.

13 14 THE WITNESS: Your Honor, may I be heard just in response?

15 THE COURT: Sir?

16 17 18 THE WITNESS: This has happened occasionally in other programs that I’ve designed.

19 THE COURT: Okay. Somebody help me.

20 21 22 23 24 25 THE WITNESS: For example, sometimes the Government says we’re interested in seizing or freezing the assets because we want to make sure that through restitution and civil and criminal fines there will be enough money available from the estate to compensate

1 eligible victims.

2 3 4 s 6 7 8 Well, in this program, I would hope based on the testimony that the AG of the Virgin Islands will see no reason to freeze for purposes of restitution and fines owing to the victims because the victims, under the estate plan, will be compensated quickly without regard to the public intervening.

9 10 11 12 13 14 15 16 17 18 19 20 And the second point I think you’ve made very very clear. In my experience that if the estate and distinguished Counsel sit down with the Attorney General now that the Attorney General has a better understanding, I think, of the program that Your Honor has elicited from the testimony, I would like to think that the Attorney General and distinguished Counsel shall be able to work out a solution for these women, the innocent victims of this delay. That’s the real dilemma here.

21 22 23 24 25 THE COURT: Right. And that’s what I am saying because, right, if we have the lien and it’s a question of, remember we said we have to go and research it, what is that lien? That lien seems to take everything

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because it begins with the estate and all these assets are sitting in the estate held by the decedent, right, of these corporations, all the shares and all these shares, the corporations own the real property. So title is in the decedent.

So the Attorney General has come in and she put a lien on all that property. Even if I wanted to fund that program, what could I safely move over to that program that doesn’t impact what I’ve now been put on notice there’s nothing that I can transfer.

And so I think we now understand the program and I thank you for your testimony and . We now understand the program better, right, not just on paper but understanding how it will work through your testimony.

Claimants attorneys have heard the testimony on how this program is designed to work. We may just need to tweak with the development of the release, the protocol has been changed in some way. Can it be that this Court can safely, with the consent of the Attorney General, move so much money into that

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program to then allow that program to proceed to start compensating the victims/claimants in the manner in which Counsel present want it done without impacting what the Attorney General believes she has to do as her legal representative of the People of the Virgin Islands? Can that be something that can be done?

I’ve heard it all today, but I keep saying, I have this lien. I know she opposes—and you know what? I don’t even think the Attorney General has to go to oppose the program. All she had to do is file a lien; you’re stopped. I filed a lien and you’re stopped, right?

ATTORNEY TOMBACK: But just to put a fine point on this, Your Honor, and Mr. Feinberg used the word tragic; I would use the word waste. But if a terrible waste if the way in which the Court views its jurisdiction and the Attorney General views its responsibilities, we’ll see the estate really getting, and able to pay for litigation and ultimately probable able to pay for claims simply because there are enough assets in the

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United States to pay for those claims, but to go down that road and not be able to fund the program which is a much better option, I think for all. So we will work with the Attorney General to get something done.

THE COURT: I keep thinking you are missing what I am saying. She has taken a lien on the entire estate. She’s not taking a lien on Little St. James only. She’s taking a lien on the entire estate and say no assets can be taken out and her lien is a priority lien. It specifically says nothing can be taken out so if I approve the funding of the program, you start talking, the claimant’s come in; you start awarding claims. You know what I asked , so can I then tell the victims, now just wait until whatever resolves itself down here in the VI and you said no. That defeats the whole purpose of the program. Right? And we can have claims where it could be a multi-million dollar claim that a person gets or you would have thirty cases so far. Thirty people, all get 20 million dollars. Well, now the executor has to be able to pay over this money but we have

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this action going on that no, he can’t.

So it has to be worked out with something either hold back to some extent and the Attorney General say, yes, I understand now. This program has been fully presented. The claimants attorneys are all in support of it because it will give quick resolution for settlement of these victims. They can be compensated. There’s a spread, depending on what evidence they present but we need to be able to move so much of those assets of the Epstein estate over there to that program. And I think it just comes to that.

So talk, I think you people need to talk; the two sides need to speak. I’ve not allowed the Attorney General to intervene so the AG did not hear any questions but I’m still left where I know that I have been put on notice that this lien is there.

UNIDENTIFIED SPEAKER: Your Honor?

THE COURT: Yes.

UNIDENTIFIED SPEAKER: If I may, we filed a supplemental brief in this matter, Your Honor.

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ATTORNEY KROBLIN: It does address the issues Your Honor has raised.

THE COURT: Did you file a Supplemental brief? When?

ATTORNEY KROBLIN: Yes, we did. Last Friday.

THE COURT: Last Friday?

ATTORNEY KROBLIN: Yeah.

THE COURT: What is the date?

ATTORNEY KROBLIN: The 31st.

THE COURT: Okay, then I have to get to that. And you addressed that?

ATTORNEY KROBLIN: It addresses the issue, one about the priority of the lien, Your Honor. The Attorney General, when they filed that says that the lien takes priority, they cut off the last sentence of the Statute and it clearly says that the lien takes priority and it says overall interest if the interest is acquired subsequent to the filing of the notice.

THE COURT: That’s a beneficial interest in it.

ATTORNEY KROBLIN: Yes, Your Honor. But what we’ve addressed is that the lien

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doesn’t actually have a super priority; it has other things come before it and it’s the issue of priority. And we also filed in the brief that we believe because the decedent died and the money went to the estate, this Court took control of the money. It’s not some other Court that has control of the money; they didn’t file the lien prior to the death so therefore this Court has control of all of decedent’s money and the distribution of it.

They can file a lien and seek for a claim in this court, but as far as freezing the assets, we don’t believe that they can and it’s addressed in our Supplemental Brief.

THE COURT: Okay. I may have overlooked that. Then I will find that.

ATTORNEY KROBLIN: Thank you, Your Honor.

ATTORNEY : Just the same, we would like an opportunity to respond, Your Honor, cause we just got it on Friday. Sorry, we got it yesterday at five clock by mail so they didn’t really want to have us have an opportunity to respond.

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THE COURT: Well, Okay.

ATTORNEY KROBLIN: That’s not true, Your Honor.

ATTORNEY : It is true.

THE COURT: Okay. The bottom line is, Attorney Kroblin, I’ve not seen it.

ATTORNEY KROBLIN: I understand, Your Honor. I just wanted to bring it to the Court’s attention.

THE COURT: I’m going to look at it. You may have given me where I can begin the research on this.

ATTORNEY KROBLIN: Yes, Your Honor.

Just as far a briefing goes for us to understand whether the Government, the lien, cause in its papers that has been filed although the lien seems very broad in the papers that they’ve filed, they say they didn’t want to impede in any way the victims and their being compensated.

THE COURT: I did note that.

ATTORNEY KROBLIN: So it seems that the Government actually has carved out from the lien what would be this program and any payment to victims. So we would like some

1 2 3 4 clarity on the Government’s position whether it’s actually seeks to impede the process of paying victims or if the lien specifically carves out the program of the victims.

5 6 7 ATTORNEY : You are free to speak to the Attorney General about that issue.

8 9 10 THE COURT: Yes, we know. He is just a designee here. What is the extent of the lien, correct?

11 ATTORNEY : Yes.

12 13 THE COURT: And I read the extent of the lien to be everything.

14 15 ATTORNEY : That is what it provides, Your Honor.

16 17 18 THE COURT: But you said you had a Supplemental Brief and I would definitely look for that.

19 20 21 ATTORNEY : And, Your Honor, we would just ask for a seven-day period to respond to that.

22 THE COURT: A seven—

23 ATTORNEY : Seven days.

24 25 THE COURT: II, I thought you said seven weeks.

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ATTORNEY : No. Seven days to respond to it because we just literally got it yesterday afternoon at 5 o’clock.

THE COURT: Sorry. You may step down from the witness stand.

[Witness excused]

You know what? So the Court is going to—I’ve now received the testimony of the interested parties concerning this Voluntary Claims Resolution Program. I’m going to allow persons to file in seven days, you have the response to the Supplemental Brief —I do have to find that—any claimants’ attorneys who wish to file any memorandums of law or anything what you believe can guide the Court, again the seven days.

This Court is going to make a quick turn around on its decision concerning whether it can go ahead to fund this program, yes or no on the motion that you have. So is that fair enough, seven days?

ATTORNEY : To file the brief, Your Honor, yes.

THE COURT: And anybody else, file any response, any information, any guidance,

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 any memorandum of law that you believe will assist the Court, because I think I’ve dealt with all motions before this Court. The only one remaining is the creation —no, the funding of this program through the assets of this estate. Correct, and will be determined then how the Court reads that lien that has been filed by the Attorney General and in the time where you are preparing your briefs or your memorandum of law or whatever you believe you need to file with the Court, I ask both sides, Attorney , Attorney Tepper, please, Attorney Blum, Attorney Kroblin, Attorney Whalen, and all the attorneys for the estate, to see if we can meet cause I understand the Attorney General’s position and her arguments, but I also understand what the estate is trying to achieve as to the victims, the alleged victims who are represented by their counsels who wish this program to be put into place so they can proceed because I really agree, the program is going to save time and money and especially in attorneys’ fees. It has to be a more effective way of marshalling the assets than both sides

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engaging counsel going into courts; but I have to understand how, why I’m researching to see if this lien just tie up everything of the estate. Maybe the parties on their own could come to some resolution and say wel have so much money, give it to the program; fund the program to allow those victims to get their compensation to get their relief and then we’ll fight whatever we have to fight in the civil forfeiture proceeding. Fair enough?

ATTORNEY : Thank you, Your Honor.

EA o

THE COURT: Thank you, everyone. (Hearing Adjourned)

Certificate

Certified to be a true and accurate transcription of said hearing to the best of my ability.

S/S 67i;1111 Bell, RPR,RMR

Stenographer

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