| | ban I | | Page 3 | | -------- | ------------------------------------------------------------ | --- | ------------------------------------------------------ | | | UNITED STATES BANKRUPTCY 0OURT | | THE COURT: Rothstein Rosenfeldt & Adler. | | I | SOUTHERN DISTRICT OP FLORIDA | I | | | 2 | | | 2 MI right May I have appearances, please? | | 3 | | 3 | MR. LICHTMAN: Good morning, Judge. | | 4 | | 4 | Chuck Lichtman, Berger Singerrnan, for the trustee. | | S | CASE NO.: 09-34791731CCREM | 5 | MIL NEIV/IRTH: Good morning, your Honor. | | | 6 In Re. | 6 | Ronald Neivrinh, Fowler White Burnett, on behalf of | | | 7 ROTHSTEIN ROSENFELDT ADLfl. P.A, | 7 | the movant, Epstein, and with me today are two of my | | s | Debtor | 8 | partners, Chris Knight and Lilly Ann Sanchez - | | | | 9 | MS. SANCHEZ: Good morning, Your Honor. | | 9 | | 10 | MR. 1O41O111: Good morning, your Honor, | | 10 | | II | MR. NESVEZTH: — both of whom are MOTE | | ti | MOTION TO COMP ILPRODUCTTON OF DOCUMENT'S FROM TRUSIta, 12 | | familiar with the State Court angle on this than 1 | | | 12 PURSUANT TO COMMENT PRCOUCTION PROTOCOL BSTABLISHED 13 | | am, so they came along to be able to elucidate that | | | | | | | | BY DB0672 (S07), AMENDED MOTION FOR PROTL'CTIVE ORDER | 14 | end of It. | | 13
14 | (SIR) | 15 | MR. FARMER: Good morning, your HOME | | 15 | August 4,2010 | | 16 Gary Fanner on behalf of LM, Brad Edwards, and | | I6 | | 17 | the Fanner Jaffe Wasting law firm. We are an | | 17 | The ahow-cndaal ass mit on for | 18 | interested party and have filed a motion for | | | 111 Menne MAN as HONORABLE RA1040761B. RAY | 19 | protective order as to the subpoena that is at | | | 19 once:: de Naga oft UNITED STATES BANKRUPTCY | 20 | issue here today. | | | 20 COURT, m end fel the SOUTHRRN DIST/UCT OF FLORIDA. | 21 | THE COURT: All right Insofar as the | | | 21 el 799 Ear! Browsed Bad, Fr LatelerdaM/3704444 | | 22 TD Bank motion, Docket Entry 780, that has been the | | | 21 Carney, TIMM on Tondo, Mom 4, 2010, | 23 | subject matter of en agreed order that was submitted | | | 21 omemendng Mei Mos 9130 ant, se4 the knave% | | | | | 14 proccedino were had: | 25 | 24 to me.
MR. LICHTMAN: Correct, Judge. | | 25 | Repotted By: Mutant Franz= | | | | | | | | | | | | | | | Page 2 | | Page 4 | | 1 | APPEARANOIS | 1 | THE COURT: Mr. Scherer. | | 7 | | 2 | MR. SCHERER: Yes, sir, your Honor. | | 3 | BERGER 8/910BILMAN. try | 3 | I'm William Scherer and I'm here on behalf of a | | 4 | CHARLES H. WHOA" ESQUIRE
on WINIIM Ea Emote | 4 | number of victims in the State Court action, as | | s | | | Wen aS the chairman of the creditors' committee | | 6 | CONRAD & SCHEItElt, by | \$ | | | | WILLIAM R. SCNEKO, ESQUIRE | 6 | In the banIcruptiry. | | 7
s | on beloiltofeictkret | 7 | THE COURT: All right. That leaves us with | | 9 | FOWLER MITE. BIJRN6TT, by | 8 | Docket Entry 807 and 819. 807 is Jeffrey Epstein's | | | RONALD 0. M3TWIRTIL ESQUIRE | | 9 motion. | | 10 | LILLY ANN SANCHEZ, ATIORNEY•AT.LAW | 10 | MR. NEIWIRTH: Thank you, your Honor, and | | 11 | CHRISTOPHER E. KNIGHT, ESQUIRE
JOSIEN L ACKERMAN, ESQUIRE | 11 | again, good morning. We represent Jeffrey Epstein. | | | on beluntotkahy Epstein | | 12 He has a civil claim pending in State Court in | | 12 | | 13 | Palm Beach County. He had served a subpoena on | | 3 | FARMER JANE WEISSINO EDWARDS P1STOS & LEHRMAN. by | 14 | Mr. Stettin requesting documents from the RRA estate. | | Ye | GARY FARMER. ESQUIRE | 15 | That was back in April. | | | BRAD EDWARDS, ESQUIRE | 16 | While this was still in process, in | | 15 | on. MINN of LEL Brad Edon and | 17 | | | 16 | Fumy Rae Wtimag Edwin% Fatal & ',Orman | | May, tinder Docket Entry 672, your Honor entered | | 17 | | 18 | an order standardizing procedures for obtaining | | | | 19 | discovery from Mr. Stettin and the RRA estate, | | IS | | | 20 and at /cast on the face of it, it takes | | 19
70 | | | 21 jurisdiction ova all discovery efforts against | | 21 | | 22 | the trustee. That left us in a quandary. | | n | | 23 | We had a subpoena pending in State | | 73
24 | | 24 | Court. We had correspondence from Berger | | 75 | | 25 | Singerman on behalf of the trustee dist they had | OUELLETTE & MAULDIN COURT REPORTERS, Pegs 5 Pies? identified information and they were processing I taken jurisdiction over these discovery matters it, including vetting for attorney/client 2 and attempted to standardize discovery efforts privilege issues, but then In the meantime carne 3 for the trustee. There's a lot of people that your Honor's order on May 18th, so we had to go 4 want things from the trustee. back and reinvent the wheel and go through the 5 The trustee is overseeing an estate necessary hoops in order to comply with that 6 which involved somewhere in excess of 70 lawyers In the meantime, as we sit here now, we 7 and lots of cases and lots of problems, and still have no production. We have a trial date 8 literally millions of documents, and we have coming up in October, and we have a motion for 9 absolutely no problem with the standardized protective order coming from a party who's 10 order, but that means that somehow or other wo already settled out, the LM party. They DO 11 have to be able to deal with it in a standardized longer have anything directly to do with this. 12 manner, instead of Mr. Flumes suggestion, which Further, we are advised by the I3 is go back to Slate Court and deal with it over creditors' committee that in addition to what was 14 there. proffered to us, that at some point In time there 15 THE COURT: What is the status of the State had been something like ten boxes of records 16 Court proceeding? pertaining to these particular issues and someone 17 MR. NEUWIRTH: May 1 defer to my partner, on behalf of the victims had been given, or 18 who is more familiar with that? several someones, had been given access to those 19 MR. KNIGHT: Your Honor, Christopher ten boxes and had viewed them, which would 20 Knight, if I may? While we were waiting for the vitiate any attorney/client privilege in any 21 documenu from the Stettin office, we obviously event 22 wanted to go down two tracks because we had an So what we are trying to do is fashion 23 October trial date. The status of it is we could not a mechanism so we can comply with your order, 24 come to an agreement with the other side. Docket 672, about standardized means of getting 25 Mr. Ackerman was at the last beating, in which the Page6 h&c 8 I production from the trustee, allow for the 1 judge said, one, !need a representative of the appropriate vetting of the materials for 2 mines here and two, shouldn't this be back before attorney/client privilege, and we must bear in 3 you, Judge Ray. mind that this is one objector, there's a lot 4 THE COURT: You can't proceed against more documents than that 5 Rothstein in the State Court, they're here. To the best of our knowledge, the 6 MR. KNIGHT: And that Is the same thing I documents that pertain to the LM party, who is 7 think Judge Crow recognized, and that's why we're settled anyway, may be 15 percent of those which 8 back here, and that's why we had to file the motion. are responsive to the Inquiry that we made of the 9 MR. ACKERMAN: The claim against trustee, but in any event, someone has to vet 10 Rothstein is against him Individually, and it's II them for attorney/client privilege and do a 11 against Brad Edwards individually, and it was privilege log. 12 against one of the claimants, 12A individually. Now, Mr. Farmer's office on behalf of 13 '11W COURT: So It's not against the debtor LM wants to do that We don't think Mars 14 estate. appropriate. We third\* the privilege at this 15 MR. ACKERMAN: That's correct. point, since the case is settled, lies with RRA 16 MR. KNIGHT: Just to go a little further on and, therefore, the trustee, rather than 17 what Mr. Neiwinh was saying. Out of these documents Mr. Farmer and his client, because as to them the 18 we've been asking for fora long time, very few of case is ova. 19 them would even have privilege on their face because Furthermore, we don't think them is 20 they have nothing to do with the clients that were any privilege because the boxes have been vetted 21 represented, what's bees called as LM. before and we'll hear more about that from 22 If there's going to be a log, if Mr. Scherer, I assume, because he was the one 23 there's any need, which I don't think there is that was aware of that. 24 because I think privilege has been waived, it And last, but not least, your Honor has 25 needs to be a log put together by the trustee, (Poses 5 to 8 OUELLETTE & MAULDIN COURT REPORTERS, INC. | Pupil
Page 9
1
everybody first
not anybody else that has some sort of interest
I
MR. KNIGHT: Okay.
2
in it.
2
MR. FARMER: Thank you, your Honor, may it
3
If there's a problem with payment for
3
please the Court Again, Gary Fanner on behalfof
those, et cetera, our client has already offered
4
4
the interested party, LM, also on behalf of
to the trustee, to Mr. Lichtman, we will pay for
5
5
Brad Edwards and I'm sorry, your Honor, Mr. Edwards
it, whether ifs a special master or whether it's
6
6
is here with me. I neglected to Introduce him to S
7
a contract attorney, if they need to do that, but
7
Court earlier.
8
1 don't think wo even need to reach that.
8
MR. EDWARDS: Good morning, your Honor.
9
Idris& these documents are long
9
MR. FARMER: There has been a lot of
10
overdue. They have been produced to others, they
10
discussion here about your Honor's standardized
11
have been used in depositions for others, they
11
production order and I think that you need to
12
12 are out there, and ! think the privilege Issue is
understand that this particular matter, which is
13
13 just being used as a smoke screen to keep our
before you today, is anything but standard or common
14
client from being able to get the documents he
14
to the matters before this Court
15
needs to be able to prove his case.
15
You need to understand the nature of
16
Thank you.
16
the ease. Jeffrey Epstein is an admitted
MR. ACKEMAN: Your Honor, one other
17
17
convicted pedophile. He sexually assaulted
matter. Judge Crow expressed a concern about
18
18
19 dozens and dozens of young girls under the age of
entering any order against the trustee or his
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15. He pled guilty to this and he has settled
20
counsel without them being present
20
every civil lawsuit filed against him on this
21
Initially we had filed a motion to
21
issue.
22
compel in the State Court, but we didn't realize
22
Despite all of this, Mr. Epstein has
23
at the time or It was unclear, because we had
23
seen fit to file a lawsuit against LM, who is one
24
just taken over the case from another law firm,
24
of the plaintiffs against him; against
25
25 that the Court had entered its order.
Paz: lo
Brad Edwards, LM's attorney; and against
1
There was some discussion prior to the
1
2
Mr. Rothstein.
hearing and when we went to the hearing, it was
2
Now, Edwards, myself and all the
3
clear that there was no agreement that had
3
members of our firm were RRA attorneys when
4
existed and Judge Crow said, I'm not entering en
4
Mr. Rothstein took his ill-fated trip to Morocco
5
order, I'm not doing anything on this motion
5
and did the things which are now so well known,
6
undl the bankruptcy trustee is represented.
6
but the fact of the matter is that this discovery
Ho was concerned because this Court's
7
7
request ls a blatant attempt to obtain clearly
8
order had set up the standardized procedure for
8
privileged documents related to the
dealing with these arguments and had reserved
9
9
representation of LM and many other victims, by
10
10 jurisdiction relating to any subpoena or request
the way.
11
for documents from the trustee. so that's why
11
And if 1 can show your Honor a copy of
12
we're here now.
12
the subpoena itself, I don't think that the
13
THE COURT: All right.
13
breadth of the subpoena has been adequately
MR KNIGHT: Your Honor, just one other
14
14
represented to the Court. If you peruse this,
point. We tried to work, and we've been working with IS
15
you will see they are asking for communications
16
Mr. Lichtman, tried to work out a protective order
16
with private investigators, they're asking for
17
between the trustee and Epstein regarding the
17
contingency fee contracts, they're asking for
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subpoena. Mr. Lichtman and Ms. Sanchez agreed to
18
19 every comnamicadon between any member of the
language on it I have a copy of it.
19
firm, and they throw Rothstein in just to make it
Mr. Farmer, with his motion for
20
20
sexy, about these cases.
21
protective order, would not agree to that, but if
21
Now, your Honor. clearly communication
22
the Court would like to have a copy of what the
22
about the representation of a client falls under
23
draft was, I will approach your clerk, but if you
23
not only the work product, but if the client is
24
do not want that, I also —
24
involved in the communication, also the
25
THE COURT: Well, let me hear from
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| --- | ------- | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 12 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (Pages 9 to 12) OUELLETTE & MAULDTN COURT REPORTERS, INC. Case 9:08-cv-80893-KAM Document 214-3 Entered on FLSD Docket 09'02,2010 Page 4 of | | Pagel) | | PRIM | | ------ | --------------------------------------------------------------------------------------------------- | --- | ---------------------------------------------------- | | 1 | attorney/client privilege. | 1 | Mr. Scherer's clients, who have claims before | | 2 | Now, most of this stuff we've already | 2 | this Court, and hopefully they will get some form | | 3 | responded and said none, nono, none, but for many | 3 | of relief from the Bankruptcy Court Epstein is | | 4 | of these items, we have asserted the privilege | 4 | not seeking any bankruptcy assets. He's suing | | 5 | and we continue to assert the privilege. | 5 | Brad Edwards and LM personally, and Scott | | | Now, the only reason the trustee is | 6 | Rothstein, and ifs ratan estate claim, it's | | 6 | | 7 | against Scott Rothstein personally. | | 7 | here —
THE COURT: Walt, there's been a privilege | 8 | So my suggestion, your Honor, is that | | 8 | asserted in the State Court proceeding? | 9 | you instruct the trustee to turn this electronic | | 9 | MR FARMER: Yes, air. | 10 | documentation information over to us. We will | | 10 | THE COURT: And there is a privilege log | 11 | file the appropriate privilege log with the | | 11 | and the judge has made a ruling? | 12 | Circuit Court judge who is presiding over the | | 12 | MR. FARMER: No. The dispute now really is | | 13 case, who is most familiar with the case, who | | 13 | 14 over who's going to file the privilege log and | 14 | will be considering the upcoming motion for | | | | 15 | summary judgment, and possibly trying the case, | | 15 | respectfully, Judge, what we suggest is that the
trustee has been thrust into this matter simply | 16 | and that way your Honor is not burdened with this | | 16 | because the trustee stands in the shoes of all the | 17 | matter, the trustee does not incur fees and | | 17 | | 18 | expenses of having to go through all of these | | 18 | former attorneys at RRA, and the trustee is likewise | 19 | document, prepare a privilege log and our | | | 19 bound by the privileges that attach to the eases and | 20 | client and Mr. Edwards — Mr. Edwards is also a | | | 20 to the lawyers that were at the firm. | 21 | party of that lawsuit He enjoys his own | | 21 | The trustee has repeatedly acknowledged | 22 | privilege, your Honor, over and above, or in | | 22 | the fact that it Is bound by those privileges | 23 | addition to, I should say, the privilege | | 23 | and, of course, as your Honor knows, the | 24 | possessed by our former client and, of course, I | | 24 | privilege belongs to the client, not to any | | 25 know couasel knows that the privilege extends | | 25 | lawyer or any law firm. | | | | | Pop 14 | | rats it. | | 1 | So the trustee is really kind of stuck | 1 | beyond the litigation. | | 2 | in the middle here. You've got the pedophile who | 2 | So although Mr. Epstein paid a ton of | | 3 | wants documents related to the cases he's already | 3 | money for this claim that is supposedly | | 4 | settled and pled guilty for. Those documents, | 4 | frivolous, it has been settled, but the privilege | | 5 | the electronic documents, at least, the e-mails, | 5 | still extends and it remains in place. So we | | 6 | electronically stored Information is how ifs | 6 | simply want to make sure that our investigative | | 7 | referred to in the discovery request, your Honor, | 7 | materials, our reports, other documentation | | | are not In ow possession, they are in the | | 8 relating to the claims we have and have had | | 8
9 | possession of the trustee because the trustee | 9 | against Jeffrey Epstein are not put into the | | | | | 10 hands of Jeffrey Epstein's attorneys. | | 10 | took the computer system.
So the trustee doesn't want to incur | I I | Now, we just want the chance to review | | II | the cost and expense of filing a privilege log | | 12 these documents and prepare the privilege log and | | 12 | and, frankly, I don't know that the trustee has a | 13 | the trustee is kind of stuck In the middle here, | | 13 | full appreciation of the nature and specific | 14 | Judge. Remove the trustee from the equation, let | | 14 | facts of the cases that would enable it to | 15 | us get the documents, we'll file the privilege | | 15 | | 16 | log, and then Mr. Epstein and us can go before | | 16 | conduct a complete privilege log.
So my suggestion, your Honor, and it's | 17 | Judge Crow. He can review the privilege log, | | 17 | | 18 | review the documents in camera. | | 18 | been rejected — I believe ifs acceptable to the | 19 | All that is going to be pretty time | | 19 | trustee, but ifs been rejected by Mr. Epstein's | 20 | consuming, but he's much more suited, a better | | 20 | counsel, is the trustee be removed from this | 21 | suited judge because he's more familiar with the | | 21 | equation. There's no need that we come back | 22 | facts to engage in that inquiry. | | 22 | before you. | 23 | THE COURT: Thank you. | | 23 | This case, this Epstein case, is not a | 24 | MR. FARMER: Thank you, your Honor. | | 24 | matter which would involve bankruptcy estate | 25 | THE COURT: Mr. Lichtman, Mr. Scherer, your | | 25 | assets going to Mr. Epstein. Unlike | | | (Pages 13 to 16 ### OUELLETFE & MAULDIN COURT REPORTERS, INC. EFTA00235304 Case 9:08-cv-80893-KAM Document 214-3 Entered on FLSD Docket 09'02,2010 Page 5 of | | Posen | | Page 19 | | --- | ------------------------------------------------------------------------------------------- | -------- | ------------------------------------------------- | | I | input, please. | 1 | allegations in the LM case that they knew were | | 2 | MR. LICHTMAN: I'm going to let Mr. Scherer | 2 | not true, in order to entice my clients into | | | | 3 | believing that Bill Clinton was on the airplane | | 3 | go first.
MR. SCHERER: I think he wants me to go | 4 | with Mr. Epstein and these young woman and other | | 4 | | 5 | personages, I can't remember who they are, and | | 5 | first. | 6 | all sorts of other allegations that really were | | 6 | THE COURT: All right.
MR SCHERER: Your Honor, in November | 7 | not even related to the LM case. | | 7 | we filed a lawsuit in State Court and we alleged | 8 | And to the extent that any lawyers from | | 8 | | 9 | the RRA finn, former lawyers, made a ton of money | | 9 | that as a part of Mr. Rothstein and the firm, and | 10 | or however Mr. Farmer talked about it, we're | | | 10 the firm's employees, and maybe some of the | 11 | interested in that ton of money because if they | | | 11 firm's attorneys, conspired to use the Epstein/LM | 12 | were involved In this scheme, this fraud, there's | | 12 | litigation In order to lure \$13.5 million worth | 13 | a crime fraud exception, and in addition, I want | | | 13 of my victims, my clients, into making | 14 | to see the ten boxes that they brought down. | | 14 | investments in these phoney settlements. | 15 | The trustee does not have those ten | | 15 | And as we alleged in that State Court | 16 | boxes. Those ten boxes were taken by Mr. Edwards | | | 16 proceeding, and we've sharpened the allegations | 17 | when he left the law firm, I presume. So we want | | 17 | as we've amended a few times, we allege that | 18 | the ten boxes, we want all the communications and | | 18 | sometime in late October, that my clients were | 19 | we want to look through everything on behalf of | | 19 | invited into the Rothstein finn with | | 20 my State Court ease, but also on behalf of the | | | 20 Mr. Rothstein, and he explained that he bad a | | 21 creditors' committee because the creditors' | | | 21 litigation going in State Court with Mr. Edwards | 22 | committee is looking to see if anybody else in | | 22 | representing LM, a victim of Mr. Epstein, and | 23 | the firm, other than Rothstein, was Involved in | | | 23 these are kind of sensational allegations and | 24 | this massive fraud that used the Epstein case. | | 24 | it's been printed widely. | | The model of using an existing case and | | 25 | And my clients, a number of them and | 25 | | | | Page IS | | Fate 20 | | | 1 their lawyer, went into the Rothstein conference | | then spinning off a fraud from it is the same | | | room and Mr. Rothstein brought down — summoned | 2 | that was perpetrated on the Morse — in the Morse | | 2 | the investigators, two of than, two or three of | 3 | situation, as has been alleged and widely | | 3 | them, to bring down the Epstein file. And the | 4 | produced. | | 4 | | 5 | I can't conceive that Mr. Edwards and | | 5 | lawyer that my clients brought from a national | 6 | the predecessor law firm would have any standir.g | | 6 | finn, went through the LM boxes, ten of them that | 7 | to prepare privilege logs or anything else, given | | 7 | the investigators brought down, and concluded | 8 | what 1 just told the Court. That would be like | | 8 | that the Epstein case was a real case. | 9 | having the fox guard the hen house. That Epstein | | 9 | And what Mr. Rothstein did with that | 10 | case is settled, and to the extent it's the ten | | | 10 real ease, of course, is he told everybody that | 1 t | boxes of stuff that we looked through, and I'll | | | 1 not only did he have the LM client of | 12 | have to get the boxes to see if the attorney who | | 12 | Mr. Edwards, that that were a number of other | 13 | looked through them, and how much time he spent | | 13 | young ladies, that was widely published in the | 14 | looking through than — | | 14 | newspaper, that the fists was representing and | 15 | THE COURT: Where are the ten boxes? | | 15 | that wanted to settle with Mr. Epstein on a | 16 | MR. SOBERER: That's a good question. | | | 16 confidential basis. | 17 | The trustee does not have the ten boxes. I | | 17 | So he used the real case in order to | 18 | presume the ten boxes are residing with the | | 18 | defraud my clients into investing into these | 19 | lawyers who took the case, Mr. Edwards and the | | 19 | phoney settlements and paid 13 and a half million | | successor law firm. The trustee does not have | | | 20 dollars. I believe that Mr. Rothstein and others | 20 | them. And then in addition, there's about 6,000 | | | | | | | | 21 in the firm also told that story to a lot of | 21 | | | | | 22 | e-mails that the trustee has, and I bet you when | | 23 | 22 other people, and let a lot of other people
examine those ten boxes of the real case. | 23 | we look at Qtask, there's going to be a boatload | | 24 | In addition, as we have alleged, that
Mr. Edwards and the firm put sensational | 24
25 | more.
My clients were also advised during | (Pages 17 to 20) OUELLETTE & MA DIN COURT REPORTERS, INC. | | Pars?! | | Pie 23 | | --- | -------------------------------------------------------------- | --- | --------------------------------------------------------------------------------------------- | | I | their due diligence, short due diligence to | 1 | to take those ten boxes to start with. | | 2 | settle these cases with these young ladies — | 2 | THE COURT: All right Mr. Licluman. | | 3 | these putative young ladies who had to get the | 3 | MR. LICHTMAN: Good morning, Judge. Inn | | 4 | money and leave town because of whatever the | 4 | going to try to walk you through sort of | | 5 | stories were, that there were other members of | 5 | chronologically the trustee's perspective of what has | | | the firm that told my clients that they, indeed, | 6 | happened here. I think that what Tve heard from all | | 6 | had even identified more of these victims that | 7 | the parties are comments that aro correct, and not | | 7 | Mr. Rothstein didn't even know about at that | 8 | necessarily correct, and Pm not suggesting | | 8 | | | falsehoods. We Just have kind of a different | | 9 | time. So we know it wasn't just Mr. Rothstein | 10 | perspective of some things and there arc some points | | 10 | spinning the talc, there were a lot of people in | 11 | that ought to be corrected. | | 11 | the firm. | 12 | Mr. Stettin received a subpoena in a | | 12 | We've alleged almost all of this in ow | 13 | Palm Beach State Court action for production of | | 13 | State Court action that we filed in November, up | 14 | documents, and as we had done In virtually every | | 14 | to where we are right now, but, your Honor, 1 | Is | | | | 15 think your Honor is going to have to deal with | | subpoena, we went to ow forensic accountants,
the Berkowitz Dick Pollack & Brant firm, and | | 16 | these issues in this court and I would urge you | 16 | said, okay, we need to produce c•mails and we | | | 17 to have the trustee get involved and let the | 17 | | | | 18 trustee do its job with respect to whether there | 18 | need to also then, with the staff that we have at | | 19 | are privileges that need to be protected, work | 19 | Berger Singennan and elsewhere, and look to see | | 20 | product or attorneyklient privileges, given | 20 | if there an any hard documents that we can find, | | 21 | what's going on, and I believe the trustee will | 21 | notwithstanding what we'll call the issues as to | | 22 | be investigating whether the trustee wants to | 22 | the RRA bard drive that contain client files. | | 23 | bring any claims on behalf of the estate by | 21 | We quickly realized that this Is a | | 24 | virtue of what I've just laid out for you. | 24 | claim different than all of the other subpoenas. | | 25 | Thank you. | 25 | The subpoenas that we had been receiving from | | | Page 22 | | Piss, 24 | | 1 | THE COURT: So your lawsuit in State Court | 1 | virtually every other party in the case were | | | names these people as defendants? | 2 | requests for production of documents related to | | 2 | MR. SCHERER: It names Rothstein. It | 3 | claims that those moving parties or requesting | | 3 | does not name Mr. Edwards. It just names | 4 | pasties would have as it pertains to them trying | | 4 | Rothstein, not the finn, and lays out the facts | 5 | to recover some aspect of money as pertained to | | 5 | | 6 | the Portal scheme. | | 6 | and says other people in the firm. We did not | 7 | Okay. Lie Mr. Scherer, who said 1 | | 7 | name them because we want to see the documents | 8 | need a bunch of documents, cm you help us? So | | | and see whether they had involvement. | 9 | we would enter into, on a one by one basis, a | | 9 | But the facts that I have alleged for | 10 | protective order that was very, very tightly | | 10 | you, your Honor, is pretty much what I've alleged | II | negotiated. There is no standard form protective | | | in my first through third amended complaint in | | | | II | | | | | 12 | State Cowl. | 12 | order in this case, contrary to what everybody | | 13 | THE COURT: So, in essence, your position | 13 | has told you. We have a form that we use, and | | 14 | in this matter would be to support the motion to | 14 | everybody that has come to us, we said, we need | | 15 | compel and deny the motion for protective order? | 15 | to have a protective order in place -- | | 16 | MR. SCHERER: Yes, sir, notwithstanding | 16 | THE COURT. We have Docket Fatty 672, which | | 17 | that Ms. Epstein is a convicted pedophile. I | 17 | apparently is the document production protocol. | | 18 | want to put that on the record. You know, he's | 18 | MR. LICHTMAN: We
have that, yes, but then | | l9 | served his time and whatever, but I support the | | 19 we also, as an example, Document 685, have a | | 20 | that he has asked the
same position that he | | 20 protective ceder that was entered with Mr. Scherer's | | 21 | Cowl, and that is to have the trustee deal with | 21 | clients. We have, as an example, Document 715 that | | 22 | | | 22 pertains to MS Capital, and on and on | | 23 | this, get these documents and deal with it with | 23 | So, in any event, what we realized is | | 24 | you, rather than allow the successor law firm to
have them. | 24 | the cue with respect to the Epstein vs. Scott | | 25 | I don't know where they had the right | | 25 Rothstein, Bradley Edwards case, is this is | (Pages 21 10 24 OUELLETTE & MAULDIN COURT REPORTERS, MC. | | Pare 23 | | Pies n | | -------- | --------------------------------------------------------------------------------------------------- | --- | ----------------------------------------------------------------------------------------------------- | | I | different. This Is not an asset either to the | 1 | MR. LICHTMAN: Qtask is not part of this | | 2 | RRA estate, nor is it really an asset to any | 2 | equation as of right now. Now, it may be, and were | | 3 | potential creditor of the RRA estate that is | 3 | still trying to got that. I'm just talking about | | 4 | investigating claims that can bring a recovery | 4 | search,
internal e-mails where we would put in | | 5 | that can help in terms of the overall dollars | 5 | give it to the Berkowitz Sun and say, run an e-mall | | 6 | into either RRA or to a particular creditor on | 6 | search on the following names. | | 7 | their individual lawsuits. | 7 | And when we realized the volume of | | 8 | The Epstein case, rather, is a lawsuit | 8 | work, and you can imagine, you know, hire from a | | 9 | between a third party that was being sued by the | 9 | ream of paper, 500 sheets of paper, and you | | | 10 Rothstein ann against Rothstein lawyers, and we | 10 | multiply that out and you get to 12 reams of that | | | 11 had a different privilege issue than we had | | 11 paper, it takes up a lot of paper, it takes up a | | 12 | focused on with all these other document | 12 | tremendous amount of time. This is not an asset | | 13 | productions. | 13 | of the estate that we can, if we have to, warrant | | 14 | So we get the 6,000 e-mails, and on the | 14 | doing the work. the hard work, as we've done on | | 15 | eve of one of my colleagues getting ready to | 15 | many of the other claims, some of which already | | 16 | enter into — either enter into one of these | 16 | are before you for settlement purposes. This is
a liability to the estate and an expensive one. | | 17 | protective orders or say, here, take them, like | 17 | So we really didn't want to go through | | 18 | we've done with everybody else, we looked up and | 18 | 19 the undertaking of having to protect the | | 19 | Mr. Stettin and I said, time out. We have a | | | | 20 | legitimate privilege issue here. | | 20 privilege, though we would, and candidly,
21 Epstein's counsel has said well pay you to do | | 21 | And I want to be clear, we don't want | | 22 it, but then there's also the manpower issue | | 22 | to come anywhere close to stepping in the mess of | 23 | because we are pressed very hard to get certain | | 23 | waiving attorney/cheat privilege, unless and | 24 | adversaries moving as quickly as we can and were | | 24 | until the Court tells us to, and I want to also | 25 | fighting a lot of battles on a lot of different | | 25 | be clear, we wish we weren't hen. We would | | | | | Pate 26 | | Paten | | | | | | | | | I | | | I | prefer not to have a fight on any of this stuff | 2 | grounds, we still really don't want to do that,
and also because we don't know the Epstein case | | 2 | and on one hand, we don't ewe who does the | 3 | well enough to be able to assess what is | | 3 | privilege log and who gets the documents, and on | 4 | privileged, what Is not, and preparing a | | 4 | the other hand, because of some things that | 5 | privilege log the proper way is really a time | | 5 | Mr. Scherer just commented on, that I learned | 6 | consuming mess. | | 6 | literally today, and because of the common | 7 | So I teed it up for both sides and | | 7 | interest agreement that everybody knows wo have | 8 | said, here's what I'm willing to do. Putting | | 8 | with Mr. Scherer and the committee, in some | 9 | aside the issue as to really whether or not the | | 9 | respects, 1 don't think it prudent for me to | | 10 Court does have jurisdiction on a State Court | | 10 | discuss why I would want to look at some of those | | 11 subpoena, which ultimately I leave to you, we | | | 11 documents. | | 12 said, we're still willing to enter into a | | 12 | But be that as it may, we found that | 13 | modified version of the protective order that we | | 13 | there were 6,000 e-mails and this was the one | 14 | gave to you, which effectively provides the | | 14 | time that rather than go through the usual | 15 | additional language of no claims can be brought | | 15
16 | protocol of preparing the stipulated protective
order that is effectively a mirror imago of that | | 16 against Mr. Stettin or the estate if we produce | | 17 | | 17 | these documents. | | 18 | which is provided by Federal Rule of Evidence
privilege
502, we sold there is a need for | 18 | We don't really have a bone to pick in | | | | | 19 this mess, we just want to make sure that we | | 20 | 19 log hem
There are 6,000 e-malls, give or take, | | 20 follow all of the ethical boundaries required by | | | | | 21 Florida law, by rules of professional conduct | | | 21 and we quickly assessed that the time to review
22 6,000 e-mails, this could not be done by a | | 22 We don't wish to necessarily waive somebody | | 23 | | | 23 else's privilege. We don't think that's | | 24 | paralegal, it would have to be done by a lawyer.
THE COURT: Does this include Qtask or is | 25 | 24 necessarily prudent, but we really don't want to
have a fight in this battle, and we wanted the | (Pagcs 25 to 28) ### OUELLETTE & MAULDIN COURT REPORTERS, INC. ' Case 9:08-cv-80893-KAM Document 214-3 Entered on FLSD Docket 09/02/2010 Page 8 of | | Pisa 29 | | Pitt 31 | | -------- | ------------------------------------------------------------------------- | --- | ------------------------------------------------------------------------------------------------------ | | I | Court to approve — whatever it is you want us to | 1 | they had been counsel for LM and others in | | 2 | do, to tell you the truth, we're happy to do. We | 2 | litigation respecting Epstein, and that we | | 3 | just want to make sure that Mr. Stettin is | 3 | assumed that they would have been files they | | 4 | personally insulated and that the estate is | 4 | would wait and B, because at the time that this | | 5 | insulated In whatever it Is — | 5 | matter on the subpoena came before the State | | 6 | THE COURT: Alit see is — | 6 | Court judge, we stood outside the courtroom and | | | MR. LICHTMAN: — you direct. | 7 | here's what happened. I was effectively going to | | 7 | THE COURT: -- the potential of a claim | 8 | tell the State Court judge basically the same | | S | | 9 | story I've told you in complete detail and say, | | 9 | against Stettin and the estate for breach of the | 10 | we don't really care. We just want to make sure | | 10 | anomey/client privilege. | II | Mr. Stettin Is protected and the estate is | | 11 | MR. LICHTMAN: correct. | 12 | protected. | | 12 | THE COURT: So the basis — | 13 | And we had reached an agreement that | | 13 | MR. LICHTMAN: And hence the dilemma. | 14 | day, which was we were going to turn over the | | 14 | THE COURT: — for the claim Is there. | | 15 boxes to Mr. Fantasia firm and we were going to | | 15 | MR. LICHTMAN: Yeah, right, hence the | | | | 16 | dilemma. | | 16 give e-malls to them, and they were going to do | | 17 | Now wo come to the ;Snit of hard | 17 | the privilege log because that would save us a | | 18 | documents because the e-mails are one thing, and | | 18 ton of time, important time, and as important, a | | 19 | 1 had a number of conversations candidly with | 19 | lot of money to the estate, and we did not wish
20 to burden the creditors of the estate with legal | | 20 | Ms. Sanchez, where I think that we had told her | | | | 21 | originally we had heard there were, as an | 21 | fees for putting together the privilege log, so | | 22 | example, sonic loan files or transaction files | 22 | it was agreed that we would do that. | | 23 | related to Ponzl deals related to Mr. Epstein, | 23 | I, personally, reiterated the terms to | | 24 | because I remember myself even hearing that going | 24 | all the lawyers that were standing outside the | | 25 | back many, many, many months ago. | 25 | courtroom, as to what was to be reflected in a | | | Pit 10 | | Pago32 | | | | | written order because I didn't want to leave it | | 1 | Suffice it to say, that I have | I | | | 2 | conducted a very thorough discussion, without | 2 | to thane as to what was agreed on. | | | | | | | 3 | waiving our internal privileges or work product, | 3 | Suffice it to say, when the lawyers for | | 4 | and we can't fund those, and it appears as if | 4 | Mr. Epstein and the lawyers for Mr. Edwards went | | | they really did not exist, that what had occurred | 5 | back to try to reduce to writing that which was | | 6 | is that somehow Epstein was lined on a shat for | 6 | in part agreed upon outside the courtroom, they | | 7 | a potential deal that never closed. | 1 | were unable to do so, and that teed up the filing | | 8 | In terms of the ten boxes of documents, | 8 | of the motion before you to compel us to produce | | 9 | one of the functions the trustee served early on | 9 | the c-mails and the documents. | | 10 | in the case was to facilitate transfers of | 10 | I wish to reiterate, I think that | | 11 | files — | I I | Mr. Scherer has shared something with me that we | | 12 | THE COURT: 1 remember that. | 12 | need to investigate and will, and! was unaware | | I3 | MR. L1CHTMAN: — from two attorneys that | 13 | of that literally until I rode up the elevator | | 14 | | 14 | with him this morning. And I don't wish to spend | | | were handling cases. All right. I had a general | | 15 more time on h than that right now, but I take | | 15
16 | understanding that most of the files wen picked up | 16 | him at his word because an awful lot of what I've | | | by the Farmer fin because they were continuing on | | 17 seen him work on so far has borne fruit. | | 17 | with that litigation, and that would have made some | 18 | I don't care what you want us to do. | | 18 | sense, but then wo had also heard that there were | | 19 All I want to know is that at the end I can walk | | 19 | some boxes that were left behind. | | 20 out of court with an order that protects the | | 20 | I believe there are two boxes, I'm not | 21 | | | 21 | positive of that, two boxes I think that we may | | estate and protects Mr. Stettin. So I have told | | 22 | still have, and I'm pretty sure we've sent | 23 | 22 you the story and leave it to you to fashion what | | 23 | a-mails a couple of times to the Farmer firm | | remedy you think appropriate.
If 1 can answer any questions, I'm | | 24
25 | saying, come get your documents.
Now, why would we do that? A, because | 25 | happy to. | (Pages 29 to 32 ### OUELLETTE & stnr n nnr cyst rR r REPORTERS, INC. EFTA00235308 Case 9:08-cv-80893-KAM Document 214-3 Entered on FLSD Docket 09/02/2010 Page 9 of | I
2 | | | | | -------- | ------------------------------------------------------------------------------------------------------ | ------ | ------------------------------------------------------------------------------------------------ | | | Pest 33 | | Page 35 | | | THE COURT: Well, the trustee knows what | | MR. FARMER: Yes, your Honor. Just very | | | the trustee has, obviously. | 2 | briefly. I thank you for the opportunity to address | | 3 | MR. L1CHTMAN: Yes. | 3 | the Court again. !just wanted to clear something | | 4 | THE COURT: So the trustee is capable of | 4 | up, your Honor. Understand that when this all | | 5 | preparing a log of what he has. | 5 | happened, there were six of us now who are partners, | | 6 | MR. L1CHTMAN: Meaning we have the | 6 | who had dozens and dozens of ongoing cases. | | 7 | following data. | 7 | l'HE COURT: I remember we held hearings and | | 8 | THE COURT: Yes. | 8 | I authorized the trustee — | | 9 | MR. L1CHTMAN: Yes, we can do that. | 9 | MR. FARMER: And you authorized, yes. | | 10 | THE COURT: Then the parties can then argue | 10 | THE COURT: — to deliver the information | | 11 | whether or not that is subject to privilege. The | | 11 so the lawyers could continue to represent the | | | | 12 | clients. | | 12 | plaintiff can still get from Mr. Farmer and his
clients in the State Court discovery. The discovery | 13 | MR. FARMER: RPM seemed to be maybe | | 13 | | 14 | suggested hero today that something untoward occulted | | 14 | being sought here Is from the trustee
MR. L1CHTMAN: Correct. | 15 | as far as the removal of these boxes. These were | | 15 | and would be subject to the | 16 | litigation files, pleadings, investigative reports, | | 16 | THE COURT: | 17 | all of these things. | | 17 | trustee's responsibility for the privilege log | 18 | So we needed to get on with those | | 18 | because of his potential liability. | | 19 cases, but I think you've heard now from the | | 19 | MR. LICHTMAN: Yes, and 1 think you | | 20 trustee that this is not an asset and it is an | | | 20 understand, though, why if we can somehow deflect | 21 | expense. I still think that we arc the party who | | 21 | that responsibility, because of the extreme amount of | | 22 should prepare this privilege log. We arc most | | 22 | cost and time to do that, we would be happy to do | 23 | familiar — | | 23 | that because, you know, otherwise, we submit fee | 24 | THE COURT: Well, no, if I appoint a | | 24 | petitions that show a tremendous amount of time on | 25 | special master, you will have an input into that | | 25 | something that doesn't produce an asset to the | | | | | Pete 34 | | ►ate 36 | | | | I | special master and you'll have an opportunity to be | | I | estate, just a liability.
THE COURT: Right. This is not an asset of | 2 | heard before me before I authorize the release of the | | 2 | | 3 | information, because ultimately the order that's | | 3 | the estate. | 4 | going to authorize the release of the information is | | 4 | MR. L1CHTMAN: No, its just a liability. | 5 | going to provide protection to the trustee and the | | 5 | THE COURT: But could be a substantial | | estate. | | 6 | liability. | 6
7 | l jug
MR. FARMER: And, thank you, Judge, | | 7 | MR. LICHTMAN: Hence the dilemma. | | wanted to make sure, and I was going to request, that | | 8 | THE COURT: Welt, I can appoint a special | 8 | we have an opportunity to review whatever the master | | 9 | master to do it at the expense of the movant and not | 9 | does and if we think they've missal a privilege or | | 10 | release the information until the special master | 10 | | | | 11 reports back to me and I authorize the release. | I I | are wrong in an assertion, that we have an | | 12 | What I propose to do by my authorizing | 12 | opportunity to address that. | | 13 | the release — I'm sorry, Stettin, as atatet, to | 13 | THE COURT: There is going to be a hearing | | 14 | release the information, I would, therefore, be | 14 | before the information gets released. | | 15 | protecting the estate from any claim for the | IS | MR. FARMER: Understood. Thank you, your | | | release of that information. | 16 | Honor. | | 16 | MR. LICHTM.AN: We would be happy to do | 17 | THE COURT: All right. Mr. Lichtrnan — | | 17 | that, your Honor, and I note, 1 don't wish to speak | 18 | MR. L1CHTMAN: Yes. | | 18 | | 19 | THE COURT: — I want you to prepare the | | | | | | | 19 | for the Epstein lawyers, they actually offered to pay | 20 | order. I'm going to continue the hearing on the two | | 20 | time for us doing that, and 1 said, well, you know, | 21 | motions, Docket Entry 807 and 819, and I'm going to | | | 21 that's pert of the equation, the other part is — | 22 | have you draft an order appointing a special master, | | 22 | THE COURT: No, no, no, I can appoint a | 23 | the expense of which will be borne by the Epstein | | 23
24 | special master.
MR. LICHTM.AN: Yes. | 24 | movants. The special master will meet with both
sides, Epstein and Edwards, and then with the | **(Pages 33 to 36** EFTA00235309 **OUELLETIE & MAULDIN COURT REPORTERS, INC.** Case 9:08-cv-80893-KAM Document 214-3 Entered on FLSD Docket 09102/2010 Page 10 of Pin 37 No 39 J trustee, and will prepare a privilege log, the 1 release of which will be noticed for hearing in front 2 of me. 3 CERTIFICATION MR. LICHTMAN: Do I pick the special master 4 or do you? 5 STATE OF FLORIDA.. THE COURT: You can -- if you all can —1 7 COUNTY OF DADE: hate to use the word agree, but if you all can agree, 8 tryMag t Franzaa, Shorthand Reporter that's fine. If you can% agree, give no three names 9 and Nota Public in and for the State of Florida to choose from. 10 at cargo, hereby certify that the foregoing MR. LICHTMAN: Okay. 11 proceedings were taken before me at the date and THE COURT: You're going to have to check 12 place as stated in the caption hereto on Pagel; with this, quote, "special truster" to make sure they 13 that the foregoing computer-aided transcription is have the time to review the privilege log. 14 a tort record of my stenographic notes taken at said MR. LICHTMAN: The documents. I5 proceedings. THE COURT: And it has to be somebody that 16 WITNESS my hand this 5th day of doesn't have a conflict of interest. 17 August, 2010. IS MR. LICHTMAN: Right Okay. THE COURT: All right. Run the order by Mr. Neiwirth and Mr. Fanner. Margaret Franzen MR. LICHTMAN: Thank you. 21 Court Reporter and Notary Public MR. FARMER: Thank you, your Honor. In and for the State of Florida at Lap MR. NEIWIRTH: Your Honor, may it please 22 My Commission Expires: April 14,2014 the Court? 23 THE COURT: Yes. 24 MR. NE1W1RTH: Can we say something about 25 Pne 18 the time frame because as we sit here right now we still have a trial coming in October. THE COURT: Well, 1 understand that, but 1 probably have between five and 6,000 active cases right now and within the Rothstein case, I don't even know how many adversaries and contested matters are pending. III get to it as soon as 1 can. But you can proceed to obtain the information from Edwards and LM in the State Court proceeding. AU I'm governing Is what the II trustee Is going to release from the debtor estate. All right. Mr. LIchtman, see to the order. la. EDWARDS: Thank you, your Honor. NM. FARMER: Thank you for your time, your Honor. MR. NEIWIRTH: Thank you, Judge. (Thereupon, the hearing was concluded.) (Pages 37 lo 39) OUELLETTE & MAULDIN COURT REPORTERS, LNC. EFTA00235310