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In re MF Global Holdings Ltd.

United States District Court, S.D. New York

March 24, 2014

In re MF GLOBAL HOLDINGS LTD., et al., Debtor.
v.
JON S. CORZINE, et al., Defendants NADER TAVAKOLI, AS LITIGATION TRUSTEE OF THE MF GLOBAL LITIGATION TRUST, Plaintiff, -

For Virginia Retirement System, Her Majesty the Queen in Right of Alberta, Lead Plaintiffs: Christopher J. Keller, LEAD ATTORNEY, Labaton Sucharow, LLP, New York, NY; Cynthia A Hanawalt, Iona Maria May Evans, Labaton & Sucharow LLP (NYC), New York, NY; Dominic J. Auld, Labaton Sucharow, New York, NY; Gerald H. Silk, Hannah Elizabeth Ross, Jai Kamal Chandrasekhar, Salvatore Jo Graziano, Bernstein Litowitz Berger & Grossmann LLP, New York, NY; Javier Bleichmar, Stephen William Tountas, Labaton Sucharow LLP (NYC), New York, NY; Stefanie Jill Sundel, Bernstein, Litowitz, Berger & Grossman, New York, NY.

For Joseph Deangelis, Individually and on behalf of all others similarly situated, Plaintiff: Brian C. Kerr, Brower Piven, A Professional Corporation, New York, NY; David A.P. Brower, Brower Piven, New York, NY; Jason Mathew Leviton, Scott A Mays, PRO HAC VICE, Berman DeValerio (MA), Boston, MA; Jeffrey Craig Block, Whitney Erin Street, Block & Leviton LLP, New York, NY.

City of Philadelphia Board of Pensions and Retirement and Palisade Strategic Master Fund (Cayman) Limited, Plaintiff, Pro se.

For Jerome Vrabel, Plaintiff: Amanda Marjorie Steiner, Girard Gibbs LLP, San Francisco, CA; Christina H. C. Sharp, Daniel Charles Girard, PRO HAC VICE, Girard Gibbs LLP, San Francisco, CA; Salvatore Jo Graziano, Bernstein Litowitz Berger & Grossmann LLP, New York, NY.

For Bearing Fund LP, Plaintiff: Merrill G Davidoff, Berger & Montague, P.C, Philadelphia, PA.

For Nader Tavakoli, As Litigation Trustee Of The MF Global Litigation Trust, Plaintiff: Christopher J. Lovrien, LEAD ATTORNEY, PRO HAC VICE, Jones Day, Los Angeles, CA; Michael S. McCauley, Peter E. Davids, PRO HAC VICE, Jones Day, Los Angeles, CA.

For Waterstone MF Fund, Ltd., AQR Funds-AQR Diversified Arbitrage Fund, AG Ofcon, Ltd., Prime Captial Master SPC-GOT WAT MAC Segregated Portfolio, Vermont Mutual Insurance Company, Lord Abbett Investment Trust - Lord Abbett Convertible Fund, AQR UCITS Funds, CNH Diversified Opportunities Master Account, L.P., AQR Delta Master Account, L.P., American Physicians Assurance Company, Lazard Asset Management LLC, on behalf of certain of its managed accounts, Suttonbrook Eureka Fund, LP, CSAA Insurance Group, Waterstone Market Neutral Fund, The Doctors Company Insurance Group, AG Oncon, LLC, Waterstone Offshore ER Fund, Ltd., Suttonbrook Captial Portfolio LP, CNH CA Master Account, L.P., AQR Opportunistic Premium Offshore Fund L.P., Pension, Hospitalization and Benefit Plan of the Electrical Industry - Pension Trust Account, HFR CA Lazard Rathmore Master Trust, Lazard Rathmore Master Fund, L.P., AQR Absolute Return Master Account, L.P., AQR Delta Sapphire Fund, L.P., Plaintiff: Jeff I Ross, PRO HAC VICE, Ross & Orenstein LLC, Minneapolis, MN; John B. Orenstein, Ross & Orenstein LLC, Minneapolis, MN.

For Monica Rodriguez, individually and on behalf of all others similarly situated, Consolidated Plaintiff: Amanda Marjorie Steiner, Girard Gibbs LLP, San Francisco, CA; Christina H. C. Sharp, Daniel Charles Girard, PRO HAC VICE, Girard Gibbs LLP, San Francisco, CA; Edward H. Glenn, Jr., Zamansky & Associates, L.L.C., New York, NY; Jacob H. Zamansky, Zamansky & Associates LLC, New York, NY; Salvatore Jo Graziano, Bernstein Litowitz Berger & Grossmann LLP, New York, NY.

For Cyrille Guillaume, individually and on behalf of all others similarly situated, Consolidated Plaintiff: Amanda Marjorie Steiner, Girard Gibbs LLP, San Francisco, CA; Daniel Charles Girard, PRO HAC VICE, Girard Gibbs LLP, San Francisco, CA; Edward H. Glenn, Jr., Zamansky & Associates, L.L.C., New York, NY; Jacob H. Zamansky, Zamansky & Associates LLC, New York, NY.

For Davide Accomazzo, Consolidated Plaintiff: Christopher J. Gray, Law Office of Christopher J. Gray, P.C, New York, NY; Stephen David Oestreich, Entwistle & Cappucci LLP (NYC), New York, NY.

For Sapere CTA Fund, LP, Consolidated Plaintiff: John J. Witmeyer, III, Ford, Marrin, Esposito, Witmeyer & Gleser, L.L.P., New York, NY; Jon Ryan Grabowski, Ford Marrin Esposito Witmeyer & Gleser, LLP, New York, NY.

For Summit Trust Company, on behalf of itself and all others similarly situated, Consolidated Plaintiff: Andrei V. Rado, Milberg LLP (NYC), New York, NY; Carla F. Fredericks, Milberg LLP (NYC), New York, NY; Charles Michael Plavi, PRO HAC VICE, Finkelstein & Krinsk, LLP, San Diego, CA; Jeffrey R. Krinsk, PRO HAC VICE, Finkelstein & Krinsk, LLP, San Diego, CA; Mark Leland Knutson, PRO HAC VICE, Finkelstein and Krinsk, San Diego, CA; Merrill G Davidoff, Berger & Montague, P.C, Philadelphia, PA.

For Kay P. Tee, LLC, Consolidated Plaintiff: Daniel John Walker, Berger & Montague, P.C., Philadelphia, PA; Francis P. Karam, Francis P. Karam, Esq. PC, New York, NY; Merrill G Davidoff, Berger & Montague, P.C, Philadelphia, PA; Michael Dell'Angelo, PRO HAC VICE, Berger & Montague, P.C., Philadelphia, PA; Roger Joel Bernstein, Roger J. Bernstein, Attorney at Law, New York, NY.

For Thomas G. Moran, John Andrew Szokolay, Donald Tran, Consolidated Plaintiffs: Daniel John Walker, Berger & Montague, P.C., Philadelphia, PA; Merrill G Davidoff, Berger & Montague, P.C, Philadelphia, PA; Michael Dell'Angelo, PRO HAC VICE, Berger & Montague, P.C., Philadelphia, PA; Roger Joel Bernstein, Roger J. Bernstein, Attorney at Law, New York, NY.

For Gregory Bartell, Daniel M Pierce, Consolidated Plaintiffs: Clinton A. Krislov, PRO HAC VICE, Krislov & Associates, Ltd., Chicago, IL.

For Henning-Carey Proprietary Trading, L.L.C, Charles Carey, Joseph Niciforo, Robert Tierney, Brian Fisher, Shane McMahon, Michael Mette, Timothy Zaug, Consolidated Plaintiffs: Brittany E. Kirk, Nisen & Elliott LLC, Chicago, IL; Claire E. Gorman, Nisen & Elliott, Chicago, IL; Michael H. Moirano, PRO HAC VICE, Nisen & Elliott, LLC, Chicago, IL.

For PS Energy Group Inc, Mark Kennedy, Thomas S. Wacker, Robert Marcin, Consolidated Plaintiffs: Merrill G Davidoff, Berger & Montague, P.C, Philadelphia, PA.

For U.S. Commodity Futures Trading Commission, Consolidated Plaintiff: Chad Eric Silverman, CFTC, New York, NY; Douglas Kent Yatter, Commodity Futures Trading Commission(NYC), New York, NY; Kenneth Brent Tomer, U.S. Commodity Futures Trading Commission(NYC), New York, NY; Sheila Louise Marhamati, U.S. Commodity Futures Trading Commission(NYC), New York, NY; Steven Ira Ringer, Commodity Futures Trading Commission(NYC), New York, NY.

For The Bagwell Group, Movant: Jeremy Alan Lieberman, Pomerantz Haudek Block Grossman & Gross LLP, New York, NY.

For Banyan Capital Master Fund, Ltd., Movant: Curtis Victor Trinko, Law Offices of Curtis V. Trinko, LLP, New York, NY.

For Building Trades United Pension Trust Fund, Union Asset Management Holding AG, Movants: Danielle Suzanne Myers, Robbins Geller Rudman & Dowd LLP, San Diego, CA; Darren J. Robbins, PRO HAC VICE, Robbins Geller Rudman & Dowd LLP (SANDIEGO), San Diego, CA; Samuel Howard Rudman, Robbins Geller Rudman & Dowd LLP(LI), Melville, NY.

For LRI Invest S.A., Movant: Ann Kimmel Ritter, PRO HAC VICE, Motley Rice LLC (SC), Mount Pleasant, SC; Danielle Suzanne Myers, Robbins Geller Rudman & Dowd LLP, San Diego, CA; Darren J. Robbins, PRO HAC VICE, Robbins Geller Rudman & Dowd LLP (SANDIEGO), San Diego, CA; Salvatore Jo Graziano, Bernstein Litowitz Berger & Grossmann LLP, New York, NY; Samuel Howard Rudman, Robbins Geller Rudman & Dowd LLP(LI), Melville, NY.

For Paradigm Global Fund I Ltd., Paradigm Equities Ltd., Paradigm Asia Ltd., Movants: Andrew J Entwistle, Entwistle & Cappucci LLP (NYC), New York, NY; Joshua Killion Porter, Entwistle & Cappucci LLP (NYC), New York, NY; Marc M. Seltzer, PRO HAC VICE, Susman Godfrey, L.L.P., Los Angeles, CA; Merrill G Davidoff, Berger & Montague, P.C, Philadelphia, PA.

For Zybr Holdings, LLC, Movant: Andrew J Entwistle, Entwistle & Cappucci LLP (NYC), New York, NY; Joshua Killion Porter, Entwistle & Cappucci LLP (NYC), New York, NY; Marc M. Seltzer, PRO HAC VICE, Susman Godfrey, L.L.P., Los Angeles, CA.

For Augustus International Master Fund, L.P., Movant: Andrew J Entwistle, Entwistle & Cappucci LLP (NYC), New York, NY; Joshua Killion Porter, Entwistle & Cappucci LLP (NYC), New York, NY; Merrill G Davidoff, Berger & Montague, P.C, Philadelphia, PA.

For William Schur, Movant: Andrew J Entwistle, Entwistle & Cappucci LLP (NYC), New York, NY; Joshua Killion Porter, Entwistle & Cappucci LLP (NYC), New York, NY; Marc M. Seltzer, PRO HAC VICE, Susman Godfrey, L.L.P., Los Angeles, CA.

For H. Martin Klinker, Jr., Rocking K Land and Cattle, Inc., Philip Timothy Johnson, Wade Jacobsen, Movants: Imtiaz A. Siddiqui, LEAD ATTORNEY, Cotchett, Pitre & McCarthy LLP, New York, NY.

Futures Capital Management, LLC, Movant, Pro se.

Ali A. Rangchi Bozorki, Movant, Pro se.

For Bradley I. Abelow, Defendant: Arthur Harlod Aufses, III, Kramer Levin Naftalis & Frankel, LLP, New York, NY; Craig Louis Siegel, Kramer Levin Naftalis & Frankel, LLP, New York, NY; Paul Henry Schoeman, Kramer Levin Naftalis & Frankel, LLP, New York, NY.

For Michael G. Stockman, Defendant: Ethan Yu Lee, Milbank, Tweed, Hadley & McCloy LLP (NYC), New York, NY; James N. Benedict, Milbank, Tweed, Hadley & McCloy LLP, Los Angeles, CA; Justin Anthony Alfano, Milbank, Tweed, Hadley & McCloy LLP (NYC), New York, NY; Sean Miles Murphy, Milbank, Tweed, Hadley & McCloy LLP (NYC), New York, NY; Thomas A. Arena, Milbank, Tweed, Hadley & McCloy LLP, Los Angeles, CA.

For Sandler O'Neill & Partners, L.P., Defendant: Stuart Jay Baskin, LEAD ATTORNEY, Shearman & Sterling LLP (NY), New York, NY; Adam Selim Hakki, Shearman & Sterling LLP (NY), New York, NY; H. Miriam Farber, Shearman & Sterling LLP (NY), New York, NY.

For U.S. Bancorp Investments, Inc., Defendant: Stuart Jay Baskin, LEAD ATTORNEY, Shearman & Sterling LLP (NY), New York, NY; Adam Selim Hakki, Shearman & Sterling LLP (NY), New York, NY; H. Miriam Farber, Shearman & Sterling LLP (NY), New York, NY.

For PricewaterhouseCoopers LLP, Defendant: James J. Capra, Jr, LEAD ATTORNEY, King & Spalding LLP (NYC), New York, NY; David M. Fine, King & Spalding LLP (NYC), New York, NY; James P. Cusick, King & Spalding LLP (NYC), New York, NY; Michael Pauze, King & Spalding LLP, Washington, DC.

For David Dunne, Defendant: Laura Steinberg, LEAD ATTORNEY, Sullivan & Worcester LLP (MA), Boston, MA.

For Matthew Hughey, Defendant: David A Geier, LEAD ATTORNEY, PRO HAC VICE, Geier Homar & Roy, LLP, Madison, WI.

For J. Randy Macdonald, Consolidated Defendant: Dean Lindsay Chapman, Akin Gump Strauss Hauer & Feld (1 Battery Pk.), New York, NY; Estela Diaz, Akin Gump Strauss Hauer & Feld LLP (NYC), New York, NY; Joseph Lee Sorkin, Akin Gump Strauss Hauer & Feld LLP (NYC), New York, NY; Robert Henry Hotz, Jr, Akin Gump Strauss Hauer & Feld (1 Battery Pk.), New York, NY.

For David P. Bolger, Consolidated Defendant: Edmund Polubinski, III, LEAD ATTORNEY, Davis Polk & Wardwell L.L.P., New York, NY; David Brendan Toscano, Davis Polk & Wardwell L.L.P., New York, NY; Julia Nestor, Davis Polk & Wardwell L.L.P., New York, NY.

For Alison J. Carnwath, Consolidated Defendant: David A. Barrett, LEAD ATTORNEY, Boies, Schiller & Flexner, LLP(NYC), New York, NY; Marilyn C. Kunstler, Boies, Schiller & Flexner, LLP(NYC), New York, NY.

For Eileen S. Fusco, David Gelber, Martin J. Glynn, Edward L. Goldberg, David I. Schamis, Robert S. Sloan, Consolidated Defendants: Edmund Polubinski, III, LEAD ATTORNEY, Davis Polk & Wardwell L.L.P., New York, NY; David Brendan Toscano, Davis Polk & Wardwell L.L.P., New York, NY.

For Henri J. Steenkamp, Consolidated Defendant: Neil Stephen Binder, Binder & Schwartz LLP, New York, NY.

For Michael G. Stockman, Consolidated Defendant: Ethan Yu Lee, Milbank, Tweed, Hadley & McCloy LLP (NYC), New York, NY.

For Jon S. Corzine, Consolidated Defendant: Andrew J. Levander, LEAD ATTORNEY, Dechert, LLP (NYC), New York, NY; Jonathan R. Streeter, U.S. Attorney's Office, SDNY (St Andw's), New York, NY; Matthew Lester Mazur, Dechert, LLP (NYC), New York, NY; Rebecca Sarah Kahan, Dechert, LLP (NYC), New York, NY; Schuyler G. Carroll, Perkins Coie LLP, New York, NY; Shan A. Haider, Perkins Coie LLP, New York, NY.

For Bernard Dan, Consolidated Defendant: David Michael Rosenfield, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY; Lisamarie Frances Collins, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY; Therese Marie Doherty, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY.

For Goldman Sachs & Co., Consolidated Defendant: Christopher Michael Joralemon, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Mark Adam Kirsch, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Goutam Umesh Jois, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Ladan Fazlollahi Stewart, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Lisa Heather Rubin, Gibson, Dunn & Crutcher, LLP (NY), New York, NY.

For Citigroup Global Markets Inc., Consolidated Defendant: Christopher Michael Joralemon, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Mark Adam Kirsch, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Goutam Umesh Jois, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Ladan Fazlollahi Stewart, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Lisa Heather Rubin, Gibson, Dunn & Crutcher, LLP (NY), New York, NY.

For Bank Of America Corporation, Consolidated Defendant: Christopher Michael Joralemon, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Mark Adam Kirsch, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Ladan Fazlollahi Stewart, Gibson, Dunn & Crutcher, LLP (NY), New York, NY.

For Merril Lynch, Pierce, Fenner & Smith Incorporated, Consolidated Defendant: Christopher Michael Joralemon, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Mark Adam Kirsch, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Goutam Umesh Jois, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Ladan Fazlollahi Stewart, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Lisa Heather Rubin, Gibson, Dunn & Crutcher, LLP (NY), New York, NY.

For J.P. Morgan Securities Inc., Consolidated Defendant: Christopher Michael Joralemon, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Mark Adam Kirsch, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Goutam Umesh Jois, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Ladan Fazlollahi Stewart, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Lisa Heather Rubin, Gibson, Dunn & Crutcher, LLP (NY), New York, NY.

For Deutsche Bank Securities Inc., Consolidated Defendant: Christopher Michael Joralemon, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Mark Adam Kirsch, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Goutam Umesh Jois, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Ladan Fazlollahi Stewart, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Lisa Heather Rubin, Gibson, Dunn & Crutcher, LLP (NY), New York, NY.

For RBS Securities Inc., Consolidated Defendant: Christopher Michael Joralemon, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Mark Adam Kirsch, LEAD ATTORNEY, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Goutam Umesh Jois, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Ladan Fazlollahi Stewart, Gibson, Dunn & Crutcher, LLP (NY), New York, NY; Lisa Heather Rubin, Gibson, Dunn & Crutcher, LLP (NY), New York, NY.

For Jefferies & Company, Inc., Consolidated Defendant: Stuart Jay Baskin, LEAD ATTORNEY, Shearman & Sterling LLP (NY), New York, NY; Adam Selim Hakki, Shearman & Sterling LLP (NY), New York, NY; H. Miriam Farber, Shearman & Sterling LLP (NY), New York, NY.

For BMO Capital Markets Corp., Consolidated Defendant: Adam Selim Hakki, LEAD ATTORNEY, Shearman & Sterling LLP (NY), New York, NY; H. Miriam Farber, Shearman & Sterling LLP (NY), New York, NY; Stuart Jay Baskin, Shearman & Sterling LLP (NY), New York, NY.

For Commerz Markets LLC, Consolidated Defendant: Stuart Jay Baskin, LEAD ATTORNEY, Shearman & Sterling LLP (NY), New York, NY; Adam Selim Hakki, Shearman & Sterling LLP (NY), New York, NY; H. Miriam Farber, Shearman & Sterling LLP (NY), New York, NY.

For Natxis Securities North America, Inc., Consolidated Defendant: Stuart Jay Baskin, LEAD ATTORNEY, Shearman & Sterling LLP (NY), New York, NY; Adam Selim Hakki, Shearman & Sterling LLP (NY), New York, NY; H. Miriam Farber, Shearman & Sterling LLP (NY), New York, NY.

For Lebenthal & Co., LLC, Consolidated Defendant: Stuart Jay Baskin, LEAD ATTORNEY, Shearman & Sterling LLP (NY), New York, NY; Adam Selim Hakki, Shearman & Sterling LLP (NY), New York, NY; H. Miriam Farber, Shearman & Sterling LLP (NY), New York, NY.

For Robert S Sloan, Consolidated Defendant: David Brendan Toscano, Davis Polk & Wardwell L.L.P., New York, NY; Edmund Polubinski, III, Davis Polk & Wardwell L.L.P., New York, NY; Julia Nestor, Davis Polk & Wardwell L.L.P., New York, NY.

For Richard W. Gill, Consolidated Defendant: G. Robert Gage, Jr., LEAD ATTORNEY, Gage, Spencer & Fleming, LLP, New York, NY.

For Laurie R. Ferber, Consolidated Defendant: Daniel E. Reynolds, LEAD ATTORNEY, Lankler Siffert & Wohl LLP, New York, NY; Frank H. Wohl, LEAD ATTORNEY, Lankler Siffert & Wohl LLP, New York, NY; Michael Dayton Longyear, LEAD ATTORNEY, Lankler Siffert & Wohl LLP, New York, NY.

For John Ranald MacDonald, Consolidated Defendant: Dean Lindsay Chapman, Akin Gump Strauss Hauer & Feld (1 Battery Pk.), New York, NY; Estela Diaz, Akin Gump Strauss Hauer & Feld LLP (NYC), New York, NY; Joseph Lee Sorkin, Akin Gump Strauss Hauer & Feld LLP (NYC), New York, NY; Robert Henry Hotz, Jr, Akin Gump Strauss Hauer & Feld (1 Battery Pk.), New York, NY.

For Tracey A. Lowery Whille, Consolidated Defendant: G. Robert Gage, Jr., LEAD ATTORNEY, Gage, Spencer & Fleming, LLP, New York, NY.

For Christine A. Serwinski, Consolidated Defendant: Brett Gerald Canna, Robinson McDonald & Canna LLP, New York, NY; Jayne S. Robinson, Robinson McDonald & Canna, LLP, New York, NY; Kathryn Ann McDonald, Robinson McDonald & Canna, LLP, New York, NY.

For Dennis A. Klejna, Consolidated Defendant: Helen Byung-Son Kim, Thompson Corburn LLP, Los Angeles, CA; Natalie Ikhlassi, PRO HAC VICE, Thompson Coburn LLP, Los Angeles, CA.

For Frederick R. Demler, Consolidated Defendant: David Michael Rosenfield, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY; Lisamarie Frances Collins, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY; Therese Marie Doherty, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY.

For Stephen Grady, Consolidated Defendant: David Michael Rosenfield, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY; Lisamarie Frances Collins, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY; Therese Marie Doherty, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY.

For Rick D. Leesley, Consolidated Defendant: David Michael Rosenfield, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY; Lisamarie Frances Collins, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY; Therese Marie Doherty, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY.

For David Simons, Consolidated Defendant: G. Robert Gage, Jr., LEAD ATTORNEY, Gage, Spencer & Fleming, LLP, New York, NY.

For J.C. Flowers & Co. LLC, Consolidated Defendant: David Norwich Gopstein, Debevoise & Plimpton LLP(919 Third Ave), New York, NY; Helen Virginia Cantwell, Debevoise & Plimpton, LLP (NYC), New York, NY; Maeve L. O'Connor, Debevoise & Plimpton, LLP (NYC), New York, NY.

For Vinay Mahajan, Consolidated Defendant: Gregory John O'Connell, De Feis O'Connell & Rose, P.C., New York, NY; Philip Canning Patterson, De Feis O'Connell & Rose, P.C., New York, NY; Vera Marie Kachnowski, De Feis O'Connell & Rose, P.C., New York, NY.

For Edith O'Brien, Consolidated Defendant: Darren Bernens Kinkead, LEAD ATTORNEY, Steptoe & Johnson LLP, Chicago, IL; Christopher James Barber, PRO HAC VICE, Steptoe & Johnson LLP, Chicago, IL.

For JP Morgan Chase & Co., Consolidated Defendant: John F Savarese, LEAD ATTORNEY, Wachtell, Lipton, Rosen & Katz, New York, NY; John F. Lynch, Wachtell, Lipton, Rosen & Katz, New York, NY; Ralph M. Levene, Wachtell, Lipton, Rosen & Katz, New York, NY; Steven Peter Winter, Wachtell, Lipton, Rosen & Katz, New York, NY.

For Natixis Securities North America Inc., Consolidated Defendant: Adam Selim Hakki, Shearman & Sterling LLP (NY), New York, NY.

For MS Global Holdings Ltd., Consolidated Defendant: Daniel A. Nathan, Morrison & Foerster L.L.P. (DC), Washington, DC.

For Arkansas Public Employees Retirement System, ADR Provider: Kenneth Mark Rehns, LEAD ATTORNEY, Cohen Milstein Sellers & Toll P.L.L.C., New York, NY.

For Rogers Varner, Jr., ADR Provider: Stuart Halkett McCluer, LEAD ATTORNEY, PRO HAC VICE, McCulley Mccluer PLLC, Oxford, MS; Merrill G Davidoff, Berger & Montague, P.C, Philadelphia, PA; R. Bryant McCulley, McCulley McCluer PLLC, Birmingham, AL.

For Summit Trust Corporation, ADR Provider: Mark Leland Knutson, PRO HAC VICE, Finkelstein and Krinsk, San Diego, CA.

Paul Hamann, ADR Provider, Pro se, Lake Forest, IL.

For MF Global Holdings Ltd., as Plan Administrator, Miscellaneous: Bennett Leon Spiegel, Jones Day (LA), Los Angeles, CA; Bruce S Bennett, PRO HAC VICE, Jones Day, Los Angeles, CA; Scott Jason Greenberg, Jones Day (NYC), New York, NY.

For James W. Giddens, as Trustee for the SIPA Liquidation of MF Global Inc., Interested Party: Christopher K. Kiplok, Hughes Hubbard & Reed LLP (NY), New York, NY; James Benedict Kobak, Jr, Hughes Hubbard & Reed LLP (NY), New York, NY; Sarah Loomis Cave, Hughes Hubbard & Reed LLP (NY), New York, NY.

OPINION

Page 809

DECISION AND ORDER

Victor Marrero, United States District Judge.

Plaintiff Nader Tavakoli, as Litigation Trustee of the MF Global Litigation Trust (the " Trustee" ), filed this First Amended Complaint (the " Complaint" ) against defendants Jon S. Corzine (" Corzine" ), Henri J. Steenkamp (" Steenkamp" ), and Bradley I. Abelow (" Abelow" ) (collectively, " Defendants" ) as part of an adversary proceeding in the Bankruptcy Court for the Southern District of New York (the " Bankruptcy Court" ). (Freeh et al. v. Corzine et al., Adv. Pro. No. 13-01333-mg (Bankr. S.D.N.Y.) (" Adversary Proceeding" ), Dkt. No. 22.) Defendants moved to dismiss. (Adversary Proceeding, Dkt. No. 27.) By Order dated January 14, 2014, the Court withdrew its reference of this matter to the Bankruptcy Court and ordered that the action be transferred to this Court. (Adversary Proceeding, Dkt. No. 35.) The Court then ordered that the action be consolidated under this docket. (Dkt. No. 643.)

The Trustee alleges that Defendants, who were directors and officers of MF Global Holdings Ltd. (" MF Global" ), breached their fiduciary duties of care and loyalty to the company. (Complaint ¶ ¶ 175-187.) The Complaint treads on familiar ground: the Court has exhaustively examined the factual circumstances surrounding, and legal fallout from, MF Global's monumental collapse in October of 2011. See In re MF Global Holdings Ltd. Inv. Litig. (MF Global II), F.Supp.2d, No. 11 Civ. 7866, 2014 WL 667481 (S.D.N.Y. Feb. 11, 2014) (the " Commodities Customer Action" ); Deangelis v. Corzine, No. 11 Civ. 7866, 2014 WL 216474 (S.D.N.Y. Jan. 17, 2014); In re MF Global Holdings Ltd. Sec. Litig. (MF Global I), F.Supp.2d, No. 11 Civ. 7866, 2013 WL 5996426 (S.D.N.Y. Nov. 12, 2013) (the " Securities Class Action" ). The Court assumes familiarity with these previous decisions.

Defendants' arguments in support of their motion to dismiss simply echo arguments that the Court has previously rejected in its related decisions. In essence, Defendants continue to assert that " nothing happened at MF Global for which a single one of the . . . Defendants could possibly bear any legal responsibility." MF Global I, 2013 WL 5996426, at *3. But assuming that the allegations made in the Complaint are true and drawing all reasonable inferences in the Trustee's favor, as the Court must at this stage of the proceedings, see Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002), " it is reasonable to infer that someone, somewhere, at some time did something wrong to set in motion such an extraordinary chain of events causing such extensive harm to so many people and interests." MF Global II, 2014 WL 667481, at *2. In regards to Defendants' claim that the Complaint does not plausibly allege that they bear any liability for MF Global's collapse, " [t]he Court has previously summarized its response to these arguments: 'In evaluating the application of the law that Defendants argue would allow the outcome they seek at this stage of the litigation, the Court's assessment may be simply stated: It cannot be.'"

Page 810

[WL] at *3 (quoting MF Global I, 2013 WL 5996426, at *4).

For the reasons detailed below, Defendants' motion to dismiss is DENIED.

I. LEGAL STANDARD

Rule 12(b) (6) permits dismissal of a complaint for " failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). " To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). This standard is met " when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. A court should not dismiss a complaint for failure to state a claim if the factual allegations sufficiently " raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. The task of a court in ruling on a motion to dismiss is " to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." In re Initial Pub. Offering Sec. Litig., 383 F.Supp.2d 566, 574 (S.D.N.Y. 2005) (quoting Levitt v. Bear Stearns & Co., Inc., 340 F.3d 94, 101 (2d Cir. 2003)) (internal quotation marks omitted), aff'd sub nom., Tenney v. Credit Suisse First Bos. Corp., Nos. 05-3430-CV, 05-4759-CV, 05-4760-CV, 2006 WL 1423785 (2d Cir. May 19, 2006). A court must accept as true all well-pleaded factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. See Chambers, 282 F.3d at 152.

Both causes of action that the Trustee levels against Defendants concern the duties that directors and officers owe to their corporation. Because MF Global was incorporated in Delaware, the Court applies Delaware law. See Buchwald v. Renco Grp., Inc. (In re Magnesium Corp. of Am.), 399 B.R. 722, 742 (Bankr. S.D.N.Y. 2009) ( " As to matters relating to the duties of officers and directors to the corporations they serve . . . and the extent, if any, to which officers and directors breached them, the Court must apply the law of the state of incorporation, Delaware." ).

II. BREACH OF DUTY OF CARE

Count One of the Complaint brings a breach of duty of care claim against Defendants. In general, under Delaware law, directors and officers owe fiduciary duties of care to their corporation. See Gantler v. Stephens, 965 A.2d 695, 708-09 (Del. 2009).

Defendants argue that in this case, the business judgment rule protects them from liability. Delaware law " presumes that in making a business decision the directors of a corporation acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the company." In re Walt Disney Co. Deriv. Litig., 906 A.2d 27, 52 (Del. 2006) (internal quotation marks omitted). A plaintiff can overcome this presumption if the directors' conduct was grossly negligent. See Brehm v. Eisner, 746 A.2d 244, 259 (Del. 2000).

The Court has previously ruled that the complaint in the Securities Class Action " demonstrate[d] 'facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness'" with respect to statements made by defendants Corzine and Steenkamp in connection with securities offerings. MF Global I, 2013 WL 5996426, at

Page 811

*31 (quoting Kalnit v. Eichler, 264 F.3d 131, 138 (2d Cir. 2001)). In the Commodities Customer Action, the Court ruled that plaintiffs plausibly alleged that Defendants, among others, acted with knowledge of and intent to further both violations of the Commodity Exchange Act and breaches of fiduciary duty. See MF Global II, 2014 WL 667481, at *12, *17.

Given that the Complaint here arises out of the same or similar conduct alleged in those prior actions -- and draws on many of the same public documents used by plaintiffs in the Securities Class Action and the Commodities Customer Action -- the Court sees no reason to deviate from those rulings in this action. The Complaint sufficiently alleges conduct that gives rise to reasonable inferences that Defendants' actions were grossly negligent. It thus survives a motion to dismiss at this stage of the litigation.[1]

III. BREACH OF DUTY OF LOYALTY

Count Two of the Complaint alleges that Defendants breached their duty of loyalty to MF Global. Directors and officers of a Delaware corporation owe a duty of loyalty to the corporation. See Gantler, 965 A.2d at 708-09. The duty of loyalty requires an officer or director to (1) avoid fiduciary conflicts of interest and (2) act in good faith for the corporation's best interest. See Stone ex rel. AmSouth Bancorporation v. Ritter, 911 A.2d 362, 370 (Del. 2006). Bad faith encompasses circumstances when the director or officer does not act " with an honesty of purpose and in the best interest and welfare of the corporation." In re Walt Disney Co. Derivative Litig., 907 A.2d 693, 755 (Del. Ch. 2005), aff'd, 906 A.2d 27 (Del. 2006).

The Court is persuaded that the Complaint sufficiently alleges that the Defendants acted in bad faith. As the Court has detailed extensively in its prior opinions, Defendants and other MF Global officers repeatedly increased the company's exposure to risky bets on sovereign debt and shuffled funds among MF Global's subsidiaries to cover a growing liquidity crisis. These facts give rise to reasonable inferences that Defendants acted in bad faith. On these facts, the Trustee has met his burden to plausibly allege that Defendants are liable for breaches of the duty of loyalty.

In sum, " [t]he arguments [Defendants] raise would be more properly addressed either on a motion for summary judgment or to a factfinder at trial, after a fuller record is developed during discovery." Deangelis, 2014 WL 216474, at *1. The Court thus denies Defendants' motion to dismiss.

ORDER

For the reasons discussed above, it is hereby

ORDERED that the motion (Freeh et al. v. Corzine et al., Adv. Pro. No. 13-01333-mg (Bankr. S.D.N.Y.), Dkt. No. 27) of defendants Jon S. Corzine, Henri J. Steenkamp, and Bradley I. Abelow is DENIED.

SO ORDERED.


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