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I UNITED STATES BANKRUPTCY 0OURT I THE COURT: Rothstein Rosenfeldt & Adler.
SOUTHERN DISTRICT OP FLORIDA 2 MI right May I have appearances, please?
2 3 MR. LICHTMAN: Good morning, Judge.
3
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
ti II MR. NESVEZTH: — both of whom are MOTE
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 (SIR) 15 MR. FARMER: Good morning, your HOME
14
16 Gary Fanner on behalfofLM, Brad Edwards, and
15 August 4,2010
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,
Mei Mos 9130 ant, se4 the knave% 23 subject matter of en agreed order that was submitted
21 omemendng
14 proccedino were had: 24 to me.
25 Repotted By: Mutant Franz= 25 MR. LICHTMAN: Correct, Judge.
Page 2 Page 4
1 APPEARANOIS 1 THE COURT: Mr. Scherer.
7 2 MR. SCHERER: Yes, sir, your Honor.
3 BERGER 8/910BILMAN. try
CHARLES H. WHOA" ESQUIRE 3 I'm William Scherer and I'm here on behalf of a
4 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 on beloiltofeictkret 7 THE COURT: All right. That leaves us with
s 8 Docket Entry 807 and 819. 807 is Jeffrey Epstein's
9 FOWLER MITE. BIJRN6TT, by
RONALD 0. M3TWIRTIL ESQUIRE 9 motion.
10 LILLY ANN SANCHEZ, ATIORNEY•AT.LAW 10 MR. NEIWIRTH: Thank you, your Honor, and
CHRISTOPHER E. KNIGHT, ESQUIRE
11 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 While this was still in process, in
15 on. MINN of LEL Brad Edon and
16
Fumy Rae Wtimag Edwin% Fatal & ',Orman 17 May, tinder Docket Entry 672, your Honor entered
16 18 an order standardizing procedures for obtaining
17
19 discovery from Mr. Stettin and the RRA estate,
IS 20 and at /cast on the face of it, it takes
19 21 jurisdiction ova all discovery efforts against
70
21 22 the trustee. That left us in a quandary.
n 23 We had a subpoena pending in State
73 24 Court. We had correspondence from Berger
24
75 25 Singerman on behalfof the trustee dist they had
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1 identified information and they were processing I taken jurisdiction over these discovery matters
2 it, including vetting for attorney/client 2 and attempted to standardize discovery efforts
3 privilege issues, but then In the meantime carne 3 for the trustee. There's a lot of people that
4 your Honor's order on May 18th, so we had to go 4 want things from the trustee.
5 The trustee is overseeing an estate
5 back and reinvent the wheel and go through the
6 necessary hoops in order to comply with that 6 which involved somewhere in excess of 70 lawyers
7 In the meantime, as we sit here now, we 7 and lots of cases and lots of problems, and
8 still have no production. We have a trial date 8 literally millions of documents, and we have
9 coming up in October, and we have a motion for 9 absolutely no problem with the standardized
10 order, but that means that somehow or other wo
10 protective order coming from a party who's
11 have to be able to deal with it in a standardized
11 already settled out, the LM party. They DO
12 manner, instead of Mr. Flumes suggestion, which
12 longer have anything directly to do with this.
13 Further, we are advised by the I3 is go back to Slate Court and deal with it over
14 there.
14 creditors' committee that in addition to what was THE COURT: What is the status of the State
15
15 proffered to us, that at some point In time there
16 Court proceeding?
16 had been something like ten boxes of records MR. NEUWIRTH: May 1 defer to my partner,
17 pertaining to these particular issues and someone 17
18 on behalf of the victims had been given, or 18 who is more familiar with that?
19 MR. KNIGHT: Your Honor, Christopher
19 several someones, had been given access to those
20 Knight, if I may? While we were waiting for the
20 ten boxes and had viewed them, which would
21 documenu from the Stettin office, we obviously
21 vitiate any attorney/client privilege in any
22 wanted to go down two tracks because we had an
22 event
So what we are trying to do is fashion 23 October trial date. The status of it is we could not
23
24 come to an agreement with the other side.
24 a mechanism so we can comply with your order,
25 Mr. Ackerman was at the last beating, in which the
25 Docket 672, about standardized means of getting
Page6 h&c 8
1 judge said, one, !need a representative of the
I production from the trustee, allow for the
2 mines here and two, shouldn't this be back before
2 appropriate vetting of the materials for
3 attorney/client privilege, and we must bear in 3 you, Judge Ray.
4 THE COURT: You can't proceed against
4 mind that this is one objector, there's a lot Rothste in in the State Court, they're here.
5
5 more documents than that 6 MR. KNIGHT: And that Is the same thing I
6 To the best of our knowledge, the
7 think Judge Crow recognized, and that's why we're
7 documents that pertain to the LM party, who is
8 back here, and that's why we had to file the motion.
8 settled anyway, may be 15 percent of those which MR. ACKERMAN: The claim against
9
9 are responsive to the Inquiry that we made of the
10 Rothstein is against him Individually, and it's
10 trustee, but in any event, someone has to vet 11 against Brad Edwards individually, and it was
II them for attorney/client privilege and do a
12 against one of the claimants, 12A individually.
12 privilege log. 13 '11W COURT: So It's not against the debtor
13 Now, Mr. Farmer's office on behalf of
14 estate.
14 LM wants to do that We don't think Mars 15 MR. ACKERMAN: That's correct.
15 appropriate. We third* the privilege at this 16 MR. KNIGHT: Just to go a little further on
16 point, since the case is settled, lies with RRA 17 what Mr. Neiwinh was saying. Out of these documents
17 and, therefore, the trustee, rather than 18 we've been asking for fora long time, very few of
the
18 Mr. Farmer and his client, because as to them 19 them would even have privilege on their face because
19 case is ova. 20 they have nothing to do with the clients that were
20 Furthermore, we don't think them is
21 represented, what's bees called as LM.
21 any privilege because the boxes have been vetted 22 If there's going to be a log, if
22 before and we'll hear more about that from 23 there's any need, which I don't think there is
23 Mr. Scherer, I assume, because he was the one 24 because I think privilege has been waived, it
24 that was aware of that. 25 needs to be a log put together by the trustee,
25 And last, but not least, your Honor has
2 (Poses 5 to 8
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I not anybody else that has some sort of interest 1 everybody first
2 in it. 2 MR. KNIGHT: Okay.
3 If there's a problem with payment for 3 MR. FARMER: Thank you, your Honor, may it
4 those, et cetera, our client has already offered 4 please the Court Again, Gary Fanner on behalfof
5 to the trustee, to Mr. Lichtman, we will pay for 5 the interested party, LM, also on behalf of
6 it, whether ifs a special master or whether it's 6 Brad Edwards and I'm sorry, your Honor, Mr. Edwards
7 a contract attorney, if they need to do that, but 7 is here with me. I neglected to Introduce him to S
8 1 don't think wo even need to reach that. 8 Court earlier.
9 Idris& these documents are long 9 MR. EDWARDS: Good morning, your Honor.
10 overdue. They have been produced to others, they 10 MR. FARMER: There has been a lot of
11 have been used in depositions for others, they 11 discussion here about your Honor's standardized
12 are out there, and ! think the privilege Issue is 12 production order and I think that you need to
13 just being used as a smoke screen to keep our 13 understand that this particular matter, which is
14 client from being able to get the documents he 14 before you today, is anything but standard or common
15 needs to be able to prove his case. 15 to the matters before this Court
16 Thank you. 16 You need to understand the nature of
17 MR. ACKEMAN: Your Honor, one other 17 the ease. Jeffrey Epstein is an admitted
18 matter. Judge Crow expressed a concern about 18 convicted pedophile. He sexually assaulted
19 entering any order against the trustee or his 19 dozens and dozens of young girls under the age of
20 counsel without them being present 20 15. He pled guilty to this and he has settled
21 Initially we had filed a motion to 21 every civil lawsuit filed against him on this
22 compel in the State Court, but we didn't realize 22 issue.
23 at the time or It was unclear, because we had 23 Despite all of this, Mr. Epstein has
24 just taken over the case from another law firm, 24 seen fit to file a lawsuit against LM, who is one
25 that the Court had entered its order. 25 of the plaintiffs against him; against
Paz: lo Page 12
1 There was some discussion prior to the 1 Brad Edwards, LM's attorney; and against
2 hearing and when we went to the hearing, it was 2 Mr. Rothstein.
3 clear that there was no agreement that had 3 Now, Edwards, myself and all the
4 existed and Judge Crow said, I'm not entering en 4 members of our fi rm were RRA attorneys when
5 order, I'm not doing anything on this motion 5 Mr. Rothstein took his ill-fated trip to Morocco
6 undl the bankruptcy trustee is represented. 6 and did the things which are now so well known,
7 Ho was concerned because this Court's 7 but the fact of the matter is that this discovery
8 order had set up the standardized procedure for 8 request ls a blatant attempt to obtain clearly
9 dealing with these arguments and had reserved 9 privileged documents related to the
10 jurisdiction relating to any subpoena or request 10 representation of LM and many other victims, by
11 for documents from the trustee. so that's why 11 the way.
12 we're here now. 12 And if1 can show your Honor a copy of
13 THE COURT: All right. 13 the subpoena itself, I don't think that the
14 MR KNIGHT: Your Honor, just one other 14 breadth of the subpoena has been adequately
15 point. We tried to work, and we've been working with IS represented to the Court. If you peruse this,
16 Mr. Lichtman, tried to work out a protective order 16 you will see they are asking for communications
17 between the trustee and Epstein regarding the 17 with private investigators, they're asking for
18 subpoena. Mr. Lichtman and Ms. Sanchez agreed to 18 contingency fee contracts, they're asking for
19 language on it I have a copy of it. 19 every comnamicadon between any member of the
20 Mr. Farmer, with his motion for 20 firm, and they throw Rothstein in just to make it
21 protective order, would not agree to that, but if 21 sexy, about these cases.
22 the Court would like to have a copy of what the 22 Now, your Honor. clearly communication
23 draft was, I will approach your clerk, but if you 23 about the representation of a client falls under
24 do not want that, I also — 24 not only the work product, but if the client is
25 THE COURT: Well, let me hear from 25 involved in the communication, also the
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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
none, but for many 3 of relief from the Bankruptcy Court Epstein is
3 responded and said none, nono,
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 privileg e. 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 the trustee to turn this electronic
ing? 9 you instruct
9 asserted in the State Court proceed information over to us. We will
MR.. FARMER: Yes, air. 10 docume ntation
10 riate privilege log with the
THE COURT: And there is a privileg e log 11 file the approp
11 Court judge who is presiding over the
12 Circuit
12 and the judge has made a ruling? is most familia r with the case, who
MR. FARMER: No. The dispute now really is 13 case, who
13 be conside ring the upcomi ng motion for
14 will
14 over who's going to file the privilege log and nt, and possibl y trying the case,
t is that the 15 summa ry judgme
15 respectfully, Judge, what we sugges and that way your Honor is not burden ed with this
16
16 trustee has been thrust into this matter simply incur fees and
17 because the trustee stands in the shoes of all the 17 matter, the trustee does not
18 former attorne ys at RRA, and the trustee is likewis e 18 expenses of having to go through all of these
to the eases and 19 document, prepare a privilege log and our
19 bound by the privileges that attach
20 client and Mr. Edwards — Mr. Edwards is also a
20 to the lawyers that were at the firm.
21 The trustee has repeatedly acknow ledged 21 party of that lawsuit He enjoys his own
22 privilege, your Honor, over and above, or in
22 the fact that it Is bound by those privileges
23 and, of course, as your Honor knows, the 23 addition to, I should say, the privilege
24 privilege belongs to the client, not to any 24 possessed by our former client and, of course, I
25 lawyer or any law firm. 25 know couasel knows that the privilege extends
Pop 14 rats it.
So the trustee is really kind of stuck 1 beyond the litigation.
1 So although Mr. Epstein paid a ton of
2
2 in the middle here. You've got the pedophile who
3 money for this claim that is supposedly
3 wants documents related to the cases he's already 4 frivolous, it has been settled, but the privilege
4 settled and pled guilty for. Those documents,
5 the electronic documents, at least, the e-mails, 5 still extends and it remains in place. So we
6 simply want to make sure that our investigative
6 electronically stored Information is how ifs
7 referred to in the discovery request, your Honor, 7 materials, our reports, other documentation
8 relating to the claims we have and have had
8 are not In ow possession, they are in the
9 against Jeffrey Epstein are not put into the
9 possession of the trustee because the trustee
10 hands of Jeffrey Epstein's attorneys.
10 took the computer system. II Now, we just want the chance to review
II So the trustee doesn't want to incur
12 these documents and prepare the privilege log and
12 the cost and expense of filing a privilege log
13 the trustee is kind of stuck In the middle here,
13 and, frankly, I don't know that the trustee has a
14 Judge. Remove the trustee from the equation, let
14 full appreciation of the nature and specific 15 us get the documents, we'll file the privilege
15 facts of the cases that would enable it to
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 All that is going to be pretty time
19
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 MR. FARMER: Thank you, your Honor.
24
24 matter which would involve bankruptcy estate THE COURT: Mr. Lichtman, Mr. Scherer, your
25
25 assets going to Mr. Epstein. Unlike
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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 go first. 3 believing that Bill Clinton was on the airplane
4 MR. SCHERER: I think he wants me to go 4 with Mr. Epstein and these young woman and other
5 first. 5 personages, I can't remember who they are, and
6 THE COURT: All right. 6 all sorts of other allegations that really were
7 MR.. SCHERER: Your Honor, in November 7 not even related to the LM case.
8 And to the extent that any lawyers from
8 we filed a lawsuit in State Court and we alleged
9 that as a part ofMr. Rothstein and the firm, and 9 the RRA finn, former lawyers, made a ton of money
10 the firm's employees, and maybe some ofthe 10 or however Mr. Farmer talked about it, we're
11 firm's attorneys, conspired to use the Epstein/LM 11 interested in that ton of money because if they
12 litigation In order to lure $13.5 million worth 12 were involved In this scheme, this fraud, there's
13 ofmy victims, my clients, into making 13 a crime fraud exception, and in addition, I want
14 investments in these phoney settlements. 14 to see the ten boxes that they brought down.
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 as we've amended a few times, we allege that 17 when he left the law firm, I presume. So we want
18 sometime in late October, that my clients were 18 the ten boxes, we want all the communications and
19 invited into the Rothstein finn with 19 we want to look through everything on behalf of
20 my State Court ease, but also on behalfof 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 ofMr. Epstein, and
23 the firm, other than Rothstein, was Involved in
23 these are kind ofsensational 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
And my clients, a number of them and 25
25
Fate 20
Page IS
then spinning off a fraud from it is the same
1 their lawyer, went into the Rothstein conference
2 that was perpetrated on the Morse — in the Morse
2 room and Mr. Rothstein brought down — summoned
3 situation, as has been alleged and widely
3 the investigators, two of than, two or three of
4 produced.
4 them, to bring down the Epstein file. And the I can't conceive that Mr. Edwards and
5
5 lawyer that my clients brought from a national
that 6 the predecessor law firm would have any standir.g
6 finn, went through the LM boxes, ten of them 7 to prepare privilege logs or anything else, given
7 the investig ators brough t down, and conclud ed
8 what 1just 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, ofcourse, is he told everybody that 1t 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
4
12 Mr. Edwards, that that were a number ofother
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 THE COURT: Where are the ten boxes?
15 that wanted to settle with Mr. Epstein on a
15
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 halfmillion 20 successor law firm. The trustee does not have
20 dollars. I believe that Mr. Rothstein and others 21 them. And then in addition, there's about 6,000
21 in the firm also told that story to a lot of 22 e-mails that the trustee has, and I bet you when
22 other people, and let a lot of other people 23 we look at Qtask, there's going to be a boatloa
d
23 examine those ten boxes of the real case. 24 more.
24 In addition, as we have alleged, that My clients were also advised during
Edward s and the firm put sensational 25
25 Mr.
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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
6 the firm that told my clients that they, indeed, 6 happened here. I think that what Tve heard from all
7 had even identified more of these victims that 7 the parties are comments that aro correct, and not
8 Mr. Rothstein didn't even know about at that 8 necessarily correct, and Pm not suggesting
9 time. So we know it wasn't just Mr. Rothstein falsehoods. We Just have kind of a different
10 spinning the talc, there were a lot of people in 10 perspective of some things and there arc some points
11 the firm. 11 that ought to be corrected.
12 We've alleged almost all of this in ow 12 Mr. Stettin received a subpoena in a
13 State Court action that we filed in November, up 13 Palm Beach State Court action for production of
14 to where we are right now, but, your Honor, 1 14 documents, and as we had done In virtually every
15 think your Honor is going to have to deal with Is subpoena, we went to ow forensic accountants,
16 these issues in this court and I would urge you 16 the Berkowitz Dick Pollack & Brant firm, and
17 to have the trustee get involved and let the 17 said, okay, we need to produce c•mails and we
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
2 names these people as defendants? 2 requests for production of documents related to
3 MR. SCHERER: It names Rothstein. It 3 claims that those moving parties or requesting
4 does not name Mr. Edwards. It just names 4 pasties would have as it pertains to them trying
5 Rothstein, not the finn, and lays out the facts 5 to recover some aspect of money as pertained to
6 and says other people in the firm. We did not 6 the Portal scheme.
7 name them because we want to see the documents 7 Okay. Lie Mr. Scherer, who said 1
and see whether they had involvement. 8 need a bunch of documents, cm you help us? So
9 But the facts that I have alleged for 9 we would enter into, on a one by one basis, a
10 you, your Honor, is pretty much what I've alleged 10 protective order that was very, very tightly
II in my first through third amended complaint in II negotiated. There is no standard form protective
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 same position that he that he has asked the 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 this, get these documents and deal with it with 22 pertains to MS Capital, and on and on
23 you, rather than allow the successor law firm to 23 So, in any event, what we realized is
24 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
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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 ofright 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 internal e-mails where we would put in search,
4 investigating claims that can bring a recovery
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 And when we realized the volume of
7 their individual lawsuits.
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 ofpaper, 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 tremendous amount of time. This is not an asset
12 focused on with all these other document
13 of the estate that we can, if we have to, warrant
13 productions.
So we get the 6,000 e-mails, and on the 14 doing the work. the hard work, as we've done on
14
15 many of the other claims, some of which already
15 eve of one ofmy colleagues getting ready to
16 are before you for settlement purposes. This is
16 enter into — either enter into one of these
17 protective orders or say, here, take them, like 17 a liability to the estate and an expensive one.
18 So we really didn't want to go through
18 we've done with everybody else, we looked up and
19 the undertaking ofhaving to protect the
19 Mr. Stettin and I said, time out. We have a
20 privilege, though we would, and candidly,
20 legitimate privilege issue here.
And I want to be clear, we don't want 21 Epstein's counsel has said well pay you to do
21
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 until the Court tells us to, and I want to also 24 adversaries moving as quickly as we can and were
25 fighting a lot of battles on a lot of different
25 be clear, we wish we weren't hen. We would
Paten
Pate 26
I grounds, we still really don't want to do that,
prefer not to have a fight on any of this stuff
2 and also because we don't know the Epstein case
I
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.
But be that as it may, we found that 12 said, we're still willing to enter into a
12 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 ofno claims can be brought
15 protocol ofpreparing the stipulated protective 16 against Mr. Stettin or the estate if we produce
16 order that is effectively a mirror imago of that
ce 17 these documents.
17 which is provided by Federal Rule ofEviden 18 We don't really have a bone to pick in
18 502, we sold there is a need for privilege
19 this mess, we just want to make sure that we
19 log hem 20 follow all of the ethical boundaries required by
20 There are 6,000 e-malls, give or take,
21 Florida law, by rules ofprofessional conduct
21 and we quickly assessed that the time to review
22 We don't wish to necessarily waive somebody
22 6,000 e-mails, this could not be done by a 23 else's privilege. We don't think that's
23 paralegal, it would have to be done by a lawyer. 24 necessarily prudent, but we really don't want to
24 THE COURT: Does this include Qtask or is
25 have a fight in this battle, and we wanted the
25 this in addition to?
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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
7 MR. LICHTMAN: — you direct. 7 here's what happened. I was effectively going to
S THE COURT: -- the potential of a claim 8 tell the State Court judge basically the same
9 against Stettin and the estate for breach of the 9 story I've told you in complete detail and say,
10 anomey/client privilege. 10 we don't really care. We just want to make sure
11 MR. LICHTMAN: correct. II Mr. Stettin Is protected and the estate is
12 THE COURT: So the basis — 12 protected.
13 MR. LICHTMAN: And hence the dilemma. 13 And we had reached an agreement that
14 THE COURT: — for the claim Is there. 14 day, which was we were going to turn over the
15 MR. LICHTMAN: Yeah, right, hence the 15 boxes to Mr. Fantasia firm and we were going to
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 Ms. Sanchez, where I think that we had told her 20 to burden the creditors of the estate with legal
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
1 Suffice it to say, that I have I written order because I didn't want to leave it
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 — II 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 were handling cases. All right. I had a general 14 with him this morning. And I don't wish to spend
15 understanding that most of the files wen picked up 15 more time on h than that right now, but I take
16 by the Farmer fin because they were continuing on 16 him at his word because an awful lot of what I've
17 with that litigation, and that would have made some 17 seen him work on so far has borne fruit.
18 sense, but then wo had also heard that there were 18 I don't care what you want us to do.
19 some boxes that were left behind. 19 All I want to know is that at the end I can walk
20 I believe there are two boxes, I'm not 20 out of court with an order that protects the
21 positive of that, two boxes I think that we may 21 estate and protects Mr. Stettin. So I have told
22 still have, and I'm pretty sure we've sent 22 you the story and leave it to you to fashion what
23 a-mails a couple of times to the Farmer firm 23 remedy you think appropriate.
24 saying, come get your documents. If 1 can answer any questions, I'm
25 Now, why would we do that? A, because 25 happy to.
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I THE COURT: Well, the trustee knows what MR. FARMER: Yes, your Honor. Just very
2 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 plaintiff can still get from Mr. Farmer and his 12 clients.
13 clients in the State Court discovery. The discovery 13 MR. FARMER: RPM seemed to be maybe
14 being sought here Is from the trustee 14 suggested hero today that something untoward occulted
15 MR. L1CHTMAN: Correct. 15 as far as the removal of these boxes. These were
16 THE COURT: and would be subject to the 16 litigation files, pleadings, investigative reports,
17 trustee's responsibility for the privilege log 17 all of these things.
18 because ofhis potential liability. 18 So we needed to get on with those
19 MR. LICHTMAN: Yes, and 1 think you 19 cases, but I think you've heard now from the
20 understand, though, why if we can somehow deflect 20 trustee that this is not an asset and it is an
21 that responsibility, because of the extreme amount of 21 expense. I still think that we arc the party who
22 cost and time to do that, we would be happy to do 22 should prepare this privilege log. We arc most
23 that because, you know, otherwise, we submit fee 23 familiar —
24 petitions that show a tremendous amount of time on 24 THE COURT: Well, no, if I appoint a
25 something that doesn't produce an asset to the 25 special master, you will have an input into that
Pete 34 ►ate 36
I estate, just a liability. I special master and you'll have an opportunity to be
2 THE COURT: Right. This is not an asset of 2 heard before me before I authorize the release ofthe
3 the estate. 3 information, because ultimately the order that's
4 MR. L1CHTMAN: No, its just a liability. 4 going to authorize the release of the information is
5 THE COURT: But could be a substantial 5 going to provide protection to the trustee and the
6 liability. 6 estate.
7 MR. LICHTMAN: Hence the dilemma. 7 MR. FARMER: And, thank you, Judge, l jug
8 THE COURT: Welt, I can appoint a special 8 wanted to make sure, and I was going to request, that
9 master to do it at the expense of the movant and not 9 we have an opportunity to review whatever the master
10 release the information until the special master 10 does and if we think they've missal a privilege or
11 reports back to me and I authorize the release. II 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
16 release of that information. 16 Honor.
17 MR. LICHTM.AN: We would be happy to do 17 THE COURT: All right. Mr. Lichtrnan —
18 that, your Honor, and I note, 1 don't wish to speak 18 MR. L1CHTMAN: Yes.
19 for the Epstein lawyers, they actually offered to pay 19 THE COURT: — I want you to prepare the
20 time for us doing that, and 1said, well, you know, 20 order. I'm going to continue the hearing on the two
21 that's pert of the equation, the other part is — 21 motions, Docket Entry 807 and 819, and I'm going to
22 THE COURT: No, no, no, I can appoint a 22 have you draft an order appointing a special master,
23 special master. 23 the expense of which will be borne by the Epstein
24 MR. LICHTM.AN: Yes. 24 movants. The special master will meet with both
25 THE COURT: All right Mr. Fanner. 25 sides, Epstein and Edwards, and then with the
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1 trustee, and will prepare a privilege log, the 1
2 release of which will be noticed for hearing in front 2
3 CERTIFICATION
3 of me.
4 MR. LICHTMAN: Do I pick the special master 4
5 STATE OF FLORIDA..
5 or do you? 6 COUNTY OF DADE:
6 THE COURT: You can -- if you all can —1 7
7 hate to use the word agree, but if you all can agree, 8 t ryMag t Franzaa, Shorthand Reporter
8 that's fine. If you can% agree, give no three names 9 and Nota Public in and for the State of Florida
9 to choose from. 10 at cargo, hereby certify that the foregoing
10 MR. LICHTMAN: Okay. 11 proceedings were taken before me at the date and
11 THE COURT: You're going to have to check 12 place as stated in the caption hereto on Pagel;
12 with this, quote, "special truster" to make sure they 13 that the foregoing computer-aided transcription is
13 have the time to review the privilege log. 14 a tort record of my stenographic notes taken at said
14 MR. LICHTMAN: The documents. I5 proceedings.
16 WITNESS my hand this 5th day of
15 THE COURT: And it has to be somebody that 17 August, 2010.
16 doesn't have a conflict of interest. 18
17 MR. LICHTMAN: Right Okay. 19
IS THE COURT: All right. Run the order by 20
19 Mr. Neiwirth and Mr. Fanner. Margaret Franzen
20 MR. LICHTMAN: Thank you. 21 Court Reporter and Notary Public
21 MR. FARMER: Thank you, your Honor. In and for the State of Florida at Lap
22 MR. NEIWIRTH: Your Honor, may it please 22 My Commission Expires: April 14,2014
23 the Court? 23
24 THE COURT: Yes. 24
25 MR. NE1W1RTH: Can we say something about 25
Pne 18
1 the time frame because as we sit here right now we
2 still have a trial coming in October.
3 THE COURT: Well, 1 understand that, but 1
4 probably have between five and 6,000 active cases
5 right now and within the Rothstein case, I don't even
6 know how many adversaries and contested matters are
7 pending. III get to it as soon as 1 can.
8 But you can proceed to obtain the
9 information from Edwards and LM in the State
10 Court proceeding. AU I'm governing Is what the
II trustee Is going to release from the debtor
12 estate.
13 All right. Mr. LIchtman, see to the
14 order.
15 la. EDWARDS: Thank you, your Honor.
16 NM. FARMER: Thank you for your time, your
17 Honor.
18 MR. NEIWIRTH: Thank you, Judge.
19 (Thereupon, the hearing was concluded.)
20
21
22
23
24
25
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