good morning please be seated bernard madoff's company was a regulated broker dealer here in new york that was supposed to protect customer property obtained from all over the world but instead created fictitious transactions with other people's money in this case is about what remedies are available has that as the trustee seeks to recover money from the beneficiaries of fraudulent transfers and redistribute it to victims because this case involves the fraud of a us broker dealer nowhere but here in the united states can a single comprehensive uniform set of remedies be achieved the securities investor protection act expressly gives the bankruptcy court exclusive jurisdiction over a broker dealer in liquidation  bankruptcy proceedings themselves in their home country yes your fields and others are saying so why so why is this the only place where protection could be given to the lose lose this is the only place where made off is your honor and the fraudulent transfers depend on made offs fraudulent conduct they don't depend on the subsequent conduct there are maybe defenses based on the subsequent conduct the project transfers are made off initial transfers to the feeder funds to collect for the second transfer from the feeder funds to their investors and that didn't take place in the united states didn't know but the first question in the extraterritor is whether the statute is being applied to mess to clean or extraterritoriality and that depends on the focus of the statute and the focus of both the relevant subversion and section five forty eight and five fifty of the bankruptcy code we respectfully submit is the initial transfer there's no reason to chase the money unless you're able to say that the money is in appropriately in someone else's hands yes rather and so the substantive reason why you're entitled to the money is because of the transfer that occurred in the united states not transfers that occurred overseas yes that's right you're overseas transfers are simply tracing matters as opposed to substantive matters yes treacherously so the so i don't understand why the district court thought that it was an overseas transaction well the district court never heard about what about what substantive rights were adjudicated overseas well there are decisions defenses other defenses to subsequent transferees with regard to like good faith or something like that no not common law theories have been adjudicated overseas but nothing about the initial transfers and the defenses under section five fifty b of the bankruptcy code has been or could be adjudicated overseas well the  district court viewed the estate as being depleted when because that's the thrust of the bankruptcy code when was the estate actually depleted what you know m i a s paid money to the feet of funds or when the feed funds paid money to their investors definitely the former enron or because and so why didn't the district court recognize that well the disparate or the two bankruptcy judges who dealt with this case well judge lippman did recognize it in his be a li what the foreign funds are doing in their distributions i don't know and that's really not the trustees concern there's a substantive reason why i don't know it that the way this works is the direct customers are those pursued by the trustee and that's the feeder funds but if the feeder funds recover money they can reduce redistributed to their shareholders and other stakeholders as appropriate for them or you know seeking the right here to go after the feeder funds individuals who i get to for judgments or affect service all over the world have you considered the cost benefit analysis of being able to sue those people  honor my client has certainly consider that this is four billion dollars of transfers at stake in an eye popping very in this litigation and there were some large investors in the feeder funds as well as small investors in the feature phone where they are enough to make it very much worthwhile to go after them and indeed the these lawsuits are against the manager shareholders and service providers of the feeder funds they have already been sued it's not a matter of tracking them down in the future that's against others domestically yes rather they're just to be foot we've had the net winners not losers jacobs and i have had that before so i mean so we know domestically that there has been some success with people got early withdrawals or and got out of the  fund at least they thought fortunately at the time who then had to do with it you clawed stuff you clawed back some of the the money that's true and not only that this court has also had experience with some distributions by feeder funds the three month litigation which was disposed of in a summary order by this court involved a redistribution by a feeder fun of of some money were all these feeder funds investors and that winners all of them no quite within them in individual investors some of them were net winners correct and that's where you're going after not the fines but the people who got the money yes although to judge jacobs this point those who are actually net winners well will presumably be the ones that have to cough up some money and that losers although they might have to cough up some money will get some money back through the feeder funds now the only just spend another couple of minutes on the extra territory you said the net losers within the feeder funds will get some money back through the feeder funds feeder funds on any money now but they get money as a result of the trustees actions or at least at least the some of them do or is not proportionate to what the trustee collects and their losses correct well no it it's more complicated than that and depends on the result of litigation but  the fairfield funds have settled it was worked out ok yes well the fairfield funds have settled and there is a detailed settlement agreement approved by this court and approved by a court in the british virgin islands that such formulas for how money recovered by the trustees is divided by the trustee excuse me by my client is divided between the my trust my client the trustee and mr kristol liquidator for the feeder fund for the fairfield funds presumably when the feeder funds get money don't they have to distributed according to their documents and this is their founding documents and therefore when they have to distribute it even to the net winners as well as the net lose it depends on their founding documents just as you say judge jacobs and and our concern is getting the money back into the made office state and once we've gotten the money back into the made off the state it can be distributed to customers depending on whether they're net losers or net winners indirect investors through feeder funds feeder fund to be a customer absolutely and it goes because if you're right but but the feeder funds investors are not themselves customers that doesn't mean that they're completely out of luck but it doesn't mean they don't have sympathy it means they have to get back whatever they get back through the future funds and how that is determined is the feeder funds concern more than my clients concern that's the distribution end of things which is not really what this is about this is of whoever has it that's correct and that's what that's what section five fifty of the code allows us to do let me say quickly on extraterritoriality and then move to comedy the supreme court's western jiko decision which the parties have discussed in twenty a j order is very much helps us on the focus point i won't dwell on it but i would like to amend that to your attention on the statutory interpretation point if we don't win the focus point or if the court chooses to reach the statutory interpretation point first we commend the fourth circuit's analysis in french and in particular the phrase interests of the debtor and property is used in five forty one and in five forty eight and should have the same meaning in both of us yes we know that in five forty one it's world wide and that applies to all seven paragraphs of five made off the domestic get it but he has assets which of the trustee card can reach them canny yes or hearts of the estate because it doesn't matter where the property is right yes so if if the district court is right but made off it fraudulent transfer in switzerland that would stand the fact that it's his property over there and then transfers it over there his interpretation would be that you couldn't avoid the transfer it's an enormous loophole and that's why so many bankruptcy professor  time of the cause of action by you claim with regard to the project to transfer yes i believe they're trying to use comedy as a shield to protect themselves from liability altogether how many exist to prevent interference with the affairs of other from us that's correct and no foreign nation has sought difference either quite the contrary the b v i court approved the trustees settlement with the fairfield liquidator which contemplates that these claims will be pursued here in new york when it how much money we talking in the m let me add with regard to the united states interest it's not just the interest in calling back fraudulent conveyance as it's also the interest in protecting investor confidence and markets the whole reason that the securities investor protection act was passed in one nine hundred seventy was that confidence in s markets was lagging because of failures of broker dealers and congress acted to further the important u s interest of restoring investor confidence and deem that interest so important that if all else fails up to two point five billion dollars of taxpayer money u s taxpayer money can be used to compensate the customers of a failed broker dealer well that's seventy eight triple h and it's mentioned it's page twenty six of septics brief now even aside from sip of the supreme court recently decided a case called merit management and reminded that the avoidance and recovery provisions of the bankruptcy code quote actuate quote the core principles of bankruptcy close quote that's just a sort of my or his opinion for the court there's just nothing on important about those principles or about treating similarly situated parties the same whether they invested from here in the u s or from overseas now as we've discussed a little bit already judge rake off thought it was important that the apple use are not treated as customers with claims under septa but that it doesn't it's true as far as it goes but it doesn't follow that they don't benefit and again the almost two hundred million dollars that has already been paid to the fairfield estate and the fairfield funds i think should help the court to understand that as well as the treatment litigation that's come before this court literally no us court other than the court below has ever deferred in the name of comedy to a foreign bankruptcy proceeding involving a different debtor the debtor here is made off securities as judge who were pointed out early in the argument the debtors abroad or the feed funds the rationale of comedy as this court said in maxwell twenty two years ago is to allow for an equitable orderly and systematic distribution of the debtors assets the only place that could happen in maxwell was and one the only place it can happen in this case is here thank you good morning good morning it please the court has been wearing for the securities investor protection corporation these cases are brought to recover property money that was deposited by investors with their us broker the money was placed by the brokerage firm into a bank account in new york the monies were then withdrawn misappropriated used by the brokerage to pay other investors take profits these monies that the that the investors deposited are what is called customer property that's a defined term under the securities investor protection act it specifically it specifically includes unlawfully converted property so no matter where the are sent no matter how many times they get transferred those monies are still property that belongs to customers the focus of the relevant provisions here sections five fifty five forty eight of the bankruptcy code and section seventy eight left ash to see three is on the depletion of property to prevent property from being depleted for the benefit of creditors when you say property you mean the estate t customer property in this case property that the stolen property from customers the focus of the action that's or the acts that are relevant to the focus of those provisions was the removal of the property from the account from the bank account in new york that was did mess tick activity not extraterritorial there is no issue of extraterritoriality in these cases where the monies went is immaterial it's irrelevant the main focus was in new york we believe that the court also erred in relying on comedy there is no conflict between u s law and foreign law the b v i court itself signed off or agreed or approve the settlement agreement that would allow these cases to go forward furthermore the interests of the u s are much much closer to the losses in these cases first of all it was money of investors of the u s brokerage firm that was stolen also those very important public policy at stake here the securities industry is a highly regulated industry not only from the beginning when the firm becomes registered as a securities broker dealer through the time that the broker has to maintain or meet certain financial responsibility requirements and even up until and through the time that the brokerage fails it's important that investors know that even if a brokerage fails their assets will be protected a a sip a trustee cannot be put the burden of having to travel throughout the world to try to recover stolen customer property he cannot be made to go into foreign courts have foreign law applied at the risk of inconsistent judgments that is simply not what is intended for or provided under subpoena cipla gives the u s courts exclusive jurisdiction over the over the debtor and its property yes expands the powers of a bankruptcy trustee absolutely international reach absolutely the  sit by itself gives the us courts exclusive jurisdiction over the debtor and its property no matter where located no matter where that property is located and it's important to emphasize that what we are talking about is converted customer property property that was stolen from customers it's simply doesn't make sense it simply doesn't help investors it doesn't go to the whole focus of the statute the whole point of the statute which is to reinforce investor confidence so that they invest so that we have a strong so that we have strong markets a strong financial system it doesn't make sense for the trustee then to have to go throughout the world to try to recover the stolen customer property that is simply not the focus of simba it's not the point of  not what congress intended congress intended for these suits to be heard by the us courts and nowhere else and the b v i court itself would not disagree if the courts any questions i'll be happy to try to answer them but if not we rely on the  point stayed in our briefs and we support the position of the trustee thank you please the court i'm frank feely i represent bank last year worldwide fund management but i speak here for the defendants who are dismissed on extraterritoriality grounds and i will address the extraterritorial points first  mr maloney will address the comedy points my colleague i have to take issue with ms wang's point about seventy eight triple bill for about customer property  property includes the proceeds of converted or stolen or transferred customer property that in other words if mr made off were to convert ten dollars worth of the proceeds and only got five dollars back for the five dollars is the customer property not the original stuff in it in addition to which five dollars for me and gave it and then gave it to mr j what's that what about that can't can't separate chase that you tell me is that we can't chase that of course he can't but not not extraterritorial e that because simply does not provide for extra territorial a deep you're so you're saying that anyone who wants to do a preference better get it offshore quick and into somebody else's hands so the so the us courts can't reach it that is the nub of the matter if we have to read the statute that we've got you know the bankruptcy trust e can travel across the ocean and look look for equitable claims that are of the debtors he may do that under foreign law that's what he does and that's what he's done in this case but is his premises right to do so is that a wrong occurred in the united states a fraud occurred in the united states that's what's empowers him to do it u s law i was in to do it you would say you would say that a fraudster who transfers something to a creditor in switzerland to the creditors benefit is that that that that drugs not reachable no i would not say it's not reachable i would say that the statute does not reach extra territorially therefore the trust of wrong occur where did the fraud occur there is a fraud in the united states and that is the basis by which the trustee can vacate the transaction is it not your honor if this gets to the heart of the question you asked mr engler which is it is section of five fifty eight to simply tracing it is not five fifty eight two has defenses in the defenses or in five fifty b that made a difference that that is true and drifted defenses but the right the substantive right to go after the property stems from five forty eight allow me to pursue the question i thought no i put you answer that i get this the question you get to answer the first does not the right stem from five forty eight begins with five forty eight begins it begins it ends at five forty it if it's a fraudulent transfer it is now there may be some defenses under five fifty but those are defenses under us law so i take it that five fifty does have extra territorial application no your honor and all allow me to explain there are defenses under five fifty be under u s law but there are different defenses to a transfer that takes place abroad those different offenses are in contrast in conflict with the law that the trustee would seek to apply here in fact there's no question about that on this record sipek in its brief it page thirty five concedes that the trustee would apply law which differs from the foreign law which would occur which would have to be applied if we were to look at the transfers that actually took place overseas on to foreign law so i  made up to the feet of exactly and the reason for that your honor is that the i want to address this point first is this a domestic application of the statute that's the question that that we're all going to have to grapple with here and in the western gekko case the supreme court said determining how the statute has actually been applied is the whole point of the focus test so what are we talking about here how has this statute been applied who is suing whom and for what what's happening here is the trustee is suing under five fifty eight to which gives him the power to try to get subsequent transfers and who is he suing he is beg to differ and he gets it from five fifty two if it were in the statute declaration that it's fraudulent he's got nothing to chase i agree however without five fifty eight to he's got nothing to recover that gives him his power to recover and there are specific defenses to it which differ from the foreign law and the foreign lot so how how is this the statute actually being applied this is an important point the trustee is suing these defendants the truth of the bankruptcy court read eighty plus complaints and here's what he found that the trustee had alleged every single one of the defendants who was dismissed on on extraterritoriality is a foreign person every single one of them got his transfer from a foreign person there was absolutely no allegation that any of these transfers took place domestically so how is the statute being applied to the bankruptcy court concluded we conclude that it's being applied extra territorially and impermissibly extraterritorial  hypothetical yes helps clarify this in my that that the the bankrupt the state possesses a statue and the statue is stolen from the earth it's given by the estate for no value and it's taken to the united kingdom and then from there it's taken to italy why can't the bankruptcy trustee seek to get it back in italy he can italy and what is the distinction here the distinction is whether our statute applies extra territorially i and i'm sorry but i thought i was addressing your answer your question i i was asking whether whether the bankruptcy trustee under american law american bankruptcy law can seek to recover the statute which is now lodged in italy we argue that he cannot and the reason for that is that the statute does not reach extraterritorial he has other remedies he can go to italy and seek to get it back if the person he seeks to get back in italy is in bankruptcy in a liquidation he'll have to stand in line in that bankruptcy and that liquidation because the whole point of the presumption against extra territoriality was to prevent collisions of u s law and foreign law and there's no question here that foreign law differs from the law that that you would have the trustee go get a statue has your argument impacted if at all by the fact that nobody abroad seems to be complaining and no government seems to be complaining i don't believe that it is usual or customary for american courts to worry about what some foreigner says about our laws but we must read these statutes we'd be much more interested if they were complaining that we were overstepping and not of them are as i have been told by opposing counsel i think i think the issue of what a mickey say in the case is an issue of whether the me he have said something that moves you whether it is appropriate or not i think that the issue here is he is well put what is the nature of the what is the nature of right i'm sorry here's a claim the trustee at the time of the filing the petition yes acquires the use the the property of the estate yes in the property the estate is defined as legal or equitable  and does not the trustee possess at the time of the filing of the protests the petition a claim to avoid the fraudulent transfers he does have some good has the ending to make history as the property transfer he h a claim against the property it most certainly encumbers it if someone if you if someone has a claim against you for your own with regard your property that's been forcible it's a dead if i had a statute they definitely have a claim that is the exact same situation of the fairfield greenwich case there there were lawsuits against these defendants third party transferees by other parties not by the trustee and they propose they purported to settle their claims and want to settle their claims the trustee goes into court and ends up in the second circuit and says i have an interest in these claims they can't do that this court holds no they transfers well property located formally no doubt about that the question is what where does the trustee get the right to do so and the right originates in new york in the united states under the ability to under five forty eight there's no doubt about that there's i mean that's beyond repute he may seek to avoid the transfer under five forty eight but to recover it he must use five fifty and five fifty one and what is his substantive right to it doesn't spring from five fifty five forty eight i mean you're forgetting half the equation i mean to spoke is soley on the right to trace doesn't tell you tell us anything about what the nature of the right is the nature of the right is the right to recover and it statutorily granted if what we have is a situation in which the trustee would impose u s law and limit broadly transferred money was bank account to one of his creditors such that it was voidable under five forty eight would five forty eight let him do it absolutely would lot of do it because it's property of the estate eight definitely has an extra territorial reach if it's property of the estate at the time of the transfer absolutely five forty one any one covers it clearly then tracing clearly can imply extraterritorial state after there's no right and no i don't i say the hypothetical would be true judge wesley's hypothetical would have force if the transfer were a transfer of what was in fact  state property it would it is five forty one a one only includes property as of the filing property that's been transferred fraudulently transferred prior to the filing has depleted the estate in the words of  longer in the estate and that is the holding of colonial realty in fairfield going to treated his state fraudulently that's the point we understand that when it's recovered it's recovered as property of the estate correct once it's recovered it becomes time i apologise it's quite alright i mean i knew a long time but let me ask you this if someone had stolen it take it they it's a piece of art and they stole it and they went to switzerland ok foreign law was there was no second transfer somebody take something from the estate or given something from the estate and forging the transfer in the united states gets on a plane goes to u k and then goes bankrupt and this thing is within that person's bankrupt the state if the initial transfer under five fifty a one was a domestic transfer there is power under the congressional power and under the presumption against extraterritoriality to recover that that's true and that would raise issues of comedy which i think brings us to my colleague thank you  five fifties is absolutely a liability creating a provision it's not a remedial provision so that's the first total mistake and specifically the let me tell you elements of a five fifty claim your honor and the elements you heard from counsel that there are no defenses that's that's ridiculous but but if you look at the statute the first element of the of the five fifty claim is the transaction has to be voidable avoidable and under five forty eight zero five forty seven or or or something but i but under five forty eight but that's just an element of their case what else they have to show they have to show the u s defenses their field to not to certify forty six the defense will have that overseas we're going to have defenses based on what look back periods are different under under the u s law and under the foreign laws that's an issue about conflicts but look at periods and to be the ice six months of last year and inside it's two years under u s law to look back here it's much longer they have to do defense and this is national imitations defense or so this provision creates this is it's a stand alone provision five fifty eight it creates liability with respect to the second transfer five forty eight by its terms to be looked at your honor only voids the initial transfer it provides no remedy as to the second transfer none of it you don't ever get to the second part of the liability so you do but you don't put it but it doesn't get you anywhere because it doesn't even look it doesn't even  void the secondary transfer it only voids the initial transfer if you don't get the fact that the if you don't have a five forty eight or five forty seven or something please write it be i but i just means we're talking off i forty and so you don't have to you know that that doesn't do we're not talking about a statute and for most of these cases we're talking about shareholders in a foreign fund harley kingsgate or fairfield who redeemed their shares and got paid cash i still one hundred thousand dollars  judge gaiters before he went bankrupt right i stole it from right i went to switzerland i gave it's my favorite niece because the trustee come over and chase it you went to switzerland and you bought a you bought a i just want a house i really love my i think that the lot of new york law and law over the whole world that's not encumber care i'm sorry your honor there's no there's no lien on cash there's no lien on cash even if you stole the cash when you actually give cash to somebody else under new york law under no law is there a l that i think the trustee could go after that claim but the but in for my part of the argument the comedy party organ and which i'd like to focus on now and get their bennis if there's been a swiss bankruptcy proceeding and let's say they're the person who stole that had a lot of swiss creditors right and and he stole from a lot of people the person in switzerland now my hypo but that is going to be what if the what if he sold it to me for a quarter of its value because he 's short on some cash and i and then i quickly spirited across the atlantic and gave it to my niece in switzerland i so it's definitely a fraudulent transfer can the trustee go after i suspect the trustee is going to be permitted under swiss lo after it no no no no no i'm not interested swiss law i'm interested five forty eight and five fifty so can the trustee go after it if the transfer occurs of a painting over the united states has paid them stole the united states it's then we transferred just a couple of the points on a first party are with like and just to clear up i think to a point where the fraud occurred that's never been important never been important not important marson not important in the case which are on our jacob foreign creditors you can get little or no benefit from these recoveries what do you say to that let me let me let me give you a record site that will help you understand what's really going on here if you look at s p eight six you'll see that the foreign liquid harley had a one point three billion dollar net equity claim they walked away from in the us proceeding when they defaulted the trustees claim is one billion dollars but he effectively by virtue of them not pursuing that one point three billion dollars cla night losers because they had a net equity claim all of these entities had made that pretty claim fairfield had a one point two billion dollars now that many claim that they compromised for twenty cents on the dollar me ask you sort of a primitive question on the issue of comedy following up on judge with this question about the painting that was one of the stolen or transferred transfusions consideration and then ended up in another country just assuming that the us trustee can follow it and and and take it on all issues of comedy pretty well subsumed in the question of whether whether the trustee is going to be able to get that painting after the painting is in switzerland bring it right if the swiss police say no no no you can't get it then you're not going to get it and if you go if you want to do what the money in a swiss system in order to to levy on the asset so if you can i mean if if if mr pickard can do that then why can't we  of a foreign interest here your honor but basically what's going on here is to doing trying to do an end around and run around you and you also to the extent that somebody is paying for this sipek proceeding it's the u s securit in fairfield ten thousand dollars i lost my money i'm now being sued or i got that five thousand of the ten thousand dollars i lost i'm being sued for five thousand dollars by  everybody and as he said they're suing that this a dead loser will get some money back it's more complicated because the money will flow in two directions no what you want to be the only flow in one direction the reason why that will be is because he disallowed the harley claim in his proceeding because they defaulted in pay that's why i said they effectively have gotten paid back nine hundred million dollars it got back in proportion and in fairfield money in this magnitude we're talking about we're not talking small change i think judge wright was absolutely right when he said little or no benefit i think that's i think that's the record a little because seven money is going to go back as you want to point it out under their rules which are going to be a net ne to be able to differentiate between net winners net losers so the net loser in that case is going to have to pay up he's not his claims been reduced by eighty percent or eliminated and he's going to come back this can be shared with the net winners so the net loser is all all that's all made up was dealing with your investing so you know when some you to lose some what you can't take is that after you invested some money in fairfield six years later eight years later  years later all the sudden you have this claim that the money you got back in distributed to shareholders who are no longer in your fund has to be given back that's why that's why systems come in on our side money got into the fund originally for ignorantly that's the point no it isn't that this i'm talking about the fund of the fund of funds overseas or the united states to invest or that invested fruit into one of these circumstances or the french canadian pension fund that invested in a fund of funds that in turn invested into fairfield and and that was canadian pension is money it was not frozen money now it's ten years after the fact the trustee comes back and says oh by the way i'm going to get that money that you got back i want it back and not only you have to give me that money back but you give a foreign liquidator has a skip him the money back as well this court is never permitted dead this never court is never permitted this type of double attack which they're doing in the record their field their fair look at it is attacking every single in collusion with the trustees attacking every single transfer into teaser courts of equity and they now for the not going to take money back from people who've already paid the money the two different court systems and they've had they've had they've had they've had ten years to work out a deal with a one to one already over and they haven't done it and they think and i think that's what frustrated judge bernstein and judge rake off is that they're pursuing the same cla expansive view it's just what that's at the expense at the expense of us creditors who have legitimate claims against the state but the stage is diminished because of the fact the transfers correct but the claims overseas are not but the second half is completely wrong or the estate is diminished by the on availability of those of the funds held by those creditors correct correct and to the detriment of whom to the detriment of the attacked here are nischelle transfers for by the foreign estate right and that foreign estate has as has as it's not me who said this and where did the funds originate from the funds that the funds they argue that they originated i think that it's probably unlikely that distressing exercise will go anywhere because this is the way it worked in the real world the way it worked in a real world is that the foreign fund would get money in from their investors in the b the i and at the same time that they york that's going to be a huge accounting burden on a foreign estates and on everybody by pursuing this kaka maybe theory of of secondary liability but the foreign estates have a very legitimate interest  was finally mentioned at the very end of mr moloney's argument it's this court's leading comedy precedent adopting the factors from section four zero three of the third restatement for prescriptive comedy which are all about the importance of the u s interest the important of the foreign interests of choice of  and by the trustee here they may have to pay twice is that correct that is the concern that has been expressed it's not a real worry tell me why ok different analyses for different feeder funds for harlee which mr maloney mentioned several time the liquidators of the harley fun made a business decision not to come to the united states and file a customer claim so there's there's no duplicate of actions with respect to harley with respect to fairfield and kin gate there are actions by different plaintiffs that involve the same ultimate assets with fairfield the problem is completely obviated by the settlement agreement and it by the way mr maloney referred to it as collusive this court has rejected that directly with regard to ken gade its ongoing litigation but the we have had our claims dismissed by the lower courts here in the united states and it's remains to be worked out what will be done to protect against  duplicative recoveries but there will be protections against duplicative recoveries whether it's because the trustee in the liquidator to work them out or because of the doctrine of restrain a cut of there will be protection someone comes to the trustee as i already was i already paid already paid back some of this money a proceeding in the b v i that would be conclusive to the trustee in terms of for the pursuit of the fines i can't make that commitment as i stand here today but would it be taken into account and there are instances where there are defense available of the transfer and most of them pertain to the transfer and other things that would be adjudicated in bankruptcy court one of the situations where there might be a particular interest with regard to transfer your where there's a good faith exception or shorter statue limitations recognized in the area where the transfer occurred why would the law that jurisdiction have something to say about the role of well the good faith defense is in five fifty b that us defense and if it is an under foreign law as well there is no true conflict there's no there's no comedy problem and we're back to the statutory interpretation question with regard to different statute of limitations the main point about the statue of limitations here in the united states in five fifty f is that it's key to the avoidance of the initial transfer so that your honor has been suggesting in many of your questions the focus of u s law is on the initial transfer and under western jiko and under morrison and r j reynolds that ends the analysis on extraterritoriality so what's left on extraterritoriality is the balancing the choice of law balancing that is conducted under maxwell under the restatement and in a hypothetical case in which there were some pointed conflicts some true conflict which is a threshold requirement or maxwell could there be some deference to foreign law maybe but that's not this case at all judge leslie i fifty operate to call it remedial but it is a remedial tracing statutes to maloney is arguing that that the the path that you advocate will lead to conflicts with foreign laws conflicts with foreign courts mind boggling complexities and your answer every double sided double recoveries and your answer really is that after ten years these things have been met and become the subject of settlements but the settlements had looked the byzantine in themselves so in a way you're refuting yourself by saying that that we can we can negotiate over the years and get over these problems if it takes years to negotiate these problems than just him along his argument has real force well i'm not sure that that has anything to do with the relative importance of the us and foreign interests i'm not sure it helps on the comedy point but has to do with comedy because because people are negotiating against a background of not knowing of not knowing the answers to questions that we're dealing with here and you're saying don't worry about those questions because they can be worked out and in complicated settlements which billion flows here are the big inflows there but if we just apply u s law in accordance with french the only court of appeals case on point then there is predictability the predictability starts with the fact that there is an attempt to apply to bodies of all that's not our attempt we want the u s law to apply with regard to the settlement agreements or applies in foreign countries is that's what it is to be a country of course but look at western  ko in which the damages were awarded in foreign countries and there were arguments about conflict with with foreign law the supreme court disposed of that very quickly it said no because the focus is the infringement the remedial section applies worldwide here the focus is  avoided transfer which is the made off transfer the initial transfer and it applies worldwide i wouldn't since your honor brought up the settlements and their complexity outlook that would like to say a word if fairfield settlement though complex is defended it resolves all these double recovery problems there's notable recovery in harley and there's not going to be any settlement with harley because they chose not to file claims the only lingering complexity is the king gate settlement and yes maybe there's some complexity but that's not a reason to set aside a law that congress intended to apply overseas as we take our hypothesis into the extra territoriality analysis and say to my client go to foreign jurisdictions and trace this money when we sue in foreign jurisdictions we're suing the funds not their shareholders it's here that we sue the shareholders thank you thank you we will argue well we will reserve decision and