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Access over workers' compensation decisions, including En Banc, Significant Panel Decisions, and writ-denied cases.

Case No. 09-11893
Regular Panel Decision

Picard v. Estate of Mendelow (In re Bernard L. Madoff Investment Securities LLC)

This memorandum decision addresses a motion by Irving H. Picard, the Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), seeking leave to amend a complaint against Steven B. Mendelow and other defendants to recover fraudulent transfers. The Trustee's original complaint, filed in 2010, alleged that Mendelow knew or should have known about Madoff's Ponzi scheme. The court outlines the history of the BLMIS Ponzi scheme, Mendelow's role as a sophisticated investor and operator of feeder funds like Telfran, and how he allegedly received guaranteed returns and fictitious profits (Extra P&L) from BLMIS. The decision discusses the impact of evolving pleading standards and the applicability of the Section 546(e) safe harbor on the Trustee's claims. Despite objections from the defendants regarding undue delay and prejudice due to the deaths of key witnesses (Frank DiPascali and Steven B. Mendelow), the court grants the motion to amend, finding that the Trustee's proposed amendment plausibly alleges Mendelow's actual knowledge of the fraud and that this knowledge can be imputed to the other defendants through agency relationships. However, the motion is denied to the extent it seeks to recover transfers predating January 1, 2001, when BLMIS was formed as a limited liability company. Claims against subsequent transferees are dismissed without prejudice.

SIPA liquidationPonzi schemefraudulent transfersmotion to amend complaintactual knowledgeagency relationshipfeeder fundsfictitious profitssecurities law violationsbankruptcy trustee
References
41
Case No. 2025 NYSlipOp 01871 [236 AD3d 598]
Regular Panel Decision
Mar 27, 2025

Mondrangon v. Trustees of Columbia Univ.

Plaintiff Adan Mondrangon initiated an action against The Trustees of Columbia University after allegedly tripping over plumber's net and pipes in the basement of a university building. Columbia University subsequently filed a third-party complaint against Absolute Plumbing & Heating Corp., their plumbing contractor, seeking indemnification and alleging breach of contract for failure to procure insurance, attributing responsibility for the hazardous condition to Absolute. Absolute Plumbing & Heating Corp. moved for summary judgment to dismiss the third-party complaint, presenting evidence that their recent work did not involve the materials cited. However, the court found triable issues of fact arising from conflicting deposition testimonies, particularly concerning whether Absolute had worked on the basement project and could have been the source of the materials. Consequently, the Supreme Court's order denying Absolute's motion for summary judgment was unanimously affirmed by the Appellate Division, concluding that credibility issues were for a jury to determine.

Premises liabilitypersonal injurysummary judgmentindemnificationbreach of contractthird-party claimconflicting testimonytriable issues of factAppellate DivisionNew York courts
References
3
Case No. MISSING
Regular Panel Decision

Thielmann v. MF Global Holdings Ltd. (In re MF Global Holdings Ltd.)

This case involves motions to dismiss an amended class action complaint filed by former employees (Plaintiffs) against James W. Giddens, as SIPA Trustee for MF Global Inc., and Louis J. Freeh, as Chapter 11 Trustee for MF Global Holdings Ltd., MF Global Finance USA, Inc., and MF Global Holdings USA, Inc. The Plaintiffs allege violations of the federal WARN Act and the New York WARN Act due to employment termination without sufficient notice. The Court granted the SIPA Trustee's motion to dismiss with prejudice, finding the "liquidating fiduciary" principle applicable to MFGI as its statutory purpose was liquidation. However, the Chapter 11 Trustee's motion to dismiss was granted without prejudice and with leave to amend, as the factual record did not conclusively establish that the Chapter 11 Debtors were solely liquidating at the time of layoffs, and the complaint was otherwise deficient. Claims for vacation pay and unpaid wages were dismissed without prejudice to be handled in the claims allowance process.

WARN ActNew York WARN ActClass ActionMass LayoffsPlant ClosingsBankruptcy ProceedingsCorporate LiquidationChapter 11 ReorganizationSIPA TrusteeLiquidating Fiduciary Principle
References
26
Case No. MISSING
Regular Panel Decision
Nov 20, 2012

Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC

The Trustee (Irving H. Picard) for the Madoff liquidation seeks to recover $42 million from the Taiwanese Bureau of Labor Insurance (BLI), a subsequent transferee of funds originating from BLMIS. BLI moved to dismiss the Trustee’s complaint on four grounds: lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA), lack of personal jurisdiction, inability to recover as a subsequent transferee without avoiding initial transfers, and that claims are barred by the presumption against extraterritoriality. The Court denied BLI's motion, finding it has both subject matter and personal jurisdiction over BLI due to BLI's purposeful investment activities in New York-based BLMIS. The Court also ruled that the Trustee can pursue recovery from BLI because the initial transfers are 'avoidable' and the claims are not barred by extraterritoriality, as the statute's focus is on the domestic depletion of the bankruptcy estate.

Bankruptcy LawMadoff Ponzi SchemeForeign Sovereign Immunities ActPersonal JurisdictionSubject Matter JurisdictionAvoidance ActionsSubsequent TransfereeExtraterritorialityCommercial Activity ExceptionFraudulent Transfers
References
72
Case No. MISSING
Regular Panel Decision

Feltman v. Kossoff & Kossoff LLP (In re TS Emp't, Inc.)

The case involves a Chapter 11 Trustee, James S. Feltman, for TS Employment, Inc. (TSE), who filed a second amended complaint against Kossoff & Kossoff LLP and Irwin Kossoff. The defendants moved to dismiss the complaint, arguing that the Trustee's claims were barred by the Wagoner rule, which typically prevents a bankrupt corporation from suing third parties for fraud if corporate managers assisted in the fraud. The core issue is whether the defendants qualify as 'non-statutory insiders' to bypass the Wagoner rule's application. The Trustee alleged that the defendants effectively acted as TSE's CFO or Treasurer, controlling financial reporting and accounting, despite lacking formal titles. The Court, reviewing the allegations, concluded that the Second Amended Complaint sufficiently pleaded facts to support the inference that the defendants were non-statutory insiders, exercising significant control over TSE's financial operations. Therefore, the Court denied the defendants' motion to dismiss, allowing the Trustee to proceed with the case.

Bankruptcy LawMotion to DismissWagoner RuleInsider ExceptionNon-Statutory InsiderFiduciary DutyCorporate ControlAccounting FraudChapter 11Trustee Standing
References
35
Case No. 07-03-0307-CV
Regular Panel Decision
Feb 14, 2005

Mabel Walter Rogers, Larry Frank Walter, Co-Trustee, Robert Wayne Veigel, Co-Trustee, Dorothy Ann Veigel Oswald and Jo Ann Veigel Eudy v. in Re: Ardella Veigel Inter Vivos Trust No. 2, Amarillo National Bank, Amarillo, Texas, Co-Trustee

This case involves an appeal from a summary judgment in favor of Amarillo National Bank (ANB) concerning various estates, trusts, and management agreements. The primary appellant, Robert Wayne Veigel (R.W.), contended that the trial court erred in granting summary judgment based on the statute of limitations, preventing him from pursuing counterclaims and requesting an accounting. R.W. argued that interests bequeathed by Charles R. Veigel were life estates, not trust interests, and challenged ANB's trustee fees and the lack of an accounting. The appellate court modified the summary judgment to declare that Charles Veigel's will granted life estates free of trust but affirmed the summary judgment regarding the statute of limitations barring R.W.'s claims for disgorgement of fees, accounting, and damages.

Trust LawLife EstatesStatute of LimitationsSummary JudgmentFiduciary DutyAccountingInter Vivos TrustTestamentary TrustProperty CodeCivil Practice and Remedies Code
References
12
Case No. MISSING
Regular Panel Decision

Board of Trustees v. Parker (In Re Parker)

The Boards of Trustees of three Carpenters Benefit Funds filed an adversary complaint against David Parker, seeking to deny his bankruptcy discharge or declare certain debts nondischargeable under 11 U.S.C. §§ 727, 523(a)(4), and/or (a)(6). The debts stemmed from Parker Deco, Inc.'s (where Parker was President) failure to make contributions and remit union dues to the Benefit Funds per a Collective Bargaining Agreement (CBA). A prior District Court judgment had been obtained against Parker Deco. During the trial, the Benefit Funds withdrew their § 523(a)(6) and § 727 claims, proceeding solely on § 523(a)(4). The court found that unpaid employer contributions did not constitute 'plan assets' under ERISA without explicit CBA language, thus Parker was not a fiduciary for those. For employee withholdings, the court found no larceny or embezzlement due to lack of fraudulent intent. Consequently, the court dismissed the complaint, finding the Benefit Funds failed to meet their burden of proof, and denied both parties' requests for attorney's fees.

Bankruptcy DischargeabilityERISA Fiduciary DutyDefalcationEmbezzlementUnpaid Employer ContributionsUnion Dues WithholdingsCollective Bargaining AgreementAdversary ProceedingBankruptcy Code Section 523(a)(4)Plan Assets
References
31
Case No. No. 95 Civ. 0119 (HB)
Regular Panel Decision
Jun 20, 1996

TRUSTEES OF HEALTH & WELFARE v. Schlesinger Bros.

Plaintiffs, Trustees of the Health and Welfare and Pension Funds of the Four Joint Boards and Esther Maiese, filed an action against Schlesinger Brothers, Inc. and The International Leather Goods, Plastics, Novelty and Service Workers Union, alleging violations of ERISA and LMRA concerning the diversion of pension contributions. Schlesinger moved to dismiss the entire complaint, and the International moved to dismiss the ERISA claim. The United States District Court for the Southern District of New York granted both motions, finding that neither defendant acted as a fiduciary under ERISA when negotiating the collective bargaining agreement, nor did plaintiffs have standing under LMRA § 301 as non-parties to the agreement. As a result, the complaint against Schlesinger was dismissed entirely, and the ERISA claim against the International was dismissed.

ERISA Fiduciary DutyLMRA ClaimsPension Fund ContributionsCollective Bargaining AgreementMotion to DismissLack of StandingEmployer LiabilityUnion Fiduciary DutiesBenefit Plan AdministrationSole Benefit Rule
References
15
Case No. 04-14-00657-CV
Regular Panel Decision
Jan 14, 2015

Richard Leshin, Successor Trustee of the Davila Family Trust, Trust A v. Juan Gerardo Oliva, Rosina Oliva, Individually and as Successor Trustee of the Davila Family Trusts B, C, and D, and Alma Guadalupe Davila

A party who seeks to vacate an arbitration award bears the burden in the trial court of bringing forth a complete record that establishes its basis for vacating the award. Leshin has completely failed to carry his burden because he has come forth only with a partial record. Leshin has not brought forth a record showing that he was not brought into arbitration in a manner that would render him individually liable. For this reason alone, the trial court was correct in confirming the arbitrator’s award. In any case, the matters in the record clearly establish that the arbitrator was well within his power to determine that Leshin was individually liable for his wrongful acts. The AAA Commercial Rules of Arbitration, which apply to this matter, provide that the arbitrator had the power to rule on his own jurisdiction, 'including any objections with respect to the . . . scope . . . of the arbitration agreement or to the arbitrability of any claim or counterclaim.' Finally, the Texas Trust Code is clear that a trustee is always individually liable for his wrongful acts committed as trustee, so it was not necessary to sue Leshin in any particular capacity.

ArbitrationTrustee LiabilityTrust DisputeArbitration AwardAppellate ReviewJurisdictionArbitrabilityTexas LawCommercial Arbitration RulesDavila Family Trust
References
26
Case No. MISSING
Regular Panel Decision

Trustees of the American Federation of Musicians & Employers' Pension Fund v. Steven Scott Enterprises, Inc.

Plaintiffs, the Trustees of the American Federation of Musicians and Employers’ Pension Fund, brought suit against Steven Scott Enterprises, Inc. seeking an audit of payroll records from 1992-1994 to verify pension fund contributions. Steven Scott moved for summary judgment, asserting that fifteen prior settlement agreements with William Moriarity, a Pension Fund Trustee and Local 802 President, fully settled all monetary claims. The court found that Steven Scott reasonably relied on Moriarity's apparent authority, and the Pension Fund's actions, including cashing checks and failing to repudiate the agreements, established equitable estoppel and ratification. Consequently, the court granted Steven Scott's motion for summary judgment, concluding that the Pension Fund was bound by the agreements and dismissing the plaintiffs' complaint.

ERISALMRAPension FundEquitable EstoppelApparent AuthorityRatificationSettlement AgreementsSummary JudgmentEmployer ContributionsUnion
References
21
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