trondheim - doc 19 transcript

1

1 Argument

2 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

3 ------------------------------x

4 TRONDHEIM CAPITAL PARTNERS, L.P.,

et al, 5 Plaintiff,

v. 13 CV 04668 6 SUNTECH POWER HOLDINGS CO.,

LTD., et al, 7 Defendant.

8 ------------------------------x

9 MARCUS DUGAW, JESSICA DUGAW

10 v. 13 CV 05608

11 SUNTECH POWER HOLDINGS COMPANY, INC.

12

13 --------------------------------x

14 New York, New York September 12, 2013

15 10:05 A.M.

16 Before:

17 HON. ROBERT P. PATTERSON, JR.,

18 District Judge

19 APPEARANCES

20 TEITELBAUM & BASKIN

Attorneys for Plaintiff 21 BY: JAY TEITELBAUM

22 MINTZ LEVIN COHN FERRIS GLOVSKY & POPEO, P.C.

Attorneys for Defendant 23 BY: GILBERT ALAN SAMBERG

DAVID LOUIS BARRES

24

25

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

Case 1:13-cv-04668-RPP Document 19 Filed 09/30/13 of 71

2

1 (Case called; in open court)

2 THE DEPUTY CLERK: All rise.

3 THE COURT: Please be seated.

4 Trondheim Capital Partners vs. Suntech Power Holdings,

5 and Dugaw vs. Suntech Power Holdings.

6 THE COURT: Is plaintiff, Mr. Dugaw, on the phone?

7 MR. DUGAW: Yes, your Honor.

8 THE COURT: And for Trondheim, who is here for

9 Trondheim?

10 MR. TEITELBAUM: Good morning, your Honor. Jay

11 Teitelbaum for both plaintiffs Trondheim and Mr. Meixler.

12 THE COURT: All right. And for the defense?

13 MR. SAMBERG: Your Honor, Gilbert Samberg for

14 defendant, Suntech Power Holdings. And, David Barres of my

15 firm, as well.

16 THE COURT: Mr. Barres, is that right? Samberg and

17 Barres?

18 MR. SAMBERG: Yes, your Honor.

19 THE COURT: All right. Just want to be sure I'm

20 reading the names and the pronunciation is right.

21 Well, this is a motion for summary judgment.

22 I'll hear from the plaintiff.

23 MR. TEITELBAUM: Thank you, your Honor.

24 Your Honor, I'll address the Court from the podium?

25 THE COURT: Mr. Teitelbaum.



3

1 MR. TEITELBAUM: Thank you.

2 Again, good morning, your Honor. Jay Teitelbaum, for

3 the plaintiffs, Trondheim Capital Partners and Mr. Michael

4 Meixler.

5 Your Honor, just briefly, the procedural history of

6 this case is pretty straightforward. In June of this year, my

7 clients, Trondheim and Mr. Meixler, commenced an action in New

8 York State Supreme Court pursuant to New York CPLR 3213 which

9 is the procedure for commencing an action by a motion for

10 summary judgment in lieu of a complaint.

11 We allege, very simply, your Honor, that there was a

12 sum certain due on a bond indenture which matured on March 15,

13 2013. We, through the supporting affidavits of my clients,

14 allege that Trondheim is owed the face amount of $500,000, plus

15 interest, which was due on March 15 and thereafter.

16 Mr. Meixler alleged in his, or supported in his

17 supporting affidavit, the sum of $50,000 face amount on the

18 indenture, plus the interest.

19 Suntech caused the action to be removed to this court

20 on July, 8, I believe it was. And then, separately, Mr. Dugaw

21 who is on the phone, commenced an action on July 18,

22 essentially on the same facts as ours. But his dollar amount

23 is less. And I'm just raising that only because Mr. Dugaw is

24 on the phone and, hopefully, to save a little bit of time for

25 the Court. But I believe the facts are identical, the



4

1 underlying documents are identical.

2 So that brings us to today's hearing. Suntech filed

3 an opposition to the motion for summary judgment in lieu of

4 complaint and, essentially, your Honor, the objection is not on

5 the merits. In other words, not a defense to payment. In

6 point of fact, the objection is procedural.

7 The first objection is the claim that the 3213 process

8 under the CPLR was improper, because of various reasons I'll

9 touch upon. And the second is essentially the plaintiffs are

10 strangers -- and that's a quote from their papers -- with no

11 standing to enforce the payment terms of the indenture. And

12 it's our position, based on the undisputed facts, that they are

13 wrong on all counts, and that we have the absolute right to

14 enforce the payment of the obligation which matured. We're not

15 talking here, your Honor, about some covenant or some difficult

16 breach that is hard to figure out. We're talking about

17 March 15, 2013 was the maturity date. That date happened.

18 Payment has not been made. The note is matured.

19 Those facts, in fact, are not in dispute, your Honor.

20 The affidavit submitted in opposition by Mr. King, who is the,

21 I guess the CEO of Suntech, admits as much in various

22 paragraphs 3 and 20 of his affidavit. They acknowledge that

23 Suntech borrowed $575 million from bondholders. They

24 acknowledge there is an indenture. They acknowledge there is a

25 maturity date on March 15. And they acknowledge that payment



5

1 was not made.

2 They have a very long list of excuses as to why

3 payment was not made; business economy is bad, they have been

4 sued by a lot of people, they have had issues with their

5 suppliers. But those are excuses, they are not defenses to

6 payment.

7 The note, the indenture, are very clear. Doesn't say

8 pay on March 15 if you can, if you want. It says you pay on

9 March 15th. So we're not talking about a covenant breach,

10 we're talking about something very, very straightforward, which

11 is the occurrence of the maturity date.

12 The indenture, your Honor, is not in dispute. It is

13 annexed to everybody's papers. The maturity date is not in

14 dispute. It is annexed to everybody's papers.

15 The explicit terms of the indenture called for the

16 payment on March 15. There is no dispute that we're properly

17 before this Court. New York law applies, although -- even

18 though, I should say, Suntech is a China-formed entity,

19 China-based entity formed under the Cayman Island law. The

20 indenture specifically provides that the laws of the State of

21 New York apply. And the jurisdiction for any disputes relating

22 thereto are properly before courts in the Southern District of

23 New York, whether they are state or federal courts.

24 Your Honor, with respect to the first main point I

25 think raised in the opposition, which is the 3213 issue, there



6

1 is two pieces to that that I would like to very briefly

2 address.

3 First, is we just think that the defendant is just

4 wrong. In other words, what they have tried to do -- and I

5 think the Court probably has a half of a tree at this point of

6 all of the documents that were photocopied and submitted. They

7 say, look, this is a tremendously complicated transaction.

8 There were tranches, and there were participations, and there

9 were registration rights agreements. There are covenants.

10 There is all of this stuff, all this noise going on in the

11 background. And that may be true. But we're not suing on any

12 of those issues. We're suing on a sum certain, based upon an

13 absolute obligation to pay on the maturity date. We're not

14 saying you breached the covenant. We are not saying you have

15 missed any EBITDA covenant. We're not saying you missed some

16 covenant that was negotiated in. We are saying you promised to

17 pay on the 15th, and you didn't. That is the quintessential

18 3213 motion.

19 And the Court of Appeals of the State of New York has

20 actually said that. And we cite the case in our papers, your

21 Honor. The case is Weissman v. Sinorm, 1996 Court of Appeals

22 case. And it's a simple test, where the instrument requires

23 something in addition to the defendant's explicit promise to

24 pay a sum of money, CPLR 3213 is unavailable.

25 Put another way, a document comes within CPLR 3213 if



7

1 a prima facia case would be made out by the instrument and a

2 failure to make the payments called for by its terms. And

3 that's simply and precisely what we have here.

4 But we -- and it's -- I apologize for the little bit

5 of a digression into 3213 because, frankly, under Valley

6 National Bank, which is the Southern District case from 2010,

7 the Court in that case held that once a case has been removed

8 from state court, the federal court takes it in the posture

9 that it is. So the 3213 motion, and any pleadings in the state

10 court, are essentially treated as a summons and a complaint.

11 And the Court then proceeds, under Rule 56 of the Federal Rules

12 of Civil Procedure, for a motion for summary judgment.

13 So where that leads us, your Honor is, on a motion for

14 summary judgment on a note, the test is very straightforward,

15 as set forth in that case and in many, many other cases, which

16 is simply the party suing on a note needs to establish the

17 absence of a genuine issue as to execution and a default. We

18 have got that in spades here by the admissions of the

19 defendants in their affidavits. They don't dispute they

20 borrowed the money, they don't dispute they are a party to the

21 indenture, they don't dispute that they have not paid the

22 indenture as required on the stated maturity date.

23 So that then brings us to, really, the second issue

24 and perhaps the more interesting and important one, which is

25 the objection that we're strangers. The essential argument



8

1 here is not that Suntech doesn't have an obligation to pay, it

2 is we're not sure we need to pay you, Mr. Plaintiff, here,

3 Trondheim, Mr. Meixler, and even Mr. Dugaw.

4 But what they do here is they take what is essentially

5 a very simple issue and make it complicated by referring to the

6 registration rights agreements and the various other documents

7 and the tranches and the numerous parties that play a role in

8 these transactions, these indentures.

9 However, the simple admissions are we have the note,

10 we have a nonpayment. But what they then do in their

11 opposition, is they assert there is only one Holder of this

12 $575 million indenture. And that Holder is CEDE & Co. A

13 nominee or affiliate of DTCC, Depository Trust Clearing

14 Company. And they allege that in their papers. And they

15 submit an affidavit and documents from Wilmington Trust, the

16 trustee under the indenture that says, yup, CEDE & Co. is the

17 only Holder. And they assert that that is dispositive of the

18 fact that we are strangers and we have no standing.

19 They miss the point by intentionally, I would submit,

20 failing to identify and cite relevant provisions of the

21 indenture, and the registration rights agreement. They are

22 very selective in the clauses that they pick.

23 Now, what they say here is, look, we have identified

24 CEDE & Co. as the Holder. And through DTCC and Mr. Hemsley, an

25 affidavit which is at ECF docket number 9, they submit a list



9

1 of so-called participants. Those are parties that are

2 registered, that are identified as Holders of securities.

3 Because part of the complexity -- and I'll acknowledge

4 this -- is my clients, and I believe Mr. Dugaw, I don't want to

5 speak for him, but I believe -- so hold these interests as

6 beneficial owners and so-called street name. They are sort of

7 the great unwashed in a lot of this. So I can appreciate the

8 initial inclination to say who are you and why are you here and

9 why are you bothering us for payment. But when you look at the

10 documents, there is a process that is contemplated therein that

11 provides for us to be here, and provides for all of us to

12 enforce our rights.

13 So the defendant here recognizes that there are

14 certain participants. And those participants include, First

15 Clearing, Merrill Lynch, TD Ameritrade with respect to Mr.

16 Dugaw. And they are identified on a schedule. And they're

17 participants who acknowledge, or acknowledge to hold

18 securities, the notes, in this indenture. And, again, that's

19 Mr. Hemsley's affidavit at ECF number 9.

20 So what do they do, your Honor. Well, what they do,

21 is they quote at pages three and four of their opposition from

22 Section 2.15 of the indenture to say that the depository

23 participants shall have no rights under the indenture with

24 respect to any global security, or under the securities. And

25 the depository may be treated by the company, the trustee, and



10

1 the securities agent, and any agent of the company --

2 THE COURT: Where are you reading from?

3 MR. TEITELBAUM: Section -- I apologize. It is

4 section 2.15.

5 THE COURT: I have that.

6 MR. TEITELBAUM: Second paragraph, Members.

7 THE COURT: All right.

8 MR. TEITELBAUM: Okay. Their quote, your Honor, stops

9 about midway through after the word procedures. And their

10 quote at pages three through four of their opposition actually

11 bolds some of the language, if you'll note.

12 THE COURT: After the words regular operating

13 procedures?

14 MR. TEITELBAUM: Correct. It bolds that. And there

15 is no ellipsis in their papers. They failed to go on and quote

16 the rest of that paragraph, which expressly provides that. And

17 I wouldn't burden the record that your Honor has it in front of

18 him, but it provides for a proxy procedure whereby other

19 parties can be recognized as the Holders.

20 Similarly, your Honor, they don't quote a little

21 further down that page at Section 2.15E, as in Edward, the

22 quote: That the Holder, capital H Holder, and we have

23 identified that already as CEDE & Co., may grant proxies and

24 otherwise authorize any person, including participants and

25 persons that may hold interests through participants to take



11

1 any action which a Holder is entitled to take under this

2 indenture. That paragraph doesn't even appear in their papers.

3 THE COURT: Where is that paragraph?

4 MR. TEITELBAUM: Paragraph E on page 14 of the

5 indenture, Section 2.15.

6 THE COURT: I've got it.

7 MR. TEITELBAUM: That paragraph, your Honor, together

8 with the definition of Holder as set forth in the registration

9 rights agreement, and the registration rights agreement, your

10 Honor, is also attached to their papers. But the definition of

11 Holder in that agreement is as follows: The company agrees with

12 the initial purchaser; one, for their benefit as initial

13 purchasers, and two --

14 THE COURT: Let me find where you are.

15 MR. TEITELBAUM: Registration rights agreement, your

16 Honor, page 1.

17 THE CLERK: What agreement is that?

18 MR. TEITELBAUM: I can hand it to the Court.

19 THE COURT: No, I would like to find it in the papers,

20 so I can reference it.

21 MR. TEITELBAUM: It is at the back of the indenture,

22 your Honor, in the -- it's at the end of the indenture. It is

23 an exhibit to the indenture.

24 THE COURT: Exhibit A?

25 MR. TEITELBAUM: It is, I believe, the first exhibit



12

1 after the indenture; yes.

2 THE COURT: And where are you reading in it?

3 MR. TEITELBAUM: It is dated -- just so we're on the

4 same document and there is no confusion -- it is dated

5 March 17, 2008, Registration Rights Agreement, third paragraph

6 on the first page.

7 THE COURT: Okay, just a second.

8 MR. TEITELBAUM: I have it here.

9 THE COURT: Yes.

10 MR. TEITELBAUM: Do you have it, your Honor?

11 THE COURT: Exhibit 4.5.

12 MR. TEITELBAUM: On that first page, your Honor, third

13 full paragraph. I don't -- I wouldn't burden the record with

14 reading the definition. It starts with, the company agrees.

15 THE COURT: Yes.

16 MR. TEITELBAUM: And it ends with as follows. There

17 is a definition of Holders. And the definition of Holders is

18 the initial purchasers. And for the benefit of the beneficial

19 owners, including the initial purchasers, from time to time, of

20 the covered securities. Each of the foregoing, a capital H

21 Holder. Again, nowhere in their papers, your Honor do they

22 make reference to this. They simply refer to the definition of

23 Holders in the indenture, which is limited to CD & Co., as the

24 only Holder on the Wilmington Trust registration documents.

25 Your Honor, the defendants then go on to cite a couple



13

1 of cases in their brief, Springwell and Macai for the

2 proposition that beneficial holders lack standing. Those are

3 two appellate division cases from the State of New York.

4 So the problems with the arguments that the defendants

5 have proposed to the Court here simply are by quoting only a

6 section or part of 2.15A, they have failed to advise the Court

7 of the remaining provisions relevant to the determination of

8 whether a beneficial Holder has standing, namely the carve-out

9 of Section 2.15A and Section 2.15E. They also fail to note in

10 Section 2.16C.

11 Your Honor, if you like, I will give the Court

12 obviously a second there to get to that.

13 THE COURT: Repeat the section?

14 MR. TEITELBAUM: 2.16, C, as in Charlie.

15 THE COURT: The one before that. You had two before

16 that.

17 MR. TEITELBAUM: We had Sections 2.15A, as in apple,

18 2.15, E, as in Edward. And then we have, now, 2.16C of the

19 indenture. And that appears, your Honor, on page 15 of the

20 indenture. And it's at the very bottom, the last paragraph.


22 MR. TEITELBAUM: And that paragraph, your Honor, it --

23 it is very simple, which is it just imposes an obligation by

24 the word shall. It says: The registrar, which we know is

25 Wilmington Trust, shall retain copies of all letters, notices,



14

1 and other written communications received pursuant to Section

2 2.15, or this Section 2.16.

3 So to the extent that there is a written notification

4 of a proxy provided to the company, they are required to make

5 note of that on the books and records of the company.

6 THE COURT: Who is they there?

7 MR. TEITELBAUM: The they in that case, your Honor, is

8 Wilmington Trust, which is the registrar as identified by the

9 defendants responsible for maintaining the record of, quote,

10 Holders.

11 So the third prong of the error of the arguments by

12 the defendants here, is there is the Second Circuit decision

13 which we've cited, the Applestein v. Buenos Aires case which,

14 on very, very similar facts, first Judge Griesa made a holding

15 in that case -- and then it was affirmed on appeal -- where a

16 bondholder, a beneficial bondholder, one of -- a client very

17 similar to mine -- commenced an action following the maturity

18 of the indenture. After the action was commenced, the

19 plaintiff obtained, from CD & Co., an acknowledgment, a proxy,

20 recognizing that party as a Holder, and authorizing that party

21 to prosecute the action to enforce the maturity of the note.

22 A lot of noise went back and forth between the parties

23 as to whether this was appropriate. And then Judge -- the

24 district court said the fact is that these beneficial owners

25 are entitled to sue. If there are some formalities that have



15

1 to be carried out, they can be easily carried out, and that's

2 that. That solves the issue of standing. And I'm quoting from

3 the Second Circuit decision which quoted the district court.

4 And this is the Applestein decision at 415 F.3d 242. The

5 Circuit then went on to hold specifically that the beneficial

6 owner who obtains a proxy, even after the commencement of the

7 action, has standing. No ifs, ands, or buts. The Court then

8 rejected the case relied upon by the defendants in their brief,

9 the Macai Shields case, which is the support for the cases that

10 the defendants have cited.

11 In other words, the defendants cited the Springwell

12 decision. Springwell, from the appellate division, which

13 itself relied upon the Macai decision. The Circuit rejected

14 the Macai decision on the basis that neither Springwell nor

15 Macai involved a plaintiff who had obtained a proxy. They were

16 just, quote: Beneficial Holders out there essentially unknown

17 to the company which had executed the indenture.

18 The Court distinguished them on the critical fact that

19 we have in our case, which is when you have the proxy, you have

20 got a Holder standing.

21 So, your Honor, in response to the objection, what my

22 clients did -- and I -- I'm not going to speak for Mr. Dugaw, I

23 can only speak to what the documents in the record reflect.

24 What my clients did, was they contacted their brokers, First

25 Clearing and Merrill Lynch, to identify participants, and



16

1 requested that they be identified as the Holders for purposes

2 of prosecuting the action.

3 I can't tell you, your Honor, how many hours we spent

4 on the phone going back and forth. And we identified this in

5 our reply papers. And we have said, look, we sent these

6 letters out, and we're just waiting for them to come back. And

7 the reply papers were timely filed on the 15th. We then spent

8 the better part of 45 days going back and forth with DTCC and

9 CEDE & Co. and, therefore, your Honor, in the submission we

10 made on August 28, we obtained the letters. And the letters

11 are could not be more clear.

12 First, your Honor, the request made to CEDE & Co., the

13 Holder, under the medallion stamp of Merrill Lynch and First

14 Clearing from my respective clients, specifically identified

15 the client, Trondheim Capital Partners and Mr. Meixler,

16 specifically identified the fact they hold 500,000 and 50,000

17 respectively of notes, specifically identified the fact that an

18 action was commenced and pending in this court, specifically

19 identified the fact that notes had matured and that they were

20 seeking status as a Holder to prosecute the actions.

21 We have two letters back to us from CEDE & Co. which

22 we have attached and are part of the record as ECF docket

23 number 14. And the letters are identical. And the critical

24 part of the letter is as follows, it is the third paragraph: In

25 accordance with instructions --



17

1 And, by the way, I apologize. The letter is addressed

2 to Suntech Power Holdings, so that they are advised who the

3 parties are that are being recognized as Holders. Each letter,

4 one for Trondheim, one for Mr. Meixler states: In accordance

5 with instructions received from Participants, on behalf of its

6 customer, we hereby recognize Michael Meixler as the Holder of

7 the notes under the indenture, and authorize Michael Meixler to

8 prosecute the Action. And enforce the payment terms of the

9 notes.

10 An identical letter is submitted for Trondheim.

11 I believe an identical letter has been submitted for

12 Dugaw, as well, as part of the papers which were filed with the

13 Court.

14 So, your Honor, the simple fact is that we fall under

15 Applestein here and the Second Circuit's ruling that, yes,

16 while a beneficial Holder may not be recognized by a party

17 under an indenture as a Holder initially, there are steps

18 contemplated in the registration agreement in the indenture and

19 in normal process of commercial transactions that allow this

20 party to be recognized.

21 We have jumped through the hoops. We have jumped

22 through the procedural hoops that have been demanded of us of

23 Suntech. We have properly commenced the action. And we stand

24 here, your Honor, as a Holder. And I have not -- respectfully,

25 your Honor, I have not seen a single defense to payment here.



18

1 So what we're arguing over, potentially, is do we have

2 standing. And under Applestein, there is no dispute that we

3 have standing.

4 Your Honor, what we have got is Suntech based in

5 China, a Cayman Islands company, came to New York in or about

6 2008, borrowed $575 million, promised to repay that on

7 March 15, 2013, failed to do so. For whatever reason, doesn't

8 matter. Failed to do so.

9 My clients submitted to Suntech, and to this Court,

10 not only the proxy letters, but the account statements that

11 demonstrate that they actually acquired these which, under

12 the -- it's I think it is ETEVOB, which we have cited in our

13 papers, as well. It's ETEVOB v. Argentina 471 F Supp.2d. 432.

14 In that case, the Southern District of New York held that

15 plaintiffs have adequately demonstrated through their account

16 statements that owned the beneficial interest of various dates

17 in 2003 and 2004. So we have submitted those account

18 statements.

19 Your Honor, to digress a half point, defendants said,

20 oh, my gosh, the account statements have redactions.

21 I have the original account statements if the Court

22 wants to see them. I am representing to the Court, as an

23 officer of the court, that the redactions were for transactions

24 that my clients did unrelated to this matter, and for

25 communications between them and their broker which have nothing



19

1 to do with this case. That was the reason for the redaction.

2 I got them via e-mail. There was also communication to me in

3 that e-mail, and I redacted out the attorney/client

4 communication.

5 I have the originals for an in-camera inspection, I

6 have nothing to hide on that. They have made a lot of noise

7 about that, it's a non-issue. The account statements reflect

8 the 500,000 the 50,000-dollar positions of the clients.

9 So, again, if the Court wants those, I'm happy to

10 provide them.

11 Your Honor, there is no material issue of fact in

12 dispute here. The money was borrowed. The money is owed. The

13 money has not been repaid. We're a Holder, your Honor. I

14 would request, respectfully, entry of judgment in favor of the

15 plaintiffs for the face amount, plus the allowed interest as

16 expressly provided for under the indenture through any date of

17 judgment as entered and, thereafter, the judgment rate of

18 interest from thereafter.

19 Your Honor, if you have any questions, I would be

20 happy to try to answer them, otherwise I'll cede the podium.

21 THE COURT: There is a different rate of interest in

22 the state courts and federal courts, and you're requesting the

23 federal court?

24 MR. TEITELBAUM: Yes, sir.




20

1 Mr. Dugaw, do you have any --

2 MR. DUGAW: Your Honor, as Mr. Trondheim mentioned,

3 the facts of my case are materially identical to what he just

4 laid out. I am in complete agreement with everything he just

5 stated as it pertains to my case. I'd simply replace, in the

6 case of Mr. Trondheim's clients, Merrill Lynch and First

7 Clearing with TD Ameritrade, and replace the amounts he

8 mentioned with $10,000 in my case. And then the facts are

9 identical.

10 The only additional nuance in my case versus Mr.

11 Trondheim's clients, is the defendants have asserted that me,

12 Marcus Dugaw, do not have standing to sue, because I haven't

13 demonstrated an interest in the notes based upon the fact that

14 they are held in a brokerage account at TD Ameritrade that's in

15 my wife, Jessica's, name. California is a domicile community

16 property state. The securities were acquired with community

17 property assets. Under community property in California, both

18 spouses have an equal interest in the management of all

19 community property throughout their marriage. Unlike in a

20 marital property state like New York, one spouse's interest in

21 the other spouse's marital property is only asserted at

22 dissolution of marriage. That is not the case in California.

23 I have laid out the relevant statutes in my reply

24 affidavit. California Family Code Sections 760 and 1100 spell

25 out the community property laws.



21

1 I have obtained a substantially identical document

2 from CD & Co. recognizing my wife, Jessica, as a Holder of the

3 securities and granting authority to sue based on the

4 nonpayment Mr. Trondheim already described.

5 Beyond that, if your Honor has any questions, I'm

6 happy to answer. But as I mentioned, the facts and

7 circumstances of my case are materially identical to that of

8 Mr. Trondheim's clients.

9 THE COURT: All right. Thank you.

10 Defense?

11 THE COURT: Are you still on the line?

12 MR. DUGAW: Yes, your Honor.

13 THE COURT: Okay.

14 MR. SAMBERG: Thank you, your Honor. Gilbert Samberg,

15 Mintz Levin for the defendant, Suntech Power Holdings.

16 If you'll forgive me, your Honor, my voice is a little

17 played out already this morning.

18 Gilbert Samberg from Mintz Levin on behalf of the

19 defendant, Suntech Power Holdings.

20 THE COURT: Yes.

21 MR. SAMBERG: Your Honor, if you don't mind, I'm not

22 going to rehash from the beginning all of the briefing that has

23 gone into this matter, it's all before you and your clerks for

24 your review.

25 I would like to focus on a couple of points, though,



22

1 that make it simply impossible for this Court to grant summary

2 judgment in lieu of complaint. Before Suntech has had an

3 opportunity to explore the case, and certainly before

4 discovery, in a federal court in New York. And I to have say.

5 I have to say that it is a mystery to me, as a lawyer,

6 as to why the plaintiffs would pursue their claims in what

7 amounts to -- and I think Mr. Teitelbaum has amply demonstrated

8 this to the Court -- what amounts to a complex securities

9 litigation, and to do so by way of a motion, a state law

10 process called a motion for summary judgment in lieu of a

11 complaint. And this creates enormous issues for the Court and

12 for the plaintiffs themselves, both evidentiary issues and

13 substantive issues. And I think at the end of today, we're

14 going to find out whether this defendant is going to be given

15 the opportunity to defend itself in this federal court in New

16 York.

17 Now, before I get into the details of why I say it

18 creates enormous, enormous difficulties, enormous issues of

19 various kinds that make summary judgment impossible at this

20 stage. I would like to digress for a moment in order to give

21 the Court some context regarding the bigger picture. If I may

22 take a moment to do that.

23 And in that regard, what I would like to do is just

24 for purposes of illustration, provide to Mr. Teitelbaum copies

25 of some news articles, recent news articles, that I would like



23

1 to hand up to the Court, as well, with your permission, your

2 Honor.


4 MR. TEITELBAUM: Your Honor, just for the record,

5 objection to whatever these newspaper articles are.

6 THE COURT: I understand. They are just news

7 articles.

8 MR. SAMBERG: So I would like to place these

9 particular claimants in context. And it is true that they

10 claim beneficial interest in connection with an issue of

11 convertible senior notes by Suntech Power Holdings in the

12 amount of $575 million. These claimants make claims with

13 regard to, respectively, $500,000 by the Trondheim company, and

14 I'll go into the details of who the Trondheim company is in a

15 moment; $50,000 by a Mr. Meixler; and $10,000 by Marcus Dugaw

16 and Jessica Dugaw. So you can see, it is a -- what you have

17 before the Court here today, is a very small minority position

18 making claims.

19 And I should point out that these claims are unique in

20 that out of $575 million worth of convertible senior notes that

21 were issued by Suntech, these are the only claims of this sort

22 that are asserted by purported investors in those notes.

23 Now, this update concerns what's happening elsewhere.

24 And I should point out that this $575 million is the largest

25 single debt, by far, that Suntech has. And, yes, it is true,



24

1 as your Honor knows, that Suntech did default on payment of

2 these notes earlier this year. And since that time, Suntech

3 has been negotiating vigorously with the investors in those

4 notes, the vast majority of those investors. And has seen some

5 fruit with regard to that.

6 Now, this is, for Suntech Power Holdings, essentially

7 a life-or-death sort of issue in the sense that if the

8 negotiations with these shareholders fail --

9 THE COURT: Where -- have you filed for bankruptcy?

10 MR. SAMBERG: Exactly. The company will file for

11 bankruptcy, and that will be the end of it --

12 THE COURT: Would you be in Chapter 11?

13 MR. SAMBERG: Actually the bankruptcy would take place

14 in the Cayman Islands, would be under a rather different --

15 THE COURT: They have not filed yet?

16 MR. SAMBERG: They have not filed yet, because they

17 are in the process of negotiations of very detailed sort with

18 their creditors. And, recently, the most recent results of

19 that is that the company and the principle creditors, which are

20 the purported investors in this 575 million-dollar issue of

21 convertible senior notes, have reached what they believe is the

22 basis for a restructuring framework agreement, which I

23 understand will be described imminently.

24 THE COURT: They are a different class than the people

25 that are the plaintiffs here.



25

1 MR. SAMBERG: No, they are exactly -- they purport to

2 be situated in precisely the same position as the claimants

3 here. And, consequently, the claimants here --

4 THE COURT: But the claimants here have not been

5 included in the conversations.

6 MR. SAMBERG: Well, not at all, your Honor. The

7 claimants have not been excluded from those conversations. And

8 in fact, your Honor --

9 THE COURT: Have they got notice of them?

10 MR. SAMBERG: Pardon me?

11 THE COURT: Have they had notice of them?

12 MR. SAMBERG: Yes, they have, your Honor.

13 THE COURT: What notice have they had?

14 MR. SAMBERG: Well, among other things, first, these

15 conversations have not been secret. They have been highly

16 publicized.

17 THE COURT: What do you mean highly publicized? The

18 Cayman Island corporation being highly publicized in this

19 country?

20 MR. SAMBERG: Yes. In this case, Suntech Holdings is

21 a New York Stock Exchange listed company. And it has made

22 ample disclosures and press releases with regard to the

23 progress of those discussions.

24 But, more importantly, your Honor, I myself have put

25 Mr. Teitelbaum in contact with representatives of -- with a



26

1 representative of that negotiating group. And as I understand

2 it, he was invited to participate in it if he chose to do so.

3 But, that's besides the point. I think the

4 opportunity has always been there. There has never been an

5 effort to exclude anyone who purported to be an investor in

6 these notes. And toward that end , I take it that the

7 representatives of the vast majority of these -- of the

8 purported investors in these notes are negotiating for their

9 own benefit and, as I understand it, a general outline of a

10 resolution of this matter, and a reorganization of the company,

11 with an exchange of debt for equity is in the works. And that

12 has been announced in the press, as well. This is in the

13 general press.

14 I think if you look, your Honor, the very first item

15 on that collection of documents that I provided to counsel and

16 to the Court is a Bloomberg Businessweek release. And

17 Bloomberg Businessweek has been publicizing the events as they

18 have transpired, either by way of publishing press releases, or

19 by way of reporting on it. And this is -- there is no secret

20 with regard to what is going on here. And, in fact, I think

21 that Mr. Teitelbaum would concede that these particular

22 claimants, in this instance, are racing out as quickly as they

23 can in an effort to I think, frankly, seek a preference

24 relative to all other creditors who are arguably similarly

25 situated.



27

1 Now, I mean one of the questions the Court ultimately

2 has to face, is should these purported -- and this is the

3 larger picture, as I said, your Honor. I'm not saying that

4 these are points that are legal matters which are directly

5 related to this particular procedure that these claimants have

6 invoked -- and I'll get to that in a moment. But, really, one

7 of the questions that is underlying this is should these

8 alleged investors be given a preference relevant to all others,

9 and does it make sense for them even to seek it, and would the

10 Court be doing them any benefit if it granted it to them.

11 Because if these negotiations collapsed, then the investors are

12 all going to suffer. And the company has made every effort to

13 optimize the result for the benefit of its creditors. And that

14 is why these negotiations are ongoing. And they involve

15 bringing in a fresh investment converting, as I understand it

16 from the press release, converting a debt to equity to find

17 some optimal result for all of these creditors similarly

18 situated.

19 Now, one other point that I would like to make before

20 addressing the details with regard to these particular

21 purported claimants is that I think Mr. Teitelbaum has agreed

22 and conceded that Suntech has issued these promissory notes.

23 And its obligation as a formal matter under these notes is to

24 one party, and one party only. That is, it's obligated to pay

25 the Holder, CD & Co. And if it is made to pay any other party,



28

1 then CD & Co. without getting a release from CD & Co. of a

2 comparable nature, or some evidence of an assignment of a claim

3 by CD & Co., then Suntech risks being put in a position of

4 having this obligation to CD & Co. and having an obligation to

5 some other party. And so far as I can tell in the papers that

6 have been submitted to the Court, I see nothing which

7 constitutes an assignment, or any waiver or partial release, by

8 CD & Co. And so in the back of Suntech's mind is this question

9 I think the Court must face as well, and must face it in the

10 context of this very peculiar procedural posture that the

11 plaintiffs in this case have invoked for reasons that, as I

12 said, are beyond me. Because CPLR Section 3213, which is a

13 motion that seeks summary judgment before there is any

14 discovery, whatsoever, any opportunity to review the bona fides

15 of papers, or to examine any parties whatsoever, must be based

16 on an instrument for payment of money only. That is typically

17 a promissory note from me to you that you can present to the

18 court, and that on its face prima facia, number one, you can

19 authenticate and, number two, represents an obligation from me

20 to you. And that's clearly not the case that we have here.

21 I wanted, also, to thank Mr. Teitelbaum for helping

22 demonstrate that -- when he cited the Weissman case, which is a

23 New York State Court of Appeals case. That the essence of this

24 procedure is something where there is no reference, no need for

25 reference to extrinsic evidence. This case, clearly, is one



29

1 which is based almost exclusively on extrinsic evidence.

2 THE COURT: What cases do you have to show that this

3 is any different than it's an obligation to pay that's

4 contained here. Since they have provided letters that show

5 that they have standing, I don't think you could contest. What

6 is it that you are relying on to say this is different from the

7 ordinary motion for summary judgment in lieu of complaint that

8 is filed all of the time in New York State court?

9 MR. SAMBERG: Well, your Honor, I -- perhaps I --

10 THE COURT: What authority do you have?

11 MR. SAMBERG: Well, your Honor, the legal authorities

12 are cited in our brief, but I think I can better illustrate --

13 THE COURT: What ones are you referring to?

14 MR. SAMBERG: I'll defer to my colleague, Mr. Barres,

15 in a moment.

16 But if I can -- if I can go on for a moment, and then

17 come back to providing those legal authorities, I will do so.

18 I wanted to -- what I wanted to do is to point out by

19 illustration why this case is not amenable to summary judgment

20 in lieu of a complaint before any discovery.

21 THE COURT: That's why I'm asking you for your

22 authority.


24 THE COURT: That's why I'm asking you for your legal

25 authority.



30

1 MR. SAMBERG: Yes. And I will provide that in a

2 moment, your Honor, but --

3 If your Honor will permit me that moment.

4 While -- while I am -- while my colleague is finding

5 that legal authority in our, in our brief, if I may just point

6 out by illustration why that rule with regard to CPLR 3213

7 procedure regarding the mandatory denial of a motion when the

8 claimant has to resort to extrinsic authority, why that rule

9 applies so very much in a case like this. Because if you look

10 at the extrinsic evidence -- and I will do so in detail for the

11 benefit of your Honor in a moment.

12 But if you look at the extrinsic evidence that is

13 presented by each of the plaintiffs in this case, each and

14 every bit of that extrinsic evidence suffers, either because it

15 is unauthenticated, it consists entirely of hearsay, or it

16 creates its own issues with regard to substantive matters in

17 this case. And I am prepared, and I will in a moment, go

18 through the individual documents on which these plaintiffs rely

19 to point out specifically how none of these documents become

20 admissible at this stage without further examination. That is

21 the problem that is created by resort to extrinsic evidence.

22 And that is what these parties have done without necessarily

23 establishing the foundation, either for the authenticity of

24 many of these documents, or with regard to the hearsay elements

25 of these documents, or addressing the many questions,



31

1 substantive questions, with regard to -- that are created by

2 these documents, not the least of which is who actually owns

3 the investment that they purport to claim. And I will go

4 through that, in detail, in a moment.

5 Clearly, your Honor is aware that with regard to any

6 motion for summary judgment, the defendant is going to get the

7 benefit of all doubts, all inferences, et cetera. And there

8 are substantial evidentiary issues that have been created. And

9 the documents, if they were ever made admissible, as I say,

10 create material issues of fact that I will describe in detail.

11 And I put it to your Honor, in the end, that Suntech deserves

12 an opportunity to take discovery before a summary judgment

13 motion is heard.

14 Now, to begin with, I would point out that with regard

15 to points regarding ownership, title, et cetera, even to the

16 claimed beneficial ownership --

17 THE COURT: I am having trouble with this whole

18 argument, Mr. Samberg. You came in here, and you handed me up

19 these news articles. These news articles are dated after this

20 case had been fully submitted to the Court.

21 In the meantime, these people brought this action in

22 early May or June, and no word from anyone from, as I

23 understand it, from anyone at Suntech. At all. They

24 completely disregarded them if they had any negotiations going

25 on. They have known of this action, obviously, because you



32

1 have appeared in the action. You must have been retained for

2 that purpose. And, now, you are talking about discovery when

3 it is perfectly clear that, yes, they do contain hearsay, it's

4 true. But, they are not -- no one is going to seriously

5 dispute the fact that those letters are genuine. And so now

6 you've asked for discovery --

7 MR. SAMBERG: Your Honor, may I --

8 THE COURT: The alternative would be to have someone

9 just give an affidavit from CD & Co., and maybe Merrill Lynch,

10 something like that, to attach to the documents. And, as you

11 say, give the assignment. But the money is due and owing. And

12 I don't see why I should engage in you having lengthy

13 discovery. If you want to have discovery, then do it in a

14 week.

15 MR. SAMBERG: Your Honor, if --

16 THE COURT: And, then, in that week, you can have your

17 discovery, talk to CEDE & Co. and talk to whoever else as to

18 whether the documents are authentic. And we'll have -- you can

19 file something with the Court after that time. But why not go

20 right ahead with this thing. You are just asking -- what

21 you're actually doing is trying to put them off while a deal is

22 made by the major creditors.

23 MR. SAMBERG: Your Honor --

24 THE COURT: And they make the deal, they get what they

25 want, but where do these people stand?



33

1 MR. SAMBERG: Well, the -- the creditors who are in

2 negotiations with Suntech stand for -- stand to make an

3 arrangement that benefits all creditors. It is not for

4 individual creditors. And these creditors were never excluded,

5 they were always welcome to join in that negotiation. However,

6 because -- I would point out to your Honor --

7 THE COURT: There is no showing there is any

8 negotiation before August 30th in these papers. August 30th is

9 after this action had been brought and fully briefed.

10 MR. SAMBERG: Yes, your Honor. It's true that these

11 papers are -- relate to most recent developments in connection

12 with those negotiations. But, Mr. Teitelbaum is aware, and I

13 believe Mr. Dugaw is aware, that these negotiations have been

14 going on for -- since probably the beginning of the year or

15 before then, that they have been publicized amply, and that

16 they were never excluded. In fact, in the case --

17 THE COURT: Well, the --

18 MR. SAMBERG: -- as I mentioned with regard to

19 Mr. Teitelbaum, I introduced him to a representative of that

20 group, if he chose to join in that discussion, on behalf of his

21 clients. And with regard to Mr. Dugaw, I made him aware and

22 asked him if he wished to be contacted by a member of that

23 group. It has never been -- it has never been a question of

24 exclusion.

25 But, your Honor, if I may go on --



34

1 THE COURT: Yes, you can. But then we get into this

2 issue. And that is, of course if I grant the motion, they

3 would have judgments and they would stand in a different

4 position than the other creditors.

5 MR. SAMBERG: Yes, your Honor.

6 May I go on to --

7 THE COURT: Yes, you may.

8 MR. SAMBERG: -- discuss individual documents?

9 Let me -- let me take them in order, beginning with

10 the question of the claim by Trondheim Capital Partners.

11 The claim by Trondheim Capital Partners, a limited

12 partnership, is supported by a declaration, an affidavit of a

13 gentleman by the name of Colin Peterson who indicates that he

14 is the managing director of another company, Trondheim Capital.

15 A manager. And we don't know whether he is a legally

16 authorized representative of Trondheim Capital Partners, a

17 limited partner. And he -- I do not believe that he identifies

18 who the general partner is. And the general partner would

19 normally be the person who would represent the company.

20 In this case, as evidence of the claim by the company,

21 the plaintiff, Trondheim Capital Partners Limited Partnership,

22 Mr. Peterson submits as exhibit A in -- currently submitted on

23 August 15, a number of pages. They are heavily redacted. And

24 some of them do not identify what they are.

25 On the first page in those documents, which is --



35

1 THE COURT: I don't see where you are.

2 MR. SAMBERG: -- identified page 8 of 49, in

3 the affidavit of Colin Peterson, which was filed August 15,

4 2013. So, directing the Court's attention to page 8 of 49,

5 which is inscribed on the top of the page.

6 If I may assist the Court.

7 MR. TEITELBAUM: It would be in the reply.

8 THE COURT: This is August 14th. All right, I go to

9 exhibit A. Yes.

10 MR. SAMBERG: Your Honor, may I approach to assist the

11 Court?

12 THE COURT: Yes.

13 MR. SAMBERG: Thank you. I think you have the page in

14 front of you, your Honor.

15 Now, your Honor, this document that you have in front

16 of you purports to be the principle document evidencing an

17 investment interest by the company called Trondheim Capital

18 Partners.

19 Now, the Court will notice that this is not an account

20 statement. We have no idea what this document is, nor do we

21 know who prepared it. And it is not identified further.

22 Beyond that, the following 13 pages are heavily

23 redacted documents which, of various providences, which

24 indicate that a trader by the name of Colin Peterson at

25 Trondheim submitted, appears to have submitted an order, does



36

1 not identify for whose account. And, also, lists a person by

2 the name of Keden Wright, a place called Carolina Capital,

3 without identifying who or what that is. If one trolls through

4 the 13 pages, they are all of a similar nature. None of them

5 are account statements, none of them indicate the party for

6 whom trades were made, none of these --

7 THE COURT: Carolina Capital is identified on the

8 cover page as the broker.

9 MR. SAMBERG: The -- again, your Honor, that first

10 page is unidentified as to the nature of the document and who

11 prepared it. But, I would point out that none of these

12 documents constitutes an account statement indicating a current

13 ownership of any interest, whatsoever, by a company by the name

14 of Trondheim Capital Partners. In a note issued by -- in an

15 account relevant to a note issued by Suntech Power Holdings,

16 there is no evidence, even if these documents had been

17 authenticated, even if they were not hearsay, and even if they

18 had been proper documents indicating an interest by Trondheim

19 Capital, they would not be satisfactory for purposes of a

20 summary judgment motion in lieu of a complaint before any

21 discovery whatsoever.

22 Your Honor, unless your Honor has any questions with

23 regard to that, I would like to address papers submitted on

24 behalf of Mr. Meixler next.

25 THE COURT: My question is aren't these just support



37

1 documents that --

2 MR. SAMBERG: They are.

3 THE COURT: -- have the date of the acquiring of the

4 issues, and are explained by the affidavit?

5 MR. SAMBERG: Your Honor, none of this -- none of this

6 is documentation which is admissible. But if it had been

7 admissible, none of it would prove that the company, as I

8 mentioned, Trondheim Capital Partners, has a current holding of

9 a beneficial interest via an account at any particular company,

10 at all. And so on that basis, I would suggest, even if we

11 didn't look beyond these documents, that it would be impossible

12 to grant summary judgment in lieu of complaint to Trondheim

13 Capital Partners, L P.

14 With regard to Mr. Meixler, if I may if I may go on?

15 THE COURT: You have the sworn statement of

16 Mr. Peterson that he is a managing director of Trondheim

17 Capital, the general partner of Capital Partners LP, and that

18 Trondheim is the owner of beneficial interests of approximately

19 $500,000 total amount standing, of the 3 percent convertible

20 senior notes through March 15, 2013.

21 It's an affidavit that he owns the property, or that

22 his, Trondheim Capital Partners, LP owns the property. And

23 it's verified by the broker, as I understand it and by CEDE &

24 CO.'s letters.

25 MR. SAMBERG: Well, your Honor, in fact, it is not



38

1 verified by any broker, no broker put in any affidavit

2 whatsoever. Mr. Peterson's position as an advisor to Trondheim

3 Capital Partners is one off. He is not a general partner. He

4 does not purport to be anything other than an investment

5 advisor. There is no brokerage account that indicates the

6 current holdings of that company.

7 THE COURT: He is the managing director of Trondheim

8 Capital, LLC --

9 MR. SAMBERG: That is a different company, your Honor.

10 THE COURT: -- which manages -- which manages

11 Trondheim Capital Partners, LP.

12 MR. SAMBERG: Yes, your Honor. Trondheim Capital, LLC

13 is a distinct company which serves as an investment advisor or

14 manager of this other company. But, that means that they are

15 employed for that purpose. That does not mean that they are a

16 general partner, or another -- or a representative of that

17 company.

18 And, in any event, as an investment manager, I'm not

19 sure if he could vouch for the authenticity of documents that

20 are provided by another partner. And that -- and those

21 documents themselves are not self-authenticating, and they do

22 not indicate what they are. Or who prepared them. So we do

23 not know who prepared that first page with regard to the

24 summary that you observed at the very outset of our discussion

25 here. Nor do we have anything that indicates a brokerage



39

1 account indicating a current holding of a beneficial interest

2 in any note issued by Suntech.

3 The evidence simply is not there. And, it would be, I

4 propose, a bit of a travesty if Suntech were not given at least

5 some opportunity to examine the situation, take discovery.

6 Otherwise, as I mentioned earlier, it is being put at risk of

7 paying the wrong people. We -- if we're -- if Suntech is made

8 to pay at all, in these circumstances. Nor do we know whether

9 Trondheim Capital Partners, itself, is holding some interest of

10 any kind for the benefit of other parties, its investors in

11 Trondheim Capital Partners. We do not know if this is the

12 proper party, or whether it's a representative party. And we

13 would like the opportunity to take discovery with regard to

14 that, simply to establish that, your Honor.

15 By the same token if I may go on to Mr. Meixler.

16 Later in the same document, fortunately, without -- without

17 reference to anything further, there is an exhibit which

18 contains all of the -- all of the evidence propounded by

19 Mr. Meixler.

20 And if I may approach to the bench to assist you in

21 finding the document that I'm --

22 THE COURT: It's all right, I have the documents in

23 front of me. Mr. Meixler's affidavit in reply. What page is

24 that?

25 MR. SAMBERG: What I'm referring to here, simply for



40

1 convenience, is in the same affidavit. There is -- there is a

2 set of papers which is identical to what Mr. Meixler submitted

3 a reply. And I am looking at page 23 of 49 of those papers.

4 If you look at the upper right-hand corner, you will see an

5 identification of the page number.

6 THE COURT: Okay.

7 MR. SAMBERG: Do you have that?

8 THE COURT: Yes, thank you. Now when you say ECF

9 number?

10 MR. SAMBERG: Yes.

11 THE COURT: Or --

12 MR. SAMBERG: Yes, it's --

13 THE COURT: Got it.

14 MR. SAMBERG: Okay, thank you, your Honor.

15 Now, if we can examine these pages as well.

16 First, what we have is what purports to be an account

17 statement issued by Meixler Investment Management. It turns

18 out that Mr. Meixler is not, apparently, an investor, but he is

19 an investment advisor. The account statement is dated in

20 March. It is not current. It was made long before the claim

21 was made, I believe, in June. So, it would have been more apt

22 for an account statement to have been made in June.

23 The problem is two things. Number one, Mr. Meixler

24 makes a claim on on the basis of an alleged investment of

25 approximately $50,000 in the in the Suntech notes. This



41

1 statement indicates that investments totaling $40,000 were

2 made. It does not indicate whose account, it does not indicate

3 who Mr. Meixler, as an investment advisor, was buying for. We

4 do not know whether Mr. Meixler is the actual owner of

5 anything, whatsoever. And we do not know whether the proper

6 parties are others who may have claims.

7 The pages that follow are just puzzling. They are

8 just entirely puzzling. These are various confirmations issued

9 by Meixler Investment Management. Several of them are highly

10 redacted. The very first one involves -- purports to be a --

11 THE COURT: What page are you on?

12 MR. SAMBERG: This is page 24 of 49, the very next

13 page.


15 MR. SAMBERG: Looking to the upper right-hand corner

16 of the text, there you will see an account number which is

17 redacted. And then the reference, Your Financial Advisor,

18 Michael Meixler. So this is obviously Mr. Meixler, acting an

19 investment advisor, is buying for somebody else's account. But

20 Mr. Meixler does not appear to be the Holder of an interest at

21 all. This very first page indicates a purchase, as a whole, of

22 $50,000 worth of Suntech notes, which is entirely inconsistent

23 with the prior page, which is indicates a purchase of a total

24 of $40,000 worth of Suntech notes in four tranches. This is

25 dated at the end of May, a trade date at the end of May. The



42

1 suit was brought on June 11. It's entirely inconsistent with

2 the preceding -- the documents that preceded, and the documents

3 that succeeded.

4 The following several pages, running from page 25 of

5 49, through page 29 of 49, are heavily redacted documents of a

6 similar nature issued by Meixler Investment Management

7 indicating a redacted account number, but indicating that it is

8 information provided by, quote, Your Financial Advisor, Michael

9 Meixler. To whom, we do not know.

10 The very first of those pages, page 25 of 49, is an

11 indication of how complex the situation is that Mr. Meixler is

12 setting you up for whoever his clients are. There are two

13 trades that are described. This one is a put of Suntech Power

14 Holdings, something. It doesn't indicate exactly what. And a

15 number of puts totaling what looks like 300 puts, followed by a

16 purchase of what looks like $20,000 in notes at a very deep

17 discount. And this sort of thing appears on the next pages.

18 Again, heavily redacted documents, without indicating for whose

19 benefit these trades are made. A very complex set of trades,

20 of puts, and long positions. And all of the documents

21 submitted by Mr. Meixler are, how shall I put this.

22 Number one, internally inconsistent; number two,

23 unauthenticated; and, just lead to enormous questions with

24 regard to what in the world is going on here, and who is the

25 actual beneficial Holder of the purported claim.



43

1 If I may go on, your Honor, to --

2 THE COURT: I'm not sure that I -- I see what you're

3 argument is. But I have got the fact that the account number,

4 2306, is mentioned. And, Your Financial Advisor, Michael

5 Meixler, is listed up in the upper right-hand corner, does not

6 mean that the he didn't buy it on his own account, which

7 normally is the address that you see on the left-hand side of

8 an account statement in brokerage account. So that you're

9 assuming --

10 MR. SAMBERG: No, I --

11 THE COURT: -- that he is purchasing for others. And

12 you may have a right to do that, I don't suggest that. But it

13 is an assumption on your part. And I don't know whether I have

14 to look at the other documents to see whether he said that

15 these purchases were in his own account.

16 MR. SAMBERG: I think there are conjectures of a

17 various kind that can be made. And part of the submission of

18 these documents asks us to make certain assumptions. Now, in a

19 situation like this, if there is any doubt, it has to be

20 resolved in favor of Suntech, I think we can all agree.

21 In addition, there is a stark obvious point that there

22 is an internal inconsistency among all of these documents.

23 They do not add up.

24 Your Honor, if I may also go on to the situation with

25 regard to the Dugaws.



44

1 THE COURT: Let me see where he says -- I don't have

2 his original affidavit of June 10th. He says: As stated in my

3 original affidavit, I am the owner of beneficial interests of

4 approximately $50,000 in total --

5 So you have an affidavit that he is the actual owner.

6 MR. SAMBERG: Well, your Honor, without having --

7 THE COURT: You don't have any basis for your

8 conjecture that he purchased for other people.

9 MR. SAMBERG: I believe there is doubt that is raised

10 by the documents themselves. And since we have not had an

11 opportunity to question Mr. Meixler, the question is --

12 THE COURT: The question is whether you are grasping

13 at straws.

14 MR. SAMBERG: Well, your Honor, these are very real

15 questions at the moment in terms of whether Suntech is gonna be

16 put in an untenable position, and that these issues can be

17 resolved very --

18 THE COURT: They are in an untenable position right

19 now. They have been in an untenable position since March.

20 MR. SAMBERG: Your Honor is correct, that Suntech is

21 in a very --

22 THE COURT: We're talking 6 months.

23 MR. SAMBERG: -- is in a very difficult commercial

24 position. I cannot disagree with you with regard to that.

25 However, what I am suggesting to your Honor is that a



45

1 discrete, reasonable period of discovery would help us to

2 resolve all of the issues that I have mentioned. And the

3 additional issues, that I will point out in a moment with

4 regard to the Dugaws, as well as others, that, you know, I -- I

5 will not take the Court's time right now. But I -- suffice it

6 to say that there is a remedy for this. It is in the normal

7 proceedings, procedures of this Court that if the Court is

8 going to permit a motion for summary judgment, it would at

9 least give the defendant an opportunity to make a fair

10 examination of what the record is that is submitted by the

11 plaintiff since there undoubtedly are issues that are

12 unresolved, and there are ambiguities that are unresolved. And

13 in the instance of a motion for summary judgment of any sort,

14 and certainly a motion for summary judgment in lieu of

15 complaint, all of those issues, any ambiguities, any doubts,

16 must be resolved for the benefit of the defendant. And that is

17 the rule of fairness in this court. That's what this court

18 stands for.

19 If I may go on with regard to the Dugaws' situation,

20 which is even more complex, your Honor.

21 With regard to the Dugaws situation, we have the

22 foundation issue of the status of Marcus Dugaw, who is a

23 plaintiff in this case. There is no evidence submitted,

24 whatsoever, that he is a Holder of anything. Mr. Dugaw asks us

25 to accept California law regarding the rights of spouses



46

1 relative to each other in the event of divorce. That is his

2 claim, that under California Domestic Law, he has an inchoate

3 right against his spouse that would give him an interest in the

4 event of divorce with regard to his spouse's alleged claim

5 here. But, that says nothing about his rights with regard to

6 Suntech.

7 The status of Mr. Dugaw as a claimant is greatly in

8 doubt. And we should have discovery with regard to that.

9 There is a question as to whether he has standing at all.

10 THE COURT: We are all aware of what the California

11 law is. I'm aware of what it is. And you're aware of what it

12 is. Really.

13 MR. SAMBERG: It's not a question -- I don't question

14 what the law is. I believe that that law has no applicability

15 here as to whether Mr. Dugaw has any standing, whatsoever,

16 because there is nothing that indicates that he holds any --

17 THE COURT: He and his wife are the plaintiffs, are

18 they not?

19 MR. SAMBERG: He and his wife are plaintiffs; yes,

20 both he and his wife.

21 THE COURT: And they are the ones that hold the

22 securities.

23 MR. SAMBERG: Your Honor, there is no document that

24 indicates that they own anything. There is a document that

25 they submitted that Mrs. Dugaw has an account of interest with



47

1 regard to something. And I will get to that in a moment. But

2 nothing with regard to whether Marcus Dugaw, himself, has any

3 ownership interest.

4 THE COURT: But under the law, there is communal

5 property in California. We are all aware of that.

6 MR. SAMBERG: That may be, but that -- that does not

7 affect Mr. Dugaw's rights relative to Suntech. That affects

8 his rights relative to his wife.

9 THE COURT: If it is in his wife's name, then he has

10 an interest in it.

11 MR. SAMBERG: That would be an inchoate interest, I

12 believe, your Honor, in the event of a divorce, when he could

13 exercise that right.

14 But, your Honor, with regard to law, I would welcome

15 the opportunity to brief that very point to the Court, because

16 I believe it is one which affects whether Mr. Dugaw has any

17 standing here at all.

18 And since there is a question with regard to that, I

19 would ask for the opportunity to brief it so that we can be

20 clear on it. Because Mr. Dugaw, remember, I mean he submitted

21 something with regard to this only in his reply. He never said

22 anything before this. We have not had an opportunity to

23 address that point.

24 I should also point out that while Mr. Dugaw purports

25 to represent Mrs. Dugaw in this proceeding, if Mr. Dugaw --



48

1 obviously, Mr. Dugaw is not a lawyer and is appearing pro se --

2 THE COURT: I don't know that he is a lawyer.

3 MR. SAMBERG: Mr. Dugaw can verify that he is not a

4 lawyer.

5 THE COURT: No, I don't think he is a lawyer.

6 MR. SAMBERG: Yeah.

7 Mr. Dugaw, are you there? Can you verify that you are

8 not a lawyer.

9 MR. DUGAW: I am not an attorney.

10 THE COURT: But you are married to Mrs. Dugaw, is that

11 right?

12 MR. DUGAW: I am married to Mrs. Dugaw. She is here

13 and available if the Court would like to speak with her.

14 MR. SAMBERG: Thank you, Mr. Dugaw.


16 MR. SAMBERG: With regard to the purported evidence on

17 behalf of Mrs. Dugaw's alleged interest.

18 Now, Marcus Dugaw submitted, and purported to

19 authenticate what amounts to -- and I will go through this in

20 detail in a moment -- a heavily-redacted slice of a June 2013

21 account statement identifying Jessica Dugaw as the

22 account holder. And that is Marcus Dugaw affidavit one, his

23 very first affidavit, exhibit 3.

24 Subsequently, he, Mr. Marcus Dugaw --

25 THE COURT: This is not the one in reply.



49

1 MR. SAMBERG: No. That was the very first -- the very

2 first affidavit submitted by Mr. Dugaw. That would be

3 exhibit 3 to Mr. Dugaw's first affidavit. And, then, in the

4 reply, he purported to authenticate a redacted trade

5 confirmation from September 2012.

6 Now, clearly, Mr. Dugaw is not the account party, not

7 a recipient, not an addressee of any of these documents. And

8 is not in a position to authenticate them. And the documents,

9 themselves, are hearsay. And, in fact, Marcus Dugaw's

10 affidavits, to the extent that he is not -- if he does not have

11 standing, and we maintain that he does not. His affidavits are

12 hearsay. And we would like to question Jessica Dugaw with

13 regard to those documents.

14 Now, if I may address the documents themselves.

15 Working backwards, certainly the second document submitted,

16 which is a confirmation notice --

17 THE COURT: Could you give me a page number?

18 MR. SAMBERG: I'm sorry, your Honor. This is in

19 connection with the affidavit of Marcus Dugaw, the second one.

20 THE COURT: Filed August 12?

21 MR. SAMBERG: It looks like the document date is

22 approximately September 3 or 4. I do not have the filing date

23 handy.

24 THE COURT: I'm looking at the ECF number. There is

25 another one dated September 3.



50

1 MR. SAMBERG: I believe it would be that one, I

2 believe.

3 THE COURT: September 3.

4 MR. SAMBERG: Yes, I believe it would be that one.

5 THE COURT: I have got that one.

6 MR. SAMBERG: Exhibit B. I just point out that

7 exhibit B is a confirmation notice dated September 27, 2012.

8 So it does not purport to be a current account statement. And

9 we do not know what the current -- this does not indicate what

10 the current account status is of Jessica Davidson Dugaw, nor is

11 the document authenticated.

12 THE COURT: Let me look at exhibit B. This is in the

13 Ameritrade document sent to -- confirmation notice sent to

14 Jessica Davidson Dugaw.

15 MR. SAMBERG: Yes, your Honor. It is just a

16 confirmation notice. It is sent to Jessica Davidson Dugaw. It

17 requires authentication by someone. I submit that Marcus Dugaw

18 is not in a position to authenticate this document. And if it

19 were authenticated, it is just a confirmation note with regard

20 to a purported trade on September 24, 2012. It is not a

21 current account statement.

22 The earlier document that, to which I referred, is an

23 account statement.

24 THE COURT: Let me just see whether it is.

25 It is a confirmation. So it just says the date that



51

1 it was purchased. And 10,000 of Suntech Power Holdings

2 Company, senior, convertible, 3 percent due, 3/15/2013. Seems

3 pretty clear to me.

4 MR. SAMBERG: Yes, your Honor. It is -- the document

5 itself is clear as to what it purports to be. And it purports

6 to be nothing more than a confirmation notice regarding a trade

7 that was made a year ago. Approximately. It does not purport

8 to indicate what holding Jessica Davidson Dugaw currently has,

9 or had, at the time that she commenced suit, which could have

10 been entirely different.

11 And so there is no evidence of that presented here.

12 In addition, I -- as I said earlier, I submit that Marcus Dugaw

13 is not in a position to authenticate this document. I do not

14 deny that the authentication of this document would not be a

15 difficult matter. It's something that we would like to see

16 done, rather than have to worry about whether the document is

17 authentic --

18 THE COURT: You know, I knew Mr. Mintz.


20 THE COURT: I knew Mr. Mintz. And he was a man of

21 high character. I don't think he would engage in this kind of

22 a -- of a defense.

23 MR. SAMBERG: Well, your Honor, I -- I hope that

24 Mr. Mintz --

25 THE COURT: I really don't think he would be asking



52

1 for these authentications, when you have letters dated in

2 August, CEDE & CO. to Ameritrade, and copy to you --

3 MR. SAMBERG: Your Honor, I -- if I may, I would like

4 to --

5 THE COURT: -- and, you know --

6 MR. SAMBERG: -- address those letters.

7 THE COURT: -- all providing you with the information.

8 And, Ameritrade --

9 MR. SAMBERG: Your Honor, if I may. On the one hand,

10 I would say I would hope that Mr. Mintz, Richard Mintz, his

11 father, any of them, would have made a full and vigorous

12 defense of his client, as I am --

13 THE COURT: He would, but --

14 MR. SAMBERG: -- endeavoring to do for mine.

15 THE COURT: -- but this is what lawyers get a bad

16 reputation for.

17 MR. SAMBERG: Your Honor, the question I guess is,

18 with regard to these procedural questions, all of which I

19 submit create issues that are unresolved, and in the context of

20 a rush to the courthouse seeking summary judgment in lieu of

21 complaint, are premature, and that they can all be addressed in

22 the normal course of even limited discovery. And that's what

23 we're asking for, is an opportunity.

24 THE COURT: You have had an opportunity, when you got

25 copies of these things, to ask for whatever you wanted.



53

1 MR. SAMBERG: No. In fact, your Honor, we did not.

2 There was no period of discovery. This was a motion for

3 summary --

4 THE COURT: I didn't say it was a -- you were cc'd on

5 the letter. You could have asked for anything further that you

6 needed.

7 MR. SAMBERG: And by that -- by that letter, you're

8 talking -- your Honor is referring to a letter to Suntech, I

9 take it, your Honor?

10 THE COURT: Well, they have --

11 MR. SAMBERG: Is that what your Honor is referring to?

12 THE COURT: They have a letter from the Depository

13 Trust Company in connection with these shares. And from

14 Ameritrade to the Depository Trust Company, dated August 23rd.

15 And then a letter from CEDE & Co., dated August 20 to Suntech

16 and cc'd to you, and cc'd to Ameritrade. Now you're coming in

17 here, it's September 12, and saying, oh, we need time to have

18 discovery here. If you needed anything else, you could have

19 inquired then.

20 MR. SAMBERG: Well, your Honor, I think it's fair to

21 say --

22 THE COURT: You had these papers.

23 MR. SAMBERG: Your Honor, these papers were filed on

24 August 28th. And it's fair to say that, yes, we are here

25 asking for an opportunity for discovery, for a period of



54

1 discovery. And I submit to the Court that in the

2 circumstances, I don't think there is a question but that it is

3 premature to grant summary judgment in lieu of complaint. And

4 that Suntech, yes, has not had an opportunity for discovery or

5 a fair opportunity to examine the papers. And that the papers

6 are ambiguous, all of them. And that there are substantial

7 issues of an evidentiary nature but, more importantly,

8 substantial issues of a substantive nature. That the standing

9 of Marcus Dugaw is entirely in question. And that the rights

10 of the respective parties who are before you today having

11 brought this in a form which is unknown in federal court, but

12 is a construct of state court in New York that is unique, and

13 have brought it with regard to claims that do not fit that sort

14 of procedure, yes, in this circumstance, your Honor, I think it

15 is fair to give this defendant, as you would give any

16 defendant, an opportunity to defend itself, and to resolve

17 those issues. And, yes, this defendant has not had an

18 opportunity to do that.

19 The letters, themselves, if your Honor cared to hear,

20 the letters themselves are internally questionable. But,

21 again, all of these points, all of these questions can be

22 resolved if we simply follow the normal course in federal court

23 towards resolution of the claims that these plaintiffs have

24 brought.

25 THE COURT: Well, I mean this letter from Ameritrade



55

1 goes to Depository Trust. And he wants to get confirmation, as

2 I understand it, with respect to the 10,000-dollar face amount.

3 What have I got, the Dugaw? I have the Dugaw. Yeah,

4 I have the Dugaw one.

5 MR. SAMBERG: And your Honor will see that these

6 documents were submitted a few days ago, in September.

7 THE COURT: August 23rd, the letter is dated.

8 MR. SAMBERG: They were filed.

9 THE COURT: He, as I understand it, has an account

10 with Ameritrade. Ameritrade then writes to the Depository

11 Trust Company asking them to have its nominee, CEDE & Co.

12 confirm the position with respect to $10,000 face amount of the

13 above-referenced security credited to our DTC participant

14 account on the date hereof, in addition to acknowledging this

15 request is subject to the indemnification provided for in DTC

16 Rule 6. The undersigned certifies to DTC that the information

17 in fact set forth are true and correct. Notes credited to our

18 DTC participant account are beneficially owned by our customer,

19 Jessica Dugaw.

20 MR. SAMBERG: Now, these, as I said, these documents

21 were filed a few days ago in early September. That document

22 that you read from is not authenticated. The following

23 document from CEDE & Co. is in draft. But let's assume that

24 eventually it gets -- it is signed. And it reads that, on the

25 basis of what DTC is informed, it says, DTC is informed by the



56

1 participant. And then it describes certain things that it

2 received as information. And then it goes on to say that DTC

3 is informed of other things, as well. And on the basis of

4 those informations, DTC purports to assign a letter here, or at

5 least this document purports to be a correspondence from CEDE &

6 Co. All well and good. All well and good. Except, that there

7 is no foundation for the admission of any of these documents.

8 And there is some question as to what was the document you

9 referred to at the beginning of your description a moment ago.

10 You referred to a request that would have been made by Mr.

11 Dugaw, perhaps, or Mrs. Dugaw -- we don't know whom -- to

12 Ameritrade. We do not have that. So we do not know what these

13 letters are responding to.

14 THE COURT: You know what they say. And what they

15 said was Depository Trust Company, and you knowed that CEDE

16 &CO. as nominee of Depository Trust Company confirmed those

17 things to Suntech Power Holdings Company. And, you got a copy.

18 MR. SAMBERG: Your Honor, I received a copy -- pardon

19 me, I'm sorry, your Honor.

20 THE COURT: You got a copy.

21 MR. SAMBERG: If your Honor is -- I'm sorry, I may

22 have interrupted you, sir.

23 THE COURT: No, that's all right, I mean --

24 MR. SAMBERG: Your Honor, to be fair, we did not

25 receive a copy. So far as I know. And I must put it -- I must



57

1 make that qualification. So far as I know, we did not see a

2 copy until the papers were filed.

3 THE COURT: But you were cc'd in the documents.

4 MR. SAMBERG: I see, with regard to one of these

5 documents, we are cc'd. But so far as I know, we did not

6 receive a copy until it was filed.

7 And whether the filing was made, or whether the

8 transmission was made in late August or early September, I

9 think, is irrelevant, really, for present purposes.

10 The point is that --

11 THE COURT: It means that as of that date these

12 documents were -- these securities were in Mrs. Dugaw's name.

13 MR. SAMBERG: Perhaps.

14 THE COURT: What?

15 MR. SAMBERG: Your Honor, perhaps.

16 I mean if we were on trial, and this is what we are

17 standing here before you, in effect, doing. If we were on

18 trial, you would require that these documents be authenticated,

19 that my issues with regard to authentication be resolved, that

20 a foundation be made before they were admitted into evidence.

21 Since they are not authenticated and cannot be admitted into

22 evidence, they don't prove anything.

23 In addition, I think in the context, as I mentioned,

24 in addition to everything else, the status of Marcus Dugaw is

25 entirely up in the air.



58

1 But, your Honor, I think -- I think I have spoken

2 enough in terms of the points that we want to make with regard

3 to these matters of evidence and substance with regard to the

4 questions that are raised with regard to who is entitled to

5 bring a claim, if nothing else. And we would request an

6 opportunity to take discovery with regard to those issues, and

7 a few others, over a relatively brief period of time. And we

8 would suggest to the Court 60 days. Because, we would be

9 asking for documents and an opportunity to take depositions.

10 But no more than 60 days. With your Honor's permission.

11 What we do submit to the Court is that a motion for

12 summary judgment on this record cannot be granted at this time.

13 MR. TEITELBAUM: Would your Honor entertain a very

14 brief reply?

15 THE COURT: Yes.

16 MR. TEITELBAUM: Thank you, your Honor.

17 Your Honor, for the record, Jay Teitelbaum for

18 plaintiffs Trondheim and Meixler.

19 A few points that I would like to try to make.

20 I think at the outset of my initial argument, I

21 started out by saying what this is all about is trying to make

22 the simple complex. I don't think I need to say anything more

23 about that after hearing Mr. Samberg's argument.

24 I scratched my head quite a bit, especially with the

25 opening, with that the plaintiffs here are in a unique



59

1 position. And the argument here is we're so tiny that we're

2 almost irrelevant. But, yet, we're going to create some

3 travesty in case there is a payment. And I'll even address on

4 the merits why that is wrong. But what it -- what it alluded

5 to was these little guys are the only ones suing, they must be

6 wrong.

7 I mean it's been awhile since I have read this to my

8 daughter, but The Emperor's New Clothes came to mind. The

9 little boy in the audience was right. And, your Honor, to the

10 extent that we're the little boy, I think we're right here,

11 which is that the notes matured. There have been news releases

12 about ongoing negotiations. Yeah, we knew about them after

13 they happened. And that's not an invitation to attend; that's

14 not an invitation to participate; that's not an invitation for

15 you to, your 50 or 500-thousand dollar claim to play with the

16 gorillas in the room who have hundreds of millions of dollars.

17 In point of fact, aside -- I'm not going to even argue

18 about whether we were or were not invited. It's irrelevant.

19 Because I will represent to the Court, we weren't. But it

20 doesn't matter. The notes matured. There is clearly no

21 obligation under New York law for a party who is holding a

22 matured note to do anything but demand payment. There is no

23 obligation to negotiate at that point. Every contract, of

24 course, has an obligation of good faith and fair dealing in the

25 performance of the contract. But once the note's matured, it's



60

1 irrelevant. Essentially what the Court is hearing, is that

2 this company wants the benefits of a bankruptcy file, the

3 automatic stay, having some committee act for some others as

4 fiduciaries, without any of the burdens.

5 The parties negotiating are not fiduciaries for

6 anybody here. They are negotiating on their own behalf. There

7 is no bankruptcy filing. This company continues to do whatever

8 it feels like doing with whatever assets it has in this

9 country, and outside of the country, perhaps to the detriment

10 of creditors. Because there is no oversight by a bankruptcy

11 court. Yet, we're being asked, wait, just wait, just wait.

12 Why? Because of alleged hearsay. The entire argument here was

13 predicated upon hearsay and irrelevant evidence.

14 I think your Honor put your finger on it, frankly. My

15 clients submitted not one affidavit in reply, but their initial

16 pleading that's appended to the notice of removal, the summons,

17 the notice of motion, motion for summary judgment, included

18 affidavits as well that attested to the fact that these

19 plaintiffs owned these shares. There is no dispute. There is

20 no credible dispute here. This is sort of a watch as my

21 fingers never leave my hand, I'm going to come up with as much

22 stuff as I can to throw mud up against the wall. That is not

23 what summary judgment is about. It has to be a credible

24 dispute as to a material fact.

25 The fact that account statements were redacted, I have



61

1 advised the Court I have the originals. I would take the

2 position, frankly, I've complied with the rules on privacy in

3 certain -- many of these redactions on the electronic filing

4 system. You are not supposed to include account numbers, so

5 you can't get hacked and can't get broken into. I left the

6 four last digits on the account numbers so I showed what it

7 was. But I do a lot of bankruptcy and other work where you

8 have to redact social Security numbers, account numbers.

9 Southern District has a rule on that. I complied with that

10 rule. There was nothing improper, nothing nefarious about

11 those redactions.

12 The remaining redactions regarding accounts that have

13 nothing do with this, that's appropriate, that's private

14 business. Has nothing do with it.

15 Again, with respect to the issue of travesty and

16 double jeopardy. I want to just spend a minute and talk about

17 that and actually address a comment and a question that I think

18 was probably the most important one that the Court had, which

19 is, if I grant the plaintiff's relief, aren't I putting them

20 ahead. And I heard you loud and clear.

21 Your Honor, Section 6.07 of the indenture specifically

22 provides that, notwithstanding any other provision of this

23 indenture, the right of any Holder to receive payment of all

24 amounts due with respect to securities on or after the

25 respective due date, which we know has passed, as provided



62

1 herein, or to bring suit for the enforcement of such payment on

2 or after such respective dates, shall not be impaired or

3 affected without the consent of the Holder. Each of my clients

4 at paragraph 16 of their affidavits assert they have not

5 consented.

6 So, your Honor, I understand the issue that you have

7 raised, but that's not the problem of the Court. That's the

8 problem negotiated in the indenture by the parties, which is

9 noteholders have their right to enforce the payment. And, if

10 they decide to file bankruptcy because the dominoes fall, so be

11 it. That is their right. That is our -- I don't even view it

12 as a risk, I view it as -- I wouldn't -- I wouldn't mind having

13 this business under the auspices of a Court to make sure assets

14 are not disappearing. But until that happens, we're not going

15 to file an involuntary petition at the moment against this

16 company. But the fact of the matter is, that they have the

17 right to file bankruptcy to protect their assets. They have

18 the right to file bankruptcy to get a committee appointed to

19 negotiate the type of deal they are trying to do informally.

20 They haven't done it.

21 So this, in all due respect, is not a bankruptcy

22 Court. You have a motion before you for summary judgment.

23 There is no travesty. And I submit there is no double

24 jeopardy, if you will, on the payment.

25 Why is that? Well, the letters your Honor, that were



63

1 submitted to the Court -- and Mr. Samberg got copies of

2 everything here. First of all, the participants, First

3 Clearing and Merrill Lynch, under a medallion stamp

4 guaranteeing the signature of that entity of First Clearing and

5 Merrill Lynch, sent letters to DTCC attesting to the fact that

6 their customers, in this case Mr. Meixler and Trondheim, held

7 securities in a specified amount for Suntech. Identified the

8 commencement of the action. And, under the rules of DTCC which

9 the company subscribed to by utilizing DTCC, agreed to

10 indemnify DTC if the information in fact set forth in their

11 representations to DCC were not accurate. In reliance upon

12 that normal business practice DTC, through CEDE & CO.

13 acknowledged that Mr. Meixler and Trondheim were Holders and

14 specifically authorized them to prosecute the action and

15 enforce the payment of the note.

16 Seems to me, your Honor, that if Suntech decided,

17 okay, you know what, you guys are too small to bother with,

18 we're going to pay you and make you go away, it would be

19 hardpressed for CEDE & Co. to say, oh, you have to pay us too.

20 They have an admission here that they have directed the company

21 to pay somebody else. So I do not see, for the life of me,

22 what the issue is of this travesty and double jeopardy on a

23 payment. If what we are talking about are formalities of

24 releases, this is the process that the company and parties that

25 do this have ascribed to, and this is what we have followed.



64

1 And, pointedly, this is what the Court in Applestein, Second

2 Circuit 415 F.3d 242 addressed and specifically found that

3 these proxy statements are proper, appropriate, admissible

4 evidence for standing.

5 Once we have that, everything else is noise.

6 everything else just goes away. Because there is no defense to

7 the payment.

8 Your Honor asked about cases, because a lot has been

9 made of the issue of 3213. Is it proper. Is it improper.

10 Again, I think it's irrelevant under Valley National

11 because, really, what the Court is faced with is a motion for

12 summary judgment. But to the extent the Court was interested,

13 in our reply brief we cite, at pages 4 and 5, New York State

14 cases which stand for the basic proposition, and I quote, your

15 Honor: 3213 may be utilized to enforce any instrument for the

16 payment of money only, and is not limited to negotiable and

17 nonnegotiable paper within the terms of Article III. We then

18 have several cases we cite. These cases refer to guarantees,

19 certain indemnities which, on their face, say pay.

20 So, the fact of the matter is that the indenture

21 stands a foot high, is irrelevant. Yes, it is a complicated

22 document. But we're not suing on any conditions. We're not

23 suing on breaches of covenants. At this time, post maturity,

24 it's an absolute unconditional obligation to pay a sum certain.

25 We have submitted the affidavits of Mr. Peterson. And



65

1 I think the Court -- and I'm not going to belabor it -- has

2 identified the fact that these are uncontested affidavits. The

3 attempts to go behind them are silly, frankly.

4 The summary, I will tell the Court, on the Peterson

5 affidavit, is a one-page summary which summarizes the sheets

6 behind them, which are the trades, which aggregate the

7 $500,000. Its annexed to an affidavit. The Court sees those

8 things all of the time.

9 With respect to the Meixler affidavit, they are not

10 being consistent. The second page of the trade confirmations

11 dated May of 2013 clearly indicates the acquisition of 50,000

12 face dollar shares or amount of the notes. That's it. The

13 other was background for the ins and the outs of the account.

14 We wanted it to be as complete as possible. I apologize if it

15 created confusion. The May 30th date, as set forth in Mr.

16 Meixler's affidavit, is the only relevant one. It shows CD &

17 Co. has acknowledged that. The company has said to the Court,

18 as said in its papers, the only entity it needs to deal with is

19 CD & Co. If it is good enough for CEDE & Co. it should be good

20 enough for Suntech.

21 Thank you, your Honor.

22 MR. SAMBERG: May I have a moment for a couple points,

23 and that's --

24 MR. DUGAW: Your Honor, I would also like to make a

25 reply.



66

1 THE COURT: Mr. Dugaw comes next.

2 MR. SAMBERG: Yes, sir.

3 THE COURT: Yes, Mr. Dugaw.

4 MR. TEITELBAUM: Yes, your Honor.

5 I concur with Mr. Teitelbaum's arguments that the

6 defendants arguments are all essentially red herrings. The

7 documents submitted in my case, I certify that they come from

8 the personal business records of my wife. And I have also

9 submitted a copy of our marriage certificate. The Court is

10 clearly aware of the nature of the law in California.

11 The trade confirmation and partially-redacted account

12 statement, the account statement shows the current condition as

13 well as the letter from CEDE & CO. I certainly was never

14 contacted to participate in any negotiations. Prior to

15 speaking with Mr. Samberg, after this action was already filed.

16 And I would point out to the Court, that Mr. Samberg, as he

17 mentioned, invited my wife and I to participate in the

18 negotiations and, yet, questions whether or not we're Holders

19 of the notes, which is nonsensical.

20 At any rate, Mr. Trondheim, I think eloquently

21 described my wife and my exact position. And we would like the

22 Court, again, to grant summary judgment in our favor.

23 THE COURT: Thank you.

24 MR. TEITELBAUM: For what it's worth, I didn't say it,

25 but we would obviously object to delaying this further with



67

1 discovery. We don't think it is appropriate, and we would ask

2 the Court to rule on the motion.

3 MR. SAMBERG: Your Honor, two quick points and I won't

4 take up more of the Court's time.

5 I just point out the obvious, that a motion for

6 summary judgement -- in a motion for summary judgment, the

7 evidence is treated as if it were submitted for trial. With

8 the exception that any doubts, any ambiguities, any questions

9 with regard to that evidence must be resolved in favor of the

10 defendant.

11 In this case, take for example the letters, which seem

12 to be perfectly correct, formal letters on their face, it's not

13 the first time that we've ever seen such documents. But you

14 would not admit them into evidence, for two reasons.

15 Number one, the plaintiffs have not laid a foundation for

16 authenticity; number two, since they are submitted for the

17 truth of their content, they are hearsay and they are

18 inadmissible in the absence of a foundation for a business

19 records exception, and the plaintiffs have not done that,

20 either.

21 All of this is to say that in the case of a Rule 56

22 summary judgment motion, I doubt that this Court would ever

23 permit such a motion to be made before any opportunity for

24 discovery, whatsoever. In order to be able to establish

25 whether there is a credible dispute regarding material fact,



68

1 which is a phrase that Mr. Teitelbaum adopted, that is

2 determined by federal courts in New York after the parties have

3 had an opportunity to take discovery. We are not asking on

4 behalf of defendant for a prolonged period of discovery. As I

5 mentioned earlier, we just want some period of discovery so

6 that we can defend ourselves. And we suggest, and request, 60

7 days for that purpose, considering the nature of the discovery

8 that would be required, and the geographic spread of the

9 parties that would be subject to that discovery.


11 MR. TEITELBAUM: Your Honor, just briefly, very

12 quickly. If the Court were so inclined, I just want to put on

13 the record that we think this discovery request is so frivolous

14 that I believe, as Judge Griesa has held in a prior case

15 involving the Argentina bombs, the question becomes who is

16 going to bear the costs of this. And I think what this is is

17 the 800 pound gorilla trying to beat up the little guys in

18 delay. And we would respectfully put on the record we would

19 believe we would seek sanctions. Because if what I'm hearing

20 is they are challenging the authenticity of the CEDE & Co.

21 documents, that is sanctionable conduct, your Honor. And I say

22 that with hesitation. But it is outrageous. Because these

23 people are sophisticated. They know what that document is.

24 And in fact one of those documents was signed by Mr. Hemsley,

25 the very affiant they relied upon in their own papers. And now



69

1 they are challenging that document? It is outrageous.

2 THE COURT: Mr. Hemsley is --

3 MR. TEITELBAUM: Signed one of the DTC letters that we

4 received. And he also signed ECF docket number 9, which

5 identified the participants in a pleading filed by the

6 defendants here in opposition. So it is outrageous that they

7 would stand here and say they need discovery on the

8 authenticity of those documents. And I've tried cases. And I

9 know Mr. Samberg has. And I know parties stipulate all of the

10 time to authenticity of documents, and don't put other parties

11 or the Court through the burden of the game and the show of

12 authenticity when there really is no dispute. This is just

13 delay, and to beat up the little guys.


15 MR. SAMBERG: Your Honor, if I may take a moment.

16 On behalf Suntech, I absolutely resent that last

17 remark. I'm going to put that aside, and I'm going to ignore

18 it.

19 But the question, the rules of evidence, generally, do

20 not only include authenticity, but hearsay. And in addition,

21 to the extent that defendant has submitted any paper from third

22 party, that paper has been authenticated by a certificate by

23 that third party, so that it could be admissible into evidence.

24 Rules of evidence do mean something, especially in

25 this Court. And we rely on them, in part, in addition to the



70

1 substantive points as to, as I pointed out earlier, there are

2 questions with regard to who is entitled to be a claimant in

3 this case, and by what right. And we feel that Suntech is

4 entitled to make that examination, to get that right, before

5 any judgment is issued in this case.


7 MR. DUGAW: If I may, one, very quickly --

8 THE COURT: Yes, Mr. Dugaw.

9 MR. DUGAW: The rules of evidence to which Mr. Samberg

10 alludes are not used to block the truth, but to seek it. And

11 in this case, all of the evidence that I presented and that

12 Mr. Trondheim's clients have presented is clearly

13 self-authenticating. There's a clear paper trail on where it

14 came from. There can be no dispute that it's genuine. And I

15 would concur with Mr. Trondheim's objection to any discovery in

16 this case.

17 THE COURT: Well, this is September 12. These

18 documents were submitted, at the latest, in Mr. Dugaw's case on

19 September 3rd. And in Mr. Teitelbaum's case, earlier than

20 that.

21 I think there has been adequate time for Mr. Samberg

22 to call and determine whether the letters were actually sent by

23 CEDE & Co, by Depository Trust Company, by Ameritrade, or any

24 of the other persons herein.

25 And, under those circumstances, I am going to grant



71

1 the motion of the plaintiffs, and by Mr. Dugaw.

2 I'll ask that the plaintiffs submit a judgment, on

3 notice to the defense, within three days, so that -- notice

4 with three days notice to the defendants of the submission of

5 the judgments.

6 Is there anything else to take up?

7 MR. TEITELBAUM: No, your Honor, thank you very much.

8 MR. DUGAW: No. Thank you, your Honor.

9 MR. TEITELBAUM: The order of the Court is the

10 transcript, we'll just submit the judgment. Or should we

11 submit a separate order granting the motion, and then the

12 judgment.

13 THE COURT: Well, I'm going to grant the motion. You

14 don't have to -- it's on the record here, but you do have to

15 submit a judgment.

16 MR. TEITELBAUM: We'll do so. Thank you, your Honor.


18 MR. DUGAW: Thank you, your Honor.

19 THE COURT: Thank you.

20 (Adjourned)

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trondheim - doc 19 transcript

Documents

open court

jay teitelbaum

plaintiffs trondheim

trondheim capital partners

jay11 teitelbaum

suntech power holdings

new york cplr

teitelbaum baskin attorneys