Opinion

Fairfield Sentry Limited (In Liquidation) v. Union Bancaire Privee, UBP SA

Court: United States Bankruptcy Court, S.D. New York
Filed: Jun 3, 2025
Cited by: 0 cases
Authority: More cited than 36.0%

“[I]t is [] insufficient to rely on a defendant’s random fortuitous, or attenuated contacts or on the unilateral activity of a plaintiff [for the exercise of personal jurisdiction] over an out-of-state [defendant].”

How later courts described this case

“[I]t is [] insufficient to rely on a defendant’s random fortuitous, or attenuated contacts or on the unilateral activity of a plaintiff [for the exercise of personal jurisdiction] over an out-of-state [defendant].”
“[T]he United States[] and New York [have an] interest in monitoring banks and banking activity to ensure that its system is not used as an instrument in support of terrorism, money laundering, or other nefarious ends.”
“A feeder fund is an entity that pools money from numerous investors and then places it into a ‘master fund’ on their behalf. A master fund— what Madoff Securities advertised its funds to be—pools investments from multiple feeder funds and then invests the money.”
explaining a choice of law provision can establish jurisdiction in conjunction with other evidence

Written by the judges who cited it.

The opinion

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

In re: Chapter 15

Fairfield Sentry Limited, et al. Case No. 10-13164 (JPM)

(Jointly Administered)

Debtors in Foreign Proceedings.

FAIRFIELD SENTRY LTD. (In Liquidation), et al.,

Plaintiffs,

Adv. Pro. No. 10-03636 (JPM)

ABN AMRO SCHWEIZ AG a/k/a AMRO

(SWITZERLAND) AG, et al.,

Defendants.

MEMORANDUM OPINION AND ORDER DENYING

DEFENDANT’S MOTION TO DISMISS

APPEARANCES:

CLIFFORD CHANCE US LLP

Attorneys for the Defendant, Banque Internationale à Luxembourg SA, f/k/a Dexia Banque

Internationale à Luxembourg SA

Two Manhattan West

New York, NY 10001

By: Jeff E. Butler

BROWN RUDNICK LLP

Attorneys for the Plaintiffs, Joint Liquidators

Seven Times Square

New York, NY 10036

By: Jeffrey L. Jonas

David J. Molton

Danny Cameron Moxley

JOHN P. MASTANDO III

UNITED STATES BANKRUPTCY JUDGE

I. INTRODUCTION

Pending before the Court is the motion of Banque Internationale à Luxembourg SA , f/k/a

Dexia Banque Internationale à Luxembourg SA1 (“BIL” or “Defendant”), to dismiss the Fifth

Amended Complaint (the “Amended Complaint” or “Am. Compl.”) for lack of personal

jurisdiction. Mot. to Dismiss, ECF2 No. 754 (the “Motion”). The parties did not request oral

argument on the Motion, and instead indicated that they were resting on the papers. See Letter re:

Status of Remaining Oral Arguments, Ex. A, ECF No. 1323. For the reasons set forth herein, the

Court DENIES the Defendant’s Motion to Dismiss.

II. JURISDICTION

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334 and 157 and the

Amended Standing Order of Reference dated January 31, 2012 (Preska, C.J.). This Court

previously concluded that it has subject matter jurisdiction over this and related actions. See In re

Fairfield Sentry Ltd., 2018 WL 3756343 (Bankr. S.D.N.Y. Aug. 6, 2018) (“Fairfield I”); see also

Stip. Order, ECF No. 577. Personal jurisdiction is contested by the Defendant and will be

discussed below.

1 Certain documents referenced in the parties’ filings in connection with this Motion referred to BIL by its

former name.

2 Citations to this Court’s electronic docket refer to the docket of Adv. Pro. No. 10-03636-jpm unless otherwise

noted.

III. BACKGROUND

This adversary proceeding was filed on September 21, 2010. See Amended Complaint

Against All Defendants (the “Complaint” or “Compl.”), ECF No. 8. Kenneth M. Krys and Greig

Mitchell (the “Liquidators”), in their capacities as the duly appointed Liquidators and Foreign

Representatives of Fairfield Sentry Limited (In Liquidation) (“Sentry”), Fairfield Sigma Limited

(In Liquidation) (“Sigma”), and Fairfield Lambda Limited (In Liquidation) (“Lambda” and,

together with Sentry and Sigma, the “Fairfield Funds” or “Funds”) filed the Amended Complaint

on August 12, 2021. See Am. Compl., ECF No. 679. Via the Amended Complaint, the Liquidators

seek the imposition of a constructive trust and recovery of over $1.7 billion in redemption

payments made by Sentry, Sigma, and Lambda to various entities known as the Citco Subscribers.

Id. ¶¶ 1–2, 205–16; id. Exs. A–C.3 Of that amount, Defendant allegedly received over $5.5 million

through redemption payments from its investment in Sentry. Memorandum of Law in Opposition

to Dexia Banque Internationale à Luxembourg SA’s Motion to Dismiss (the “Opposition” or

“Opp’n”), ECF No. 1136; see also Declaration of David S. Flugman in Support of the Liquidator’s

Opposition to Defendant Dexia Banque Internationale à Luxembourg SA’s Motion to Dismiss

(“Flugman Decl.”) Exs. 1, 11–13, 18–19, ECF No. 1137 (Redemption Records).

3 At the time of the filing of the Amended Complaint, the Plaintiffs made no specific allegations as to the exact

amounts received by any of the beneficial shareholders. With respect to the Defendant, the Amended Complaint states

in relevant part that “[b]ased on Fund records, some or all of the Redemption Payments made to the Citco Subscribers

may have been paid to an account holder or holders associated with the Beneficial Shareholder, Dexia Banque

International A Luxembourg. . . .” Am. Compl. ¶ 65, ECF No. 679. The Amended Complaint alleges that several

other defendants may have received redemption payments made to the Citco Subscribers. Id. ¶¶ 34–112. This opinion

concerns only those payments that the Plaintiffs allege were paid to BIL.

A. THE BLMIS PONZI SCHEME

This adversary proceeding arises out of the decades-long effort to recover assets of the

Bernard L. Madoff Investment Securities LLC (“BLMIS”) Ponzi scheme.4 See Am. Compl. ¶ 1,

ECF No. 679. The Citco Subscribers allegedly invested, either for their own account or for the

account of others, into several funds — including Sentry, Sigma, and Lambda — that channeled

investments into BLMIS. Id. ¶¶ 2, 5, 15.

Fairfield Sentry was a direct feeder fund in that it was established for the purpose of

bringing investors into BLMIS, thereby allowing Madoff’s scheme to continue. Id. ¶¶ 5; 133–34;

see also In re Picard, 917 F.3d 85, 93 (2d Cir. 2019) (“A feeder fund is an entity that pools money

from numerous investors and then places it into a ‘master fund’ on their behalf. A master fund—

what Madoff Securities advertised its funds to be—pools investments from multiple feeder funds

and then invests the money.”). Fairfield Sigma and Lambda, in contrast, were indirect feeder

funds, established to facilitate investment in BLMIS through Fairfield Sentry for foreign

currencies. See Am. Compl. ¶¶ 133–34. BLMIS used investments from feeder funds, like the

Fairfield Funds, to satisfy redemption requests from other investors in the scheme. Id. ¶¶ 5–7, 13.

Without new investors, BLMIS would have been unable to make payments to those who chose to

withdraw their investments, and the scheme would have fallen apart. Id. ¶¶ 7–8, 12–14, 134.

The Amended Complaint alleges that investors received payments on account of their

shares in the Fairfield Funds based on a highly-inflated Net Asset Value (“NAV”). Id. ¶ 7. The

Citco Subscribers and the beneficial shareholders were allegedly such investors. Id. To calculate

the NAV, administrators used statements provided by BLMIS that showed “securities and

4 The Court will not recount all details concerning the Ponzi scheme perpetrated by Madoff. Details of that

scheme have been recounted by many courts. See, e.g., In re Madoff, 598 B.R. 102, 106 (S.D.N.Y. 2019), aff’d 818

F. App’x 48 (2d Cir. 2020).

investments, or interests or rights in securities and investments, held by BLMIS for the account of

Sentry.” Id. ¶ 136. In fact, no securities were ever bought or sold by BLMIS for Sentry, and none

of the transactions on the statements ever occurred. Id. ¶ 137. The money sent to BLMIS by the

Fairfield Funds for purchase of securities was instead used by Bernard Madoff to pay other

investors or was “misappropriated by Madoff for other unauthorized uses.” Id. The NAVs were

miscalculated, and redemption payments were made in excess of the true value of the shares. Id.

¶ 139. The Fairfield Funds were either insolvent when the redemption payments were made or

were made insolvent by those payments. Id.

BIL is organized under the laws of Luxembourg with a registered address in Luxembourg,

Luxembourg. Id. ¶ 65. BIL allegedly invested into and redeemed shares of the Fairfield Funds

through “several companies within the Citco corporate family.” Opp’n at 7, ECF No. 1136.

Investments into the Funds were registered in the name of Citco Global Custody N.V. or Citco

Global Custody (N.A.) N.V. (together, “Citco Global Custody”). Id. Citco Bank Nederland N.V.

Dublin Branch (“Citco Bank Dublin Branch”) and Citco Banking Corporation N.V. (together with

Citco Bank Dublin Branch, “Citco Bank”) allegedly carried out subscriptions and redemptions on

behalf of BIL and other investors. Id. Citco Global Custody and Citco Banks (collectively, the

“Citco Subscriber”)5 served as the subscriber of record for BIL’s shares of the Fairfield Funds. Id.

The Citco Subscriber was organized under the laws of either Curaçao or the Netherlands. See

Memorandum of Law in Support of Dexia Banque International à Luxembourg’s Motion to

5 The Court will refer to the “Citco Subscriber” in this opinion as it is defined by the Plaintiffs in their

opposition memorandum. See Opp’n at 2, ECF No. 1136. The Amended Complaint refers to the “Citco Record

Subscribers” and the “Citco Subscribers.” See Am. Compl. ¶ 8, ECF No. 679. The Citco Record Subscribers is

defined therein to include Citco Global Custody, Citco Fund Services (Europe) BV and Citco Fund Services (BVI)

(together with Citco Fund Services (Europe) BV, “Citco Fund Services”). Id. The Citco Subscribers is defined in the

Amended Complaint to include Citco Global Custody, Citco Bank, and Citco Fund Services. Id. The Citco Record

Subscribers allegedly acted as “agents of and nominees for the Citco Banks” and received approximately $1.7 billion

of redemption payments for beneficial shareholders. Id. The Citco Subscribers allegedly were agents of BIL and

other defendants in this adversary proceeding with respect to investments in the Fairfield Funds. See id.

Dismiss for Lack of Personal Jurisdiction (the “Memorandum of Law” or “Mem. L.”) at 6 n.8,

ECF No. 755 (citing Am. Compl. ¶¶ 32–34, Fairfield Sentry Limited (In Liquidation) v. Citco

Global Custody N.V., Adv. Pro. No. 19-01122, ECF. No. 19).

BIL directly invested in the Fairfield Funds as early as 2001. Opp’n at 8. In February

2004, BIL opened an account at Citco Bank in order to invest in the Fairfield Funds. Id. at 10; see

Flugman Decl. Ex. 8, ECF No. 1137 (February 19, 2004 Master Custodian Agreement between

Dexia Banque Internationale A Luxembourg S.A. and Citco Bank Dublin Branch and Citco Global

Custody N.V.). Further, BIL allegedly retained the Citco Subscriber as its agent when it entered

into a brokerage and custody agreement (the “B&C Agreement”) as early as May 2007. Opp’n at

10; see Flugman Decl. Ex. 9 (May 29, 2007, B&C Agreement between Dexia Banque

Internationale A Luxembourg S.A. and Citco Bank Dublin Branch and Citco Global Custody

N.V.). The B&C Agreement authorized Citco Banks to provide “Brokerage Services,” defined to

include “the effecting of transactions of and/or relating to the purchase and sale of and dealing in

Securities in the name and for the account of [BIL],” or of Citco Bank Dublin Branch or Citco

Global Custody N.V., or “any nominee for the account of [BIL],” and “any services ancillary

thereto as set out in this Agreement.” Flugman Decl. Ex. 9 at -062.

From March 2004 through April 2005, BIL allegedly subscribed through the Citco

Subscriber for a total of 4,658.46 shares of Sentry. See Opp’n at 8; see also Flugman Decl. Exs.

2–3 (Subscription Records). BIL, through the Citco Subscriber, redeemed approximately

$5,537,189.75 worth of Sentry shares from April 2005 through August 2007 (such period, the

“Redemption Period”). See Opp’n at 13; see also Flugman Decl. Exs. 1, 11–13, 18–19

(Redemption Records). At the directions and instructions of the Citco Subscriber, as the purported

agent for BIL, “some . . . of the Redemption Payments were received at . . . designated United

States-based bank accounts.” Am. Compl. ¶ 141.

Bernard Madoff was arrested for alleged violations of federal securities laws on December

11, 2008. See id. ¶ 193. The United States Attorney brought criminal charges against him, alleging

that Madoff ran a Ponzi scheme. Id. On December 11, 2008, the Securities Exchange Commission

filed an action in the Southern District of New York to halt the continued offerings of securities.

Id. ¶ 194. In March 2009, Madoff pleaded guilty to criminal charges against him and confessed

to operating a Ponzi scheme and fabricating statements and trade confirmations. Id. ¶¶ 195–96.

Madoff was sentenced to 150 years in federal prison and died in April 2021. Id. ¶ 197.

The Amended Complaint alleges that the Citco Subscribers, including the purported agent

of BIL, “had knowledge of the Madoff fraud, and therefore knowledge that the Net Asset Value

was inflated” when the redemption payments were made. Id. ¶ 209. The Amended Complaint

further asserts that, while receiving redemption payments, the Citco Subscribers “uncovered

multiple additional indicia that Madoff was engaged in some form of fraud” but “turned a blind

eye, [and] accept[ed] millions of dollars while willfully ignoring or, at the very least, recklessly

disregarding the truth in clear violation of the law of the British Virgin Islands . . . .” Id. ¶¶ 8, 209.

These indicia included verification that there was no “independent confirmation that BLMIS-held

assets even existed,” Madoff’s failure to segregate duties, and BLMIS’s “employing an

implausibly small auditing firm” rather than a reliable auditor. Id. ¶¶ 9, 209. In the face of red

flags such as these, the Citco Subscribers and other Citco entities purportedly “quietly reduced

[their] own exposure to BLMIS through the Funds, and significantly increase[ed] [their] Custodian

fees to offset the risk.” Id. ¶ 209.

B. THE PRIOR LITIGATION AND PROCEDURAL HISTORY

The Fairfield Funds were put into liquidation in the BVI in 2009. Am. Compl. ¶¶ 26–29,

ECF No. 679. The BVI court issued orders appointing the foreign representatives, Kenneth Krys

and Greig Mitchell, as liquidators of the Fairfield Funds. Id. ¶ 29. Pursuant to the appointment

order of the BVI court,6 the “Foreign Representatives are responsible for all aspects of the Funds’

business, including protecting, realizing, and distributing assets for the Funds’ estates.” Id. ¶ 203.

The Liquidators commenced actions in the BVI against a number of investors who had redeemed

shares of the Fairfield Funds before the collapse of the scheme. See Mem. L. at 4, ECF No. 755;

Fairfield Sentry Ltd. v. Citibank, N.A. London, 630 F. Supp. 3d 463, 475 (S.D.N.Y. 2022); see also

Fairfield Sentry Ltd. v. Theodoor GGC Amsterdam (In re Fairfield Sentry Ltd.), 596 B.R. 275, 284

(Bankr. S.D.N.Y. 2018) (“Fairfield II”).

The Liquidators filed petitions in this Court in June 2010 under Chapter 15 of the

Bankruptcy Code, seeking recognition of the BVI proceedings as foreign main proceedings. See

Am. Compl. ¶ 30, ECF No. 679. This Court granted that recognition on July 22, 2010. Id. All

cases filed by the Plaintiffs were administratively consolidated before this Court in November

2010. See Consolidation Order, Adv. Pro. No. 10-03496, ECF No. 25.

The Plaintiffs asserted multiple causes of action in those consolidated adversary

proceedings including, inter alia, mistaken payment and constructive trust.7 See Compl. ¶¶ 63–

86, ECF No. 8; see also 630 F. Supp. 3d at 479. In October 2011, this Court stayed the U.S.

6 The order was issued by the “Commercial Division of the Eastern Caribbean High Court of Justice.” See

Am. Compl. at 1.

7 Other causes of action included unjust enrichment, money had and received, unfair preferences under BVI's

Insolvent Act § 245, undervalue transactions under the Insolvent Act § 246, breach of contract, and breach of the

implied covenant of good faith and fair dealing. Fairfield Sentry Ltd. v. Citibank, N.A. London, 630 F. Supp. 3d at

463 (S.D.N.Y. 2022).

proceedings pending resolution of the BVI proceedings. See Am. Order Staying Redeemer

Actions, Adv. Pro. No. 10-03496, ECF No. 418.; Fairfield I, 2018 WL 3756343 at *3.

In April 2014, the Privy Council affirmed dismissal of the Plaintiffs’ BVI law claims for

restitution based on mistaken payment. Fairfield Sentry Ltd. (In Liquidation) v. Migani, [2014]

UKPC 9 (“Migani ”).8 The Privy Council held that the Plaintiffs’ claims for restitution in the BVI

to recover redemption payments arising out of transactions governed by the Funds’ Articles of

Association are governed by BVI law. Id. ¶ 17. The Plaintiffs’ claims to recover redemption

payments thus depended on whether Sentry was bound to make those payments under the “true

NAV per share, ascertained in the light of information which subsequently became available about

Madoff’s frauds, or . . . the NAV per share which was determined by the Directors at the time of

redemption.” Id. ¶ 19. The Privy Council concluded that the NAV had to be definitively

determined at the time of the subscription or redemption. Id. ¶ 21. The redemption payments

made under the NAV were thus not subject to restitution and the payee was not unjustly enriched

by receiving funds, even if the amount was mistaken. Id. ¶¶ 18–19.

After Migani was issued, the Plaintiffs allegedly obtained evidence of bad faith of Citco,

the Fairfield Fund’s administrator, when it issued redemption certificates. See Fairfield I, 2018

WL 3756343, at *5–6. Plaintiffs moved to amend the complaint, seeking to add allegations that

Citco lacked good faith when it issued certificates for redemptions and was aware that the NAV

was inflated at the time. See id. at *6. The Plaintiffs argued that the certificates would not be

binding under the Funds’ Articles if they were not issued in good faith. Id.

8 Migani is available at https://jcpc.uk/uploads/jcpc_2012_0061_judgment_416722c30e.pdf and, without

numbered paragraphs, on Westlaw at Fairfield Sentry Ltd (In Liquidation) v. Migani, 2014 WL 1219748 (UKPC, Apr.

16, 2014).

In December 2018, this Court found that the Plaintiffs could allege bad faith on behalf of

Citco in the U.S. proceedings and could seek recovery of the redemption payments only “where a

Defendant knew the NAV was inflated at the time of redemption.” Fairfield II, 596 B.R. at 295.

Of the common law claims, the Court allowed only the Plaintiffs’ claims for constructive trust

against the so-called “Knowledge Defendants” to proceed. Id. at 301 (“The suggestion that the

subsequent disclosure of facts indicating that the valuation was made in bad faith vitiates the

contract and requires restitution lacks support. The only exception concerns the Knowledge

Defendants that received redemption payments with the knowledge that the NAV was wrong. In

those circumstances, the Liquidators may seek to impose a constructive trust.”). In December

2020, this Court ruled that § 546(e) bars Plaintiffs’ BVI avoidance claims to recover unfair

preferences and undervalue transactions. In re Fairfield Sentry Ltd., 2020 WL 7345988, at *1

(Dec. 14, 2020) (“Fairfield III”).

Following these decisions, only the constructive trust claims survived. Id.; In re Fairfield

Sentry Ltd., No. 10-13164 (SMB), 2021 WL 771677, at *1 (Bankr. S.D.N.Y. Feb. 23, 2021)

(“Fairfield IV”), aff'd, 630 F. Supp. 3d 463 (2022). The Liquidators filed a further motion to

amend the complaints against the Knowledge Defendants. See Mot. to Amend, ECF No. 618;

Mot. to Amend, Adv. Pro. No. 10-03496, ECF No. 3737. On August 5, 2021, this Court granted

the motion to amend the complaint and lifted the stay of the redeemer actions. See Order Granting

Mot. to Amend, ECF No. 676; Order Lifting Stay of Redeemer Actions, ECF No. 675.

C. THE PENDING MOTIONS

The Amended Complaint seeks the imposition of a constructive trust on the redemption

payments received from the Fairfield Funds. See Am. Compl. ¶ 205, ECF No. 679. The Amended

Complaint alleges that Defendant’s purported agent, the Citco Subscriber, had knowledge of the

fraud at BLMIS and therefore knowledge that the NAV was inflated. Id. ¶ 209. “By reason of

their receipt of some or all of the Redemption Payments, the Beneficial Shareholders have been

unjustly enriched to the detriment of the [Fairfield] Funds and other shareholders and creditors of

the Funds.” 9 Id. ¶ 213.

Under BVI law, “lack of good faith, i.e. bad faith, includes wrongdoing by one who acts

recklessly as well as one who acts with actual knowledge that he is acting wrongfully or willfully

blinds himself to that fact.” Id. ¶ 206 (citing Fairfield II, 596 B.R. at 293). As this Court previously

found:

To establish a constructive trust claim under English law, which would apply in the

BVI, ‘the plaintiff must show, first, a disposal of his assets in breach of fiduciary

duty; second, the beneficial receipt by the defendant of assets which are traceable

as representing the assets of the plaintiff; and third, knowledge on the part of the

defendant that the assets he received are traceable to a breach of fiduciary duty.’

Fairfield IV, 2021 WL 771677, at *3 (quoting El Ajou v. Dollar Land Holdings Ltd. [1994] 2 All

E.R. 685, 700).

The Amended Complaint alleges that the defendants, including BIL as a beneficial

shareholder of certain accounts, purposefully availed themselves of the laws of the United States

and the State of New York by “investing money with the Funds, and knowing and intending that

the Funds would invest substantially all of that money in New York-based BLMIS.” Am. Compl.

¶ 20, ECF No. 679.

The parties engaged in personal jurisdiction discovery between September 2021 and

August 2022. See Scheduling Order, ECF No. 714; Second Am. Scheduling Order, ECF No. 997.

Due to alleged spoilation of evidence, Plaintiffs filed a motion for sanctions on January 20, 2023.

Motion for Sanctions, ECF No. 1083. After briefing and oral argument on March 15, 2023, the

9 As stated supra, footnote 3, the Amended Complaint alleges that several other defendants may have received

redemption payments made to the Citco Subscribers. Am. Compl. ¶¶ 34–112, ECF No. 679.

Court “concluded that (i) Defendant spoliated evidence in violation of Federal Rule of Civil

Procedure 37(e) as made applicable here by Federal Rule of Bankruptcy Procedure 7037; (ii)

Defendant acted with intent in doing so; and (iii) such spoliation has prejudiced the Liquidators.”

Order Granting Motion for Sanctions under Rule 37(e) Against Banque Internationale à

Luxembourg SA (the “Spoilation Order”) at 2, ECF No. 1098. The Court entered an adverse

inference against Defendant “that any spoliated evidence would have been favorable to the

Liquidators in establishing personal jurisdiction.” Id.

Defendant has moved to dismiss the Amended Complaint for lack of personal jurisdiction,

arguing that the Amended Complaint has not sufficiently alleged minimum contacts with the forum

to establish personal jurisdiction over Defendant and that exercising personal jurisdiction would

be unreasonable. See Mem. L. at 1–3; 18–19, ECF No. 755.

The Liquidators filed an opposition to the Motions and submitted the declarations of David

S. Flugman and Sara K. Joyce in support of their opposition. See Opp’n, ECF No. 1136; Flugman

Decl., ECF No. 1137; Declaration of Sara K. Joyce (“Joyce Decl.”), ECF No. 1138.10 The

Liquidators argue that exercising jurisdiction over Defendant would be reasonable and that

Defendant’s contacts with the United States, through its own actions and those of its purported

agent, in knowingly and intentionally investing in the Fairfield Funds, using U.S. correspondent

accounts to invest in and receive payments from Sentry, and conducting other business activities

support personal jurisdiction. See Opp’n at 2–5. Defendant filed a reply memorandum on July

31, 2023. See Reply Memorandum in Support of Motion to Dismiss by Banque Internationale à

10 Pursuant to various orders of this Court, portions of certain filings and supporting documents were filed under

seal. For the analysis in this opinion, the Court will refrain from referring to any bank account numbers or names of

individual employees, named only in sealed documents, in full.

Luxembourg SA (the “Reply”), ECF No. 1249. In considering the Defendant’s Motions, the Court

has reviewed the above filings, all other relevant submissions, and the record as a whole.

IV. DISCUSSION

A. THE LAW OF PERSONAL JURISDICTION

In order to subject a defendant to personal jurisdiction in the United States, due process

requires that the defendant have sufficient minimum contacts with the forum in which the

defendant is sued “‘such that the maintenance of the suit does not offend traditional notions of fair

play and substantial justice.’” Picard v. Bureau of Labor Ins. (In re BLMIS), 480 B.R. 501, 516

(Bankr. S.D.N.Y. 2012) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). “In

adversary proceedings, courts must determine whether the defendant has minimum contacts with

the United States, rather than with the forum state.” Picard v. Fairfield Greenwich Grp. (In re

Fairfield Sentry Ltd.), 627 B.R. 546, 565 n.13 (Bankr. S.D.N.Y. 2021) (citing In re Lehman Bros.

Holdings Inc., 535 B.R. 608, 619 (Bankr. S.D.N.Y. 2015)). “When jurisdiction is satisfied through

Bankruptcy Rule 7004,11 a bankruptcy court need not address its state's long-arm statute.” Id.

n.12; see also Owens-Illinois, Inc. v. Rapid Am. Corp. (In re Celotex Corp.), 124 F.3d 619, 630

(4th Cir. 1997).

An analysis of minimum contacts “focuses on the relationship among the defendant, the

forum, and the litigation,” a relationship that “must arise out of contacts that the defendant himself

creates with the forum State.” Walden v. Fiore, 571 U.S. 277, 284 (2014) (quotations omitted).

11 “The summons and complaint and all other process except a subpoena may be served anywhere in the United

States.” Fed. R. Bankr. P. 7004(d). A bankruptcy court may exercise personal jurisdiction over a defendant served

under Rule 7004(d) “[i]f the exercise of jurisdiction is consistent with the Constitution and the laws of the United

States.” Fed. R. Bankr. P. 7004(f).

There are three conditions necessary for the Court to exercise specific jurisdiction12 over the non-

resident defendant:

First, the defendant must have purposefully availed itself of the privilege of

conducting activities within the forum State or have purposefully directed its

conduct into the forum State. Second, the plaintiff's claim must arise out of or relate

to the defendant’s forum conduct. Finally, the exercise of jurisdiction must be

reasonable under the circumstances.

U.S. Bank Nat’l Ass’n v. Bank of Am. N.A., 916 F.3d 143, 150 (2d Cir. 2019) (internal quotation

marks and citations omitted).

To survive a motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule

of Civil Procedure Rule 12(b)(2), the Plaintiffs “must make a prima facie showing that jurisdiction

exists.” SPV Osus Ltd. v. UBS AG, 882 F.3d 333, 342 (2d Cir. 2018) (quoting Penguin Grp. (USA)

Inc. v. Am. Buddha, 609 F.3d 30, 34–35 (2d Cir. 2010)). A trial court has considerable procedural

leeway when addressing a pretrial dismissal motion under Rule 12(b)(2). Dorchester Fin. Sec.,

Inc. v. Banco BRJ, S.A., 722 F.3d 81, 84 (2d Cir. 2013).

A showing sufficient to defeat a defendant's challenge to personal jurisdiction “varies

depending on the procedural posture of the litigation.” Id. (quoting Ball v. Metallurgie Hoboken-

Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990)). Following discovery, “the plaintiff's prima facie

showing, necessary to defeat a jurisdiction testing motion, must include an averment of facts that,

if credited by the trier, would suffice to establish jurisdiction over the defendant.” Ball, 902 F.2d

at 197. “In response to a post-jurisdictional discovery Rule 12(b)(2) motion, ‘the plaintiff need

persuade the court only that its factual allegations constitute a prima facie showing of

12 Courts recognize “two types of personal jurisdiction: general and specific jurisdiction. A state court may

exercise general jurisdiction only when a defendant is ‘essentially at home’ in the State.” Ford Motor Co. v. Montana

Eighth Jud. Dist. Ct., 592 U.S. 351, 352, 141 S. Ct. 1017, 1019, 209 L. Ed. 2d 225 (2021) (quoting Goodyear Dunlop

Tires Operations, S. A v. Brown, 564 U.S 915, 919, 131 S. Ct. 2846, 180 L. Ed. 2d 796 (2011)). The Plaintiffs do not

allege that the Court has general jurisdiction over Defendant. See Opp’n at 3, ECF No. 1136 (arguing that the Court’s

specific jurisdiction is founded on Defendant’s contacts with the forum that relate to the claims at issue).

jurisdiction.’” Averbach v. Cairo Amman Bank, No. 19-CV-0004-GHW-KHP, 2023 WL

5016884, at *4 (S.D.N.Y. June 30, 2023) (quoting Dorchester Fin. Sec., 722 F.3d at 85). “Now

that jurisdictional discovery is complete, Plaintiffs’ burden is different, but it is not heavy.”

Averbach , 2023 WL 5016884, at *6 (citing Dorchester Fin. Sec., 722 F.3d at 85). “Plaintiffs need

only show that their prima facie showing of jurisdiction is factually supported.” Id. at *6. When

considering a motion to dismiss before or after jurisdictional discovery has taken place, “the court

must ‘construe the pleadings and affidavits in the light most favorable to plaintiffs,’ and resolve

all doubts, including factual disputes, in the plaintiff's favor.” Id. at *4 (quoting Ball, 902 F.2d at

197). Further, pursuant to the Spoliation Order, this Court will make “an adverse inference…

against [the] Defendant that any spoliated evidence would have been favorable to the Liquidators

in establishing personal jurisdiction….” Spoliation Order, ECF No. 1098.

B. ANALYSIS OF PURPOSEFUL AVAILMENT

“[M]inimum contacts necessary to support [specific] jurisdiction exist where the defendant

purposefully availed itself of the privilege of doing business in the forum and could foresee being

haled into court there.” Charles Schwab Corp. v. Bank of Am. Corp., 883 F.3d 68, 82 (2d Cir.

2018) (quoting Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 170 (2d Cir.

2013) (“Licci IV”)). For specific personal jurisdiction, “‘[c]ourts typically require that the plaintiff

show some sort of causal relationship between a defendant's U.S. contacts and the episode in suit,’

and the plaintiff's claim must in some way ‘arise from the defendant's purposeful contacts with the

forum.’” Charles Schwab Corp., 883 F.3d at 84 (quoting Waldman v. Palestine Liberation Org.,

835 F.3d 317, 341, 343 (2d Cir. 2016)). “Although a defendant’s contacts with the forum state

may be ‘intertwined with [its] transactions or interactions with the plaintiff or other parties . . . [,]

a defendant’s relationship with a . . . third party, standing alone, is an insufficient basis for

jurisdiction.’” U.S. Bank Nat’l Ass’n, 916 F.3d at 150 (quoting Walden, 571 U.S. at 134)

(alteration in original). “It is insufficient to rely on a defendant’s random, fortuitous, or attenuated

contacts or on the unilateral activity of a plaintiff with the forum to establish specific jurisdiction.”

Id.

BIL asserts that the “Liquidators recently confirmed that the Redemption Payments were

entirely outside of the United States in their opening appellate brief to the District Court

challenging certain of Judge Bernstein’s holdings in Fairfield I, Fairfield II, and Fairfield III.”

Mem. L. at 15, ECF No. 755. The Plaintiffs argued before the District Court that “every relevant

component of the transactions at issue here occurred outside the territorial jurisdiction of the

United States.” Id.; see also Plaintiffs-Appellants’ Opening Brief for Second Round Appeal at 24,

Fairfield Sentry Ltd. v. Citibank NA London, No. 19-cv-3911 (S.D.N.Y. July 21, 2021), ECF No.

440 (the “Opening Brief”). The Plaintiffs’ Opening Brief concerned the extraterritorial application

of the § 546(e)13 safe harbor. See Opening Brief at 24 (arguing that the “Bankruptcy Court erred

in holding that Section 546(e)’s safe harbor could apply extraterritorially to shield from avoidance

settled securities transactions that occurred exclusively outside the United States”).

As another bankruptcy court in this District has stated, the “tests for personal jurisdiction

and extraterritoriality are not the same.” Spizz v. Goldfarb Seligman & Co. (In re Ampal-Am.

Israel Corp.), 562 B.R. 601, 613 n.14 (Bankr. S.D.N.Y. 2017). In Spizz, the bankruptcy court was

able to simultaneously find that the “[t]ransfer was not domestic, and hence, cannot be avoided”

under § 547, while also clarifying that by “attend[ing] meetings in New York around the time of,

13 Section 546(e) of the Bankruptcy Code prohibits a trustee from avoiding a transfer that is a margin payment

or settlement payment “made by or to (or for the benefit of) a commodity broker, forward contract merchant,

stockbroker, financial institution, financial participant, or securities clearing agency, or that is a transfer made by or

to (or for the benefit of) a commodity broker, forward contract merchant, stockbroker, financial institution, financial

participant, or securities clearing agency, in connection with a securities contract. . . .” 11 U.S.C. § 546(e). “By its

terms, the safe harbor is a defense to the avoidance of the initial transfer.” Picard v. BNP Paribas S.A. (In re BLMIS),

594 B.R. 167, 197 (Bankr. S.D.N.Y. 2018) (emphasis in original).

and apparently in conjunction with, the commencement of the chapter 11 case,” a defendant may

be “subject to specific personal jurisdiction.” Id. at 613–14.

By arguing in the District Court that the redemption transfers were foreign for purposes of

extraterritoriality, Plaintiffs did not preclude arguing that there were contacts with the forum for

purposes of personal jurisdiction. To determine whether a transaction is foreign or domestic for

analyzing extraterritoriality issues for federal statutes, courts look at whether the “conduct relevant

to the statute's focus occurred in the United States.” RJR Nabisco, Inc. v. European Cmty., 579

U.S. 325, 326, 136 S. Ct. 2090, 2094, 195 L. Ed. 2d 476 (2016). To determine whether personal

jurisdiction is appropriate, however, courts analyze a defendant’s contacts with the forum “under

a totality of the circumstances test.” Licci IV, 732 F.3d at 170 (citing Best Van Lines, Inc. v.

Walker, 490 F.3d 239, 242 (2d Cir. 2007)).

Here, the Plaintiffs advance three arguments in support of their assertion that Defendant

has sufficient minimum contacts to establish personal jurisdiction. Opp’n at 16, ECF No. 1136.

First, Plaintiffs claim that BIL “purposefully availed itself of the United States by intentionally

investing in BLMIS feeder funds Sentry with the express intention of profiting from BLMIS’s

investments in the U.S. securities market….” Id. Second, Plaintiffs assert that BIL used New

York bank accounts to effectuate its investments into and redemptions from Sentry. Id. Third,

Plaintiffs argue that BIL conducted other related business in the United States. Id. The Court

finds that each of the first and second arguments are independently sufficient to satisfy the first

prong of the test for specific jurisdiction. The third argument alone is insufficient; however, it

provides incremental support under the totality of the circumstances. Thus, overall, the purposeful

availment element of the test for personal jurisdiction is met.

1. Defendant’s Investment in BLMIS Feeder Funds

The Plaintiffs argue that “[t]he evidence presented by the Liquidators makes clear that BIL

intentionally invested in BLMIS feeder fund Sentry knowing that it was designed to subsequently

invest that money in New York-based BLMIS.” Opp’n at 21, ECF No. 1136. The Plaintiffs rely

on Picard v. Bureau of Labor and Insurance, 480 B.R. 501 (Bank. S.D.N.Y. 2012) (“BLI”) and

subsequent cases for the proposition that parties avail themselves of the benefit of New York law

when they invest in feeder funds knowing the ultimate destination is BLMIS in New York. Opp’n

at 21–24. The Plaintiffs highlight that the Citco Subscriber affirmed that BIL received and read

the Sentry Private Placement Memorandum (“PPM”) when the Citco Subscriber signed the

subscription agreement on BIL’s behalf. Id. at 24, n.18; Flugman Decl. Ex. 21 at -643, ECF No.

1137 (“Subscriber has received and read a copy of the [PPM]”). Additionally, the Plaintiffs note

that the Defendant “periodically sought PPMs from [the Citco Subscriber].” Opp’n at 9; see

Flugman Decl. Ex. 6 (email from a BIL employee to a Citco Fund Services employee “urgently”

requesting “the latest prospectus for [Sentry]” — a request which the Citco Fund Services

employee responded to by sending over a Private Placement Memorandum dated July 1, 2003

(such memorandum, the “July 2003 Memorandum”)). The Liquidators also argue that these PPMs

made clear that substantially all the assets of Sentry were controlled by the U.S.-based BLMIS.

See Opp’n at 9; see also Flugman Decl. Ex. 6 at -659, -667 (July 2003 Memorandum). Next, due

to the spoliation of evidence, Plaintiffs ask the Court to infer that destroyed evidence includes

email communications between certain BIL employees and BIL customers that would have

reflected “BIL’s knowledge and intent that money invested in Sentry would be placed with

BLMIS in New York.” Opp’n at 9–10.

The Defendant argues that these allegations are “jurisdictionally irrelevant.” Mem. L. at

15–16, ECF No. 755. The Defendant contends that under Walden, “knowledge that [Sentry] would

invest some of [Sentry’s] own money with BLMIS in New York is insufficient as a matter of law

to support jurisdiction.” Id. at 17 (citing Walden v. Fiore, 571 U.S. 277 (2014)). Further, the

Defendant argues that the case here can be distinguished from the circumstances in BLI.

Specifically, the Defendant argues:

The BLI decision was based on assumption that…redemption payments by BLI

were funded from corresponding payments from BLMIS to [Sentry]…. Here,

however, the Liquidators have not presented evidence that redemption payments to

[the Defendant] were funded from corresponding payments from BLMIS.

Reply at 6, ECF No. 1249; see also BLI, 480 B.R. at 513. Moreover, the Defendant also argues

that BLI is distinguishable because that case concerned an avoidance action pursuant to the

Bankruptcy Code, while the present case involves a constructive trust claim under BVI law. Id.

Here, the Court agrees with the Plaintiffs that BLI provides strong support. In BLI, as here,

the defendant invested “millions of dollars in Fairfield Sentry with the specific purpose of having

funds invested in BLMIS in New York….” BLI, 480 B.R. 501, 517. Contrary to the Defendant’s

assertion, jurisdiction did not turn on the nature of the claim. See id. Rather, in BLI, the court held

it had personal jurisdiction because the defendant knew — due to its diligence and review of PPMs

— that 95% of its funds would enter the New York securities market. See id.

The Court therefore reaches a similar conclusion. The available evidence combined with

adverse inferences drawn pursuant to the Spoilation Order show that BIL knew it directed its

investment towards BLMIS in New York. As the Liquidators noted in their Opposition, BIL,

through its alleged agent, acknowledged receipt of a PPM in the July 2003 Memorandum. See

Opp’n at 12; Flugman Decl. Ex. 6 at -659. Indeed, the July 2003 Memorandum indicates that

BLMIS held “approximately 95% of [Sentry]’s assets under custody,” and that Sentry’s fund

manager only had discretion to allocate “a portion of the Fund’s assets (never to exceed, in the

aggregate, 5% of the Fund’s Net Asset Value…) to alternative investment opportunities….”

Flugman Decl. Ex. 6 at -659, -667. Additionally, Pursuant to the Spoilation Order, the Court finds

it appropriate to infer that the spoliated evidence contained information favorable to establishing

personal jurisdiction. See Spoliation Order, ECF No. 1098. Specifically, the Court infers that the

deleted electronically stored information included certain email communications between BIL

employees and BIL customers concerning Sentry subscriptions and redemptions. See Opp’n at 5–

7. The Court also infers that such emails referenced key provisions of the PPMs available in

evidence, showing approximately 95% of the funds would arrive in the U.S. See Flugman Decl.

Ex. 6 at -659, -667 (July 2003 Memorandum); see also id. Ex. 7 at -928, -934 (October 2004 PPM).

Similarly, BIL’s diligence would indicate their investment’s ultimate destination was New York.

See Spoliation Order; see also Flugman Decl. Ex. 6 at -642 (BIL email request for the latest Sentry

PPM). Ultimately, BIL’s use of an intermediary Feeder Fund does not make its contacts any less

purposeful under these circumstances. Together, the PPM and diligence support that BNP’s

investment in the Funds was a clear directive to invest in New York-based BLMIS.

In addition to BLI, Walden also provides support for the Plaintiffs. In Walden, the Supreme

Court found that a defendant “formed no jurisdictionally relevant contacts” with the forum state

of Nevada as “[p]etitioner never traveled to, conducted activities within, contacted anyone in, or

sent anything or anyone to Nevada.” Walden, 571 U.S. at 289. The Supreme Court further stated

that it is impermissible to allow the “plaintiff’s contacts with the defendant and forum to drive the

jurisdictional analysis.” Here, the Defendant’s contacts, not the Plaintiffs’ contacts, drive the

jurisdictional analysis. BIL knowingly sent millions of dollars to New York. See Opp’n at 3; see

also Flugman Decl. Exs. 3, 10, 24 (Sentry Subscription Records). Moreover, the Defendant did

not invest with a manager who had limitless discretion to allocate capital in global securities

markets. Indeed, the situation here is the exact opposite — BIL invested millions in the Funds that

had contractual obligations to allocate the capital in the United States. See Flugman Decl. Ex. 6

at -659, -667 (July 2003 Memorandum); see also id. Ex. 7 at -928, -934 (October 2004 PPM).

These actions go beyond “knowledge of an indirect connection to New York[,]” and are purposeful

direction of conduct into the forum state and thus sufficient to meet the first requirement of specific

jurisdiction. See Walden, 571 U.S. at 286 (“[I]t is [] insufficient to rely on a defendant’s random

fortuitous, or attenuated contacts or on the unilateral activity of a plaintiff [for the exercise of

personal jurisdiction] over an out-of-state [defendant].”) (internal quotation marks omitted).

2. Defendant’s Use of Correspondent Accounts

Separately, the Plaintiffs argue that BIL’s “intentional use of U.S. correspondent accounts

… to subscribe for shares in Sentry and receive each of the at-issue redemption payments also

supports the exercise of jurisdiction.” Opp’n at 31, ECF No. 1136. “Correspondent accounts are

accounts in domestic banks held in the name of foreign financial institutions” that are used “to

effect dollar transactions.” Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 56

n.3 (2d Cir. 2012) (quoting Sigmoil Res., N.V. v. Pan Ocean Oil Corp. (Nigeria), 234 A.D.2d 103,

104, 650 N.Y.S.2d 726, 727 (1st Dept 1996)). Citing Licci IV, 732 F.3d at 171, the Plaintiffs assert

that Defendant’s use of a correspondent bank account supports jurisdiction because it was

deliberate, recurring, and related to the harm at issue. See Opp’n at 31–36.

First, as to deliberateness, Plaintiffs contend that BIL chose the Citco Subscriber’s U.S.

correspondent account for both subscription and redemption payments. See Flugman Decl. Ex. 10

at -013 (Trade Confirmation dated April 15, 2025, indicating that the Citco Subscriber had

processed BIL’s subscription request for approximately $3.3 million worth of Sentry shares), ECF

No. 1137; see also id. Ex. 1 (Redemption requests and their corresponding Confirmations of Order

Received noting that the redemption payments would be sent to the Citco Subscriber’s

correspondent account at HSBC Bank USA (“HBUS”), New York. Additionally, according to the

Plaintiffs, the Defendant’s choice to use Sentry’s U.S. correspondent account for subscription

payments also supports personal jurisdiction under Off. Comm. of Unsecured Creditors of Arcapita

v. Bahrain Islamic Bank (“Arcapita I”), 549 B.R. 56, 68-69, 70 n.18 (S.D.N.Y. 2016). Opp’n. at

35; see also Flugman Decl. Ex. 24 at -176, -177 (Sentry Subscription Record noting that BIL’s

$5,000,000 subscription payment went through Sentry’s correspondent account at HBUS in New

York).

Second, as to the recurring element of Licci IV, Plaintiffs show that the Citco Subscriber,

while acting on BIL’s behalf, had facilitated multiple Sentry subscription and redemption

transactions through Citco Bank’s correspondent account at HBUS. See Opp’n at 34–35.

Specifically, the Liquidators contend that the Citco Subscriber sent BIL’s $3,318,000.00

subscription payment to Sentry using Citco Bank’s U.S. correspondent account. Id. at 34. The

Plaintiffs also note that the Citco Subscriber “received two redemption payments from Sentry …

totaling $5,537,189.75 over two years through its U.S. account.” Id. at 34–35.; see also Flugman

Decl. Exs. 1, 11–13, 18–19 (Redemption Records). Based on precedent regarding correspondent

bank use, Plaintiffs argue that BIL’s recurring correspondent bank transactions, including through

its agent, are sufficient for jurisdiction. Opp’n at 34–35 (citing Arcapita I, 549 B.R. at 70, n.18;

Schansman v. Sberbank of Russia PJSC, 565 F. Supp. 3d 405, 414 (S.D.N.Y. 2021); Averbach v.

Cairo Amman Bank, 2020 WL 486860, at *5 (S.D.N.Y. Jan. 21, 2020)).

Finally, for the third element of Licci IV — the contacts’ relation to the harm — Plaintiffs

argue that BIL’s “use of U.S. accounts is sufficiently related to the Liquidators’ claims seeking to

recover Sentry redemption payments.” Opp’n at 35. To succeed on their constructive trust claim,

the Plaintiffs must demonstrate that BIL received inflated redemption payments. See id. at 35–36.

The Plaintiffs argue, therefore, that BIL “accomplished the wrongs for which the Liquidators seek

redress using the New York banking system to buy shares and obtain the redemption payments for

those shares the Liquidators seek to claw back. That is enough to establish jurisdiction as to those

redemptions.” Id. at 36.

In response, BIL counters that their use of U.S-based bank accounts was not a “deliberate

act of BIL.” Reply at 7, ECF No. 1249. BIL contends that, like all other Sentry redemptions that

went through Citco Bank Dublin Branch, it was “merely a matter of routine that [the Citco

Subscriber’s U.S.-based correspondent] accounts [were] used for the redemptions involving BIL.”

Id. Further, BIL also argues that the use of “New York correspondent accounts [was not]

integral—or even meaningfully significant—to the Liquidators’ constructive trust claim under

BVI law.” Id. at 8. Thus, BIL argues, because BIL’s use of U.S. correspondent accounts is not

“integral to the wrongful conduct … the alleged use of such accounts is not relevant to personal

jurisdiction.” Id.

a. Whether the Defendant’s Use of U.S.-Based Correspondent Accounts

Was Deliberate and Recurring

The Second Circuit has held that “the selection and repeated use of New York's banking

system, as an instrument for accomplishing the alleged wrongs for which the plaintiffs seek

redress, constitutes purposeful availment….” Licci IV, 732 F.3d at 171 (cleaned up). Further, the

Second Circuit clarified that, “[s]o long as this in-forum activity sufficiently reflects the

defendant's ‘purposeful availment’ of the privilege of carrying on its activities here, minimum

contacts are established, even if the effects of the defendant's entire course of conduct are felt

elsewhere.” Id. at 173. Thus, a foreign bank’s repeated use of a U.S. correspondent account to

achieve the wrong complained of satisfied the minimum contacts requirement. Id.

Like the defendant in Licci IV, BIL’s use of U.S. correspondent accounts was deliberate.

Specifically, the evidence shows that BIL, through its agent, actively selected U.S. accounts to

receive the redemption payments. See Flugman Decl. Exs. 11, 13, ECF No. 1137 (Redemption

Requests). Defendant’s argument that Sentry chose the currency misses the point. Here, the

Plaintiffs have shown that the Defendant was able to use either a foreign-based or a U.S.-based

correspondent bank account for its redemption requests and, through its alleged agent, chose the

latter. See Margolin Decl. Ex. 1 at -971 (Sentry Confirmation of Order Received to redeem

3,162.32 shares of Sentry at HBUS in New York); see also Opp’n at 33 n. 22, ECF No. 1136

(“[T]he Second Circuit has recognized that, ‘[i]n light of the widespread acceptance and

availability of U.S. currency, [a foreign bank] could have . . . processed U.S.-dollar-denominated

wire transfers . . . through correspondent accounts anywhere in the world.’”) (quoting Licci IV,

732 F.3d at 171.); see also Joyce Decl. at 6–9, ECF No. 1138.; id. at 12 (“[S]ubscription

agreements for Fairfield Sentry . . . do not contain any requirement that the subscriber utilize a

U.S. account to send subscription payments or receive redemption payments.”); id. (“Neither the

fact that Fairfield Sentry was a U.S.-dollar denominated fund, nor the fact that the subscription

agreement instructed subscribers to wire their subscription payments to Sentry’s U.S. account, nor

the fact that Sentry made redemption payments from its own U.S. account would have prevented

a subscriber from making subscription payments from and directing redemption payments to a

U.S. dollar account located outside the U.S.”); id. at 13 (“The U.S. dollar was in wide circulation

outside the U.S. during the Relevant Period, and many other payment options were widely

available and easily accessible during the Relevant Period. To the extent that a foreign subscriber

chose a U.S.-based correspondent account to effectuate their payments, it was generally for reasons

of its own convenience or financial benefit.”).

Further, BIL used the U.S.-based correspondent accounts repeatedly. The Second Circuit

has found that the selection and repeated use of in-forum correspondent accounts to perpetrate the

alleged violations supports a finding of sufficient minimum contacts. Licci IV, 732 F.3d at 171;

id. at 168 (“[A] foreign bank’s repeated use of a correspondent account in New York on behalf of

a client . . . show[s] purposeful availment of New York’s dependable and transparent banking

system, the dollar as a stable and fungible currency, and the predictable jurisdictional and

commercial law of New York and the United States.”) (quoting Licci v. Lebanese Canadian Bank,

20 N.Y.3d 327, 339, 984 N.E.2d 893, 900 (N.Y. 2012)). Here, the Liquidators have presented

evidence — which the Defendant does not dispute — that BIL used U.S. correspondent accounts

to facilitate at least one Sentry subscription payment in April 2005, and two Sentry redemption

payments during the Redemption Period. See Flugman Decl. Ex. 10 at -013 (April 2005

Subscription Confirmation); see also id. Exs. 1, 11–13, 18–19 (Redemption Records). The

Defendant’s repeated use of its alleged agent’s U.S. correspondent account is also sufficient to

meet the “recurring” prong of the Licci IV test.

The Liquidators have provided support for the allegation that the Citco Subscriber, acting

as agent of the Defendant, chose to use a correspondent account in New York to receive payments

from Sentry. See Opp’n at 12. While foreign options existed, the redemption forms show that

Defendant, through its agent, selected and used a U.S.-based correspondent bank account to

receive payments from Sentry. BIL’s repeated receipt of millions of dollars of redemption

payments for its investments in Sentry through a U.S. correspondent account demonstrates its

purposeful availment of the banking system of New York and the United States.

b. Whether the Defendant’s Use of U.S.-Based Correspondent Account

Relates to the Harm Alleged By the Liquidators

Having found that BIL’s use of a U.S.-based correspondent account was deliberate and

recurring, the Court now turns to the third Licci IV factor — relatedness to the harm. To satisfy

this factor, the suit must “arise out of or relate to the defendant’s contacts with the forum.” Ford

Motor Co. v. Montana Eighth Jud. Dist. Ct., 592 U.S. 351, 141 S. Ct. 1017, 1026 (2021) (emphasis

in original). “[P]roof that a plaintiff’s claim came about because of the defendant’s in-state

conduct” is not required. Id. at 1027. Instead, a court need only find “an affiliation between the

forum and the underlying controversy.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564

U.S. 915, 919 (2011); Picard v. BNP Paribas S.A. (In re BLMIS), 594 B.R. 167, 190 (Bankr.

S.D.N.Y. 2018) (“Where the defendant’s contacts with the jurisdiction that relate to the cause of

action are more substantial, however, it is not unreasonable to say that the defendant is subject to

personal jurisdiction even though the acts within the state are not the proximate cause of the

plaintiff's injury.”) (internal quotations omitted). This Circuit has “found that a claim arises out of

forum contacts when defendant's allegedly culpable conduct involves at least in part financial

transactions that touch the forum.” U.S. Bank Nat’l Ass’n v. Bank of Am. N.A., 916 F.3d 143, 151

(2d Cir. 2019).

Plaintiffs’ constructive trust claim has three elements: (1) a disposal of the Plaintiffs’ assets

in breach of fiduciary duty; (2) the beneficial receipt of the assets by the Defendant; and (3) that

the Defendant has knowledge it received the assets via a breach of fiduciary duty. Fairfield IV,

2021 WL 771677, at *3(quoting El Ajou v. Dollar Land Holdings Ltd. [1994] 2 All E.R. 685, 700);