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

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)

v.

ABN AMRO SCHWEIZ AG a/k/a AMRO

(SWITZERLAND) AG, et al.,

Defendants.

MEMORANDUM OPINION AND ORDER DENYING

DEFENDANT’S MOTION TO DISMISS

APPEARANCES:

HARNIK LAW FIRM

Attorneys for Vorarlberger Landes- Und Hypothekenbank AG (n/k/a Hypo Vorarlberg Bank AG)

1225 Park Avenue

New York, NY 10128

By: Stephen M. Harnik

BROWN RUDNICK LLP

Attorneys for the Plaintiffs, Joint Liquidators

Seven Times Square

New York, NY 10036

By: Jeffrey L. Jonas

David J. Molton

Marek P. Krzyzowski

JOHN P. MASTANDO III

UNITED STATES BANKRUPTCY JUDGE

I. INTRODUCTION

Pending before the Court is the motion of Vorarlberger Landes- Und Hypothekenbank AG

(n/k/a Hypo Vorarlberg Bank AG) (“Hypo” or “Defendant”), to dismiss the Fifth Amended

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

to Dismiss (the “Motion”), ECF1 No. 817. 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.

III. BACKGROUND

This adversary proceeding was filed on September 21, 2010. See ECF No. 1; see also

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”),

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

noted.

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

Liquidation) (“Lambda” and, together with Sentry and Sigma, the “Fairfield Funds” or the

“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, 205–06; id. Exs. A–C.2 Of that amount,

Defendant allegedly received over $1.8 million through redemption payments from its investment

in Sentry. Memorandum of Law in Opposition to Vorarlberger Landes- Und Hypothekenbank

AG's Motion to Dismiss the Fifth Amended Complaint (the “Opposition” or “Opp’n”) at 1, ECF

No. 1113; see also Declaration of Lena Konanova in Support of the Liquidators’ Opposition

(“Konanova Decl.”) Exs. 2, 18–27, 37, ECF No. 1114 (Redemption Records).

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.3 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.

2 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 Hypo, 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, Vorarlberger Landes

UND Hypothekenbank Aktiengesellschaft.” Am. Compl. ¶ 112, 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 Hypo.

3 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).

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 —

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

and then invests the money.”). 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

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 the 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.

Hypo is a “corporate entity organized under the laws of Austria” with a registered address

in Bregenz, Austria. Id. ¶ 112. Hypo allegedly invested into and redeemed shares of Sentry

through several companies within the Citco corporate family. Opp’n at 4-5, ECF No. 1113.

Investments into the Funds were registered in the name of Citco Fund Services (Europe) B.V., and

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

Dublin Branch (“Citco Bank”) allegedly carried out subscriptions and redemptions on behalf of

Hypo and other investors. Id. Citco Bank and Citco Global Custody (collectively, the “Citco

Subscriber”)4 served as the subscriber of record for Hypo’s shares of the Fairfield Funds. See id.

at 4-5. The Citco Subscriber was organized under the laws of either Curaçao or the Netherlands.

See Memorandum of Law in Support of Motion to Dismiss for Lack of Personal Jurisdiction (the

“Memorandum of Law” or “Mem. L.”) at 7 n.10, ECF No. 818.

Hypo invested in Sentry as early as 2005, as the custodian bank for the Premium Selection

Hedge Fund (“PSHF”), which was managed by Union Bancaire Privée (“UBP”). Opp’n at 5-6.

In connection with such investments, Hypo opened an account at Citco Bank. Id. at 8. Further,

Hypo allegedly retained the Citco Subscriber as its agent by entering into a Brokerage and Custody

Agreement (the “B&C Agreement”) as early as September 2004. Id.; see Konanova Decl. Ex. 3,

ECF No. 1114 (September 23, 2004, B&C Agreement between Hypo and Citco Bank and Citco

Global Custody N.V.). The B&C Agreement authorized Citco Bank 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 [Hypo],” or of [Citco Bank] or

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

4 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 5, ECF No. 1113. The Amended Complaint refers to the “Citco Subscribers,”

a term that is defined to include both Citco Bank and Citco Global Custody, as relevant to this motion, and other Citco

banking and custody entities. See Am. Compl. ¶ 8, ECF No. 679 (defining the Citco Subscribers to include Citco

Global Custody NV, Citco Global Custody (NA) NV, Citco Fund Services (BVI), Citco Fund Services (Europe) BV,

Citco Bank Nederland N.V., Citco Bank Nederland N.V. Dublin Branch (a wholly owned subsidiary of Citco Bank

Nederland N.V.), and the Citco Banking Corporation N.V.).

ancillary thereto as set out in [the B&C] Agreement.” Konanova Decl. Ex. 3 at -008. The B&C

Agreement further empowered and obligated the Citco Subscriber, “when instructed to do so by

[Hypo] . . . to make settlement of transactions undertaken by or for [Hypo]” and to “deliver[] or

receiv[e] the Securities or other assets of [Hypo] and mak[e] or receiv[e] payments for the account

of [Hypo].” Id. Ex. 3 at -012.

From January 2005 through April 2005, Hypo allegedly subscribed through the Citco

Subscriber for 1,383.76 shares of Sentry. See Opp’n at 6. Hypo, through the Citco Subscriber,

redeemed a total of $1,840,487.84 from Sentry through 2 redemptions from June through August

2008. See Opp’n at 11; see also Konanova Decl. Exs. 2, 18–27, 37 (Sentry Redemption Records).

At the directions and instructions of the Citco Subscriber, as the alleged agent of Hypo, both

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. 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 agents

of Hypo, “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 increasing its 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,5 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. Mem. L. at 4, ECF No. 818;

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”).

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

Am. Compl. at 1, ECF No. 679.

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. Am.

Compl. ¶ 30. 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.6 Compl. ¶¶ 63–86,

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

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 ”).7 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

6 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).

7 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).

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.

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:

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.

Id. at 301. 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 (Bankr. S.D.N.Y. 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. 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; see also Order Lifting Stay of Redeemer Actions, ECF No. 675.

C. THE PENDING MOTION

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.” 8 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).

8 As stated supra, footnote 2, 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.

The Amended Complaint alleges that the defendants, including Hypo 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.

Merits document and expert discovery is ongoing in this case. See Fourteenth Am. Scheduling

Order, ECF No. 1321; see also Fifteenth Am. Scheduling Order, ECF No. 1336.

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 1–4, 19, ECF No. 818.

The Liquidators filed an opposition to the Motion and submitted the declarations of Lena

Konanova and Sara K. Joyce in support of their opposition. See Opp’n, ECF No. 1113; Konanova

Decl., ECF No. 1114; Declaration of Sara K. Joyce (“Joyce Decl.”), ECF No. 1115.9 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 Sentry, using U.S. correspondent accounts to

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

personal jurisdiction. Opp’n at 1–4. Defendant filed a reply memorandum on July 28, 2023. Reply

9 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.

Memorandum of Law in Support of Motion to Dismiss for Lack of Personal Jurisdiction (the

“Reply”), ECF No. 1246. 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

To subject a defendant to personal jurisdiction in the United States, courts have generally

recognized that 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.’” See, e.g., 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)). Further, “[w]hen jurisdiction is satisfied through Bankruptcy Rule

7004,10 a bankruptcy court need not address its state's long-arm statute.” Picard v. Fairfield

Greenwich Grp. (In re Fairfield Sentry Ltd.), 627 B.R. 546, 565 n.12 (Bankr. S.D.N.Y. 2021)

(citing In re Lehman Bros. Holdings Inc., 535 B.R. 608, 619 (Bankr. S.D.N.Y. 2015)); see also

Owens-Illinois, Inc. v. Rapid Am. Corp. (In re Celotex Corp.), 124 F.3d 619, 630 (4th Cir. 1997).

Accordingly, in assessing personal jurisdiction for bankruptcy adversary proceedings, courts have

previously inquired into “whether the defendant has minimum contacts with the United States,

rather than with the forum state.” Fairfield Greenwich Grp., 627 B.R. at 565 n.13 (citing Lehman

Bros. Holdings Inc., 535 B.R. at 619).

However, the United States Supreme Court’s recent ruling in Fuld, et al. v. Palestine

Liberation Organization, et al., 606 U.S. __, 145 S. Ct. 2090, 2025 WL 1716140 (June 20, 2025)

10 “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).

altered the personal jurisdictional analysis, at least in certain cases. In Fuld, the Supreme Court

held that, for the purposes of determining specific personal jurisdiction:

Because the State and Federal Governments occupy categorically different

sovereign spheres, we decline to import the Fourteenth Amendment minimum

contacts standard into the Fifth Amendment. Rather, the Due Process Clause of the

Fifth Amendment necessarily permits a more flexible jurisdictional inquiry

commensurate with the Federal Government's broader sovereign authority.

Id. at *8. The Supreme Court’s ruling in Fuld essentially separated the analysis for “due process”

under the Fourteenth and Fifth Amendments. See id. Further, the Supreme Court also refrained

from promulgating a new standard that would “delineate the outer bounds of the Federal

Government’s power….” Id. at *9. This Court entered an Order Regarding Supplemental

Submissions on June 24, 2025, and directed the parties to submit supplemental briefing on the

impact of the Supreme Court’s ruling in Fuld on the pending Motion. See Order Regarding

Supplemental Submissions, ECF No. 1389. The parties filed their supplemental letter briefs on

June 27, 2025. See Plaintiffs’ Letter re: Fuld v. Palestine Liberation Organization (the “Plaintiffs’

Letter”), ECF No. 1391; Defendants’ Joint Letter re: Fuld v. Palestine Liberation Organization

(the “Defendant’s Letter”), ECF No. 1392.

In the Plaintiffs’ Letter, the Liquidators argue that the Supreme Court’s ruling in Fuld

“offered [] an alternate basis for satisfying [specific personal jurisdiction under] the Fifth

Amendment.” Plaintiffs’ Letter at 3. Specifically, the Liquidators argue that because “‘minimum

contacts’ … is not required to satisfy Fifth Amendment due process standards for personal

jurisdiction [post-Fuld,]” the Fifth Amendment’s due process standard “could be satisfied under a

mere ‘reasonable’ showing.” Id. at 2 (emphasis in original, quoting Fuld, 2025 WL1716140, at

12–13). Hypo disagrees with the Liquidators’ interpretation of Fuld, and argues in the Defendant’s

Letter that “Fuld has no impact on the pending [Motion]” because, inter alia, “[u]nlike Fuld, this

case does not involve a specific statutory conferral of jurisdiction….” Defendant’s Letter at 1, 3.

As evidenced by the parties’ arguments, the effect of the Supreme Court’s ruling in Fuld

in cases that do not involve a specific statutory conferral of personal jurisdiction will be developed

over time. Here, having considered the Supreme Court’s reasoning in Fuld, and the parties’

positions on this issue, the Court will begin its analysis by examining, as it has done in prior

opinions, the Defendant’s minimum contacts, as any defendants that have sufficient minimum

contacts with the forum would also satisfy the more flexible personal jurisdictional standards set

forth in Fuld.

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).

There are three conditions necessary for the Court to exercise specific jurisdiction11 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)

11 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 2–4 (arguing that the Court’s specific

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

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

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).

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.

Hypo 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. 818. The Plaintiffs argued before the District Court that “every relevant

component of the [redemption] transactions at issue here occurred outside the territorial

jurisdiction of the United States.” Id. at 3 (emphasis in original); 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)12 safe harbor. See Opening

12 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

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,

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)).

The Plaintiffs allege that Citco acted as an agent of the Defendant with respect to its

investments with the Fairfield Funds. See Opp’n at 2, ECF No. 1113. Many of the jurisdictional

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).

contacts that the Plaintiffs refer to rely on this agency relationship. Id. at 2–4. The Defendant

argues that the Plaintiffs’ attempt to deem the Citco Subscribers as Hypo’s agent “is diametrically

opposed to [the Plaintiffs’] own theory of the case and is precluded by this Court’s prior rulings.”

Reply at 7, ECF No. 1246. The Court has already found that “the Funds were customers of Citco

Bank who acted as their agents in connection with the securities contracts pursuant to which the

redemption payments were made ....” Fairfield III, 2020 WL 7345988, at *7. Hypo contends that

“Hypo’s relationship with the Citco Subscriber was exclusively between two foreign entities and

governed by foreign law,” and that the B&C Agreement “governing their relationship was

executed between entities based in Austria, Ireland, and the Netherlands.” Reply at 8, ECF No.

1246. Hypo further states that the B&C Agreement “does not suggest that Hypo availed itself of

the protections of U.S. law by engaging the Citco Subscriber to facilitate foreign transactions in

foreign investment funds like the Funds here.” Id. In addition, Hypo claims that Citco “chose to

designate a U.S. based (rather than foreign) correspondent bank account” and the transaction is

made “‘on behalf of UBP Union Bancaire Privée Geneve’ (PSHF’s manager), not Hypo.” Id. at

9-10. Therefore, the Defendant argues that this “incidental use of a U.S. bank account is not a

basis for jurisdiction” over Hypo. Id. Before examining whether the allegations support

jurisdiction, the Court will first consider whether the Citco Subscriber’s actions should be imputed

to Hypo.

1. Whether the Citco Subscriber Acted as an Agent of Hypo for Purposes of

Personal Jurisdiction

The Court will first address the Defendant’s argument that the Citco Subscriber was not an

agent of Hypo because it was an agent of the Fairfield Funds. The Defendant cited the Court’s

ruling in Fairfield III, 2020 WL 7345988 at *7, that “the Funds were customers of Citco Bank[,]”

and that Citco Bank “acted as their agents in connection with the securities contracts [related to]

the redemption payments …” as support for this argument. See Reply at 8, ECF No. 1246 (“[T]his

Court recognized that Citco Bank acted as the Funds’ agent, not its customers…. That ruling is

law of the case.”) (internal citations omitted). Although the Plaintiffs did not respond to this

argument, the Court will address this issue here.

Hypo apparently assumes that a party cannot be agents of multiple parties. Under this

argument, Hypo asserts that, because the Court had found that the Citco Subscriber was the Funds’

agent in facilitating the redemption payments, the Citco Subscriber could not simultaneously be

an agent of other parties in the same transactions. The Court disagrees. Indeed, the Court has

already rejected this argument in prior opinions denying other defendants’ motions to dismiss this

adversary proceeding. See Fairfield Sentry Ltd. (In Liquidation), et al. v. Credit Suisse AG, et al.

(In re Fairfield Sentry Ltd.), 665 B.R. 1, 16–17 (Bankr. S.D.N.Y. 2024); see also Fairfield Sentry

Ltd. (In Liquidation), et al. v. SIX SIS Ltd., et al. (In re Fairfield Sentry Ltd.), 668 B.R. 88, 105–

06 (Bankr. S.D.N.Y. 2025). Many courts have long recognized that, where two principals to the

same transaction do not have conflicting interests, a third-party may serve as an agent for both

principals. See, e.g., 99 Commercial Street, Inc. v. Goldberg, 811 F. Supp. 900 (S.D.N.Y. 1993)

(holding that an escrow agent can act as agent to both parties); see also Knudson v. Weeks, 394 F.

Supp. 963 (W.D. Okla. 1975) (holding that an agent may act as an agent for both parties to the

same transaction where the interest of two principals are not conflicting). Accordingly, the Court’s

holding in Fairfield III establishing the agency relationship between the Funds and the Citco

Subscriber does not necessarily bar the Plaintiffs’ allegation the Citco Subscriber served as Hypo’s

agent with respect to the redemption payments.

Courts have also recognized that a defendant “can purposefully avail itself of a forum by

directing its agents . . . to take action there.” Daimler AG v. Bauman, 571 U.S. 117, 135 n.13

(2014). In the absence of a formal agency relationship, the Court may impute an agent’s conduct

within or aimed at the forum to the principal based on “the realities of the relationship in question

rather than the formalities of agency law.” CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 366 (2d

Cir. 1986). Even a defendant that “indirectly transacts financial instruments in a forum may have

purposefully availed itself of the forum if the transactions were effected by the defendant’s agent.”

In re Eur. Gov't Bonds Antitrust Litig., 2020 WL 4273811, at *6 (S.D.N.Y. July 23, 2020).

The Court must determine whether the alleged activities of the Citco Subscriber should,

for the purposes of establishing specific personal jurisdiction in this Court, be imputed to Hypo.

“To establish an agency relationship for jurisdictional purposes, plaintiffs must show that the

alleged agent acted in [the forum] for the benefit of, with the knowledge and consent of, and under

some control by, the nonresident principal.” Hau Yin To v. HSBC Holdings, PLC, 700 F. App’x

66, 68 (2d Cir. 2017) (citing Grove Press, Inc. v. Angleton, 649 F.2d 121, 122 (2d Cir. 2018)).

The Plaintiffs argue that the Citco Subscriber’s conduct satisfies all three prongs of this test,

because “(1) the Citco Subscriber’s conduct in investing in the Funds was taken on behalf and for

the benefit of Hypo; (2) the Citco Subscriber acted at the direction and under the control of Hypo;

and (3) the Citco Subscriber acted pursuant to Hypo’s knowledge and consent.” See Opp’n at 16–

17, ECF No. 1113 (citing In re Eur. Gov’t Bonds Antitrust Litig., 2020 WL 4273811, at *6).

The Second Circuit has explained that a principal might not be charged with the acts of an

agent when that agent, “though ostensibly acting in the business of the principal, is really

committing a fraud for his own benefit, he is acting outside the scope of his agency, and it would

therefore be most unjust to charge the principal with knowledge of it.” Wight v. BankAmerica

Corp., 219 F.3d 79, 87 (2d Cir. 2000) (quoting Munroe v. Harriman, 85 F.2d 493, 495 (2d Cir.

1936)). This exception is narrow in that the Court may still charge the principal with “the acts and

knowledge of an agent as long as the agent in some respect served the principal or, stated

differently, unless the agent ‘totally abandoned’ the principal's interests and ‘acted entirely for his

own or another's purpose.’” In re Parmalat Sec. Litig., 684 F. Supp. 2d 453, 472 (S.D.N.Y. 2010)

(finding that although the agent committed fraud “during his term of employment . . . he did it

solely to benefit himself” and that the benefit to his employer was “immaterial because [employer]

was the victim of [the agent]’s fraud.”).

a. Whether the Citco Subscriber’s Conduct was Performed on Behalf

and for the Benefit of Hypo

To establish an agency relationship for purposes of personal jurisdiction, “the plaintiff must

show that the alleged agent acts ‘for the benefit of’ . . . the non-resident principal . . . .” In re

Welspun Litig., No. 16 CV 6792 (VB), 2019 WL 2174089, at *7 (S.D.N.Y. May 20, 2019) (quoting

GEM Advisors, Inc. v. Corporacion Sidenor, S.A., 667 F. Supp. 2d 308, 318 (S.D.N.Y. 2009)); see

also CutCo, 806 F.2d at 366. The Plaintiffs argue that the “on behalf/benefit of prong is satisfied

when an agent’s activities open the principal to financial gain.” Opp’n at 17, ECF No. 1113 (citing

In re Sumitomo Copper Litig., 120 F. Supp. 2d at 336 (finding defendants benefited from agent’s

trading activities, which could result in gain if financially successful); GEM Advisors, Inc., S.A.,

667 F. Supp. 2d at 319 (finding benefit where defendant “stood to benefit” from the alleged agent’s

“actions and contracts by receiving some or all of the sale price”)).

Hypo subscribed for shares in the Fairfield Funds through the Citco Subscriber to profit by

indirectly investing in BLMIS. See Opp’n at 17. Through the activities of its agent, the Citco

Subscriber, Hypo could obtain financial gain. Id. at 17-18. The Plaintiffs point to a Sentry private

placement memorandum that explains that the Sentry would seek to “‘achieve capital appreciation

of its assets through the purchase and sale of securities principally by utilizing an options trading

strategy described as ‘split strike conversion,’ which was synonymous with BLMIS.” Id. at 7

(citing Konanova Decl. Ex. 16 at -832, ECF No. 1114). Hypo was the beneficial owner of the

Sentry shares that the Citco Subscriber subscribed to pursuant to Hypo’s orders. Id. at 17.

Notwithstanding Hypo’s arguments that it did not benefit from the Sentry investments at issue, the

Citco Subscriber’s activity in relation to investing in the Funds opened Hypo, as principal, to

financial gain, as Hypo “could earn fees from PSHF” with respect to those investments. Id. at 17–

18; see Reply at 9. Therefore, the Plaintiffs’ allegations and supporting documents sufficiently

demonstrate that the Citco Subscriber — in implementing the subscription and redemption

decisions — acted on behalf of and for the benefit of Hypo in the forum.

b. Whether Hypo Both Exercised Control Over and Was Aware of and

Consented to the Citco Subscriber’s Activities

To assert an agency relationship, the principal must have exercised “some control” over

the purported agent. Scholastic, Inc. v. Stouffer, 2000 WL 1154252, at *5 (S.D.N.Y. Aug. 14,

2000). For the purposes of personal jurisdiction analysis, this control prong is satisfied when the

principal has “[an] ability . . . to influence [the agent’s] acts or decisions by virtue of the parties’

respective roles.” Id. (citing Cutco, 806 F.2d at 366). Control means the “actual exercise of

control.” Hau Yin To, 700 F. App’x at 68. However, absolute control by the principal is not

necessary. Maersk, Inc. v. Neewra, Inc., 554 F. Supp. 2d 424, 442 (S.D.N.Y. 2008). The

knowledge and consent prong is satisfied when the principal is apprised of the agent’s activities.

See Struna v. Leonardi, 626 F. Supp. 3d 657, 664 (S.D.N.Y. 2022). Because certain of the same

facts in this case bear on “knowledge and consent” and “control,” the two questions may be

considered simultaneously. See Karabu Corp. v. Gitner, 16 F. Supp. 2d 319, 326 n.6 (S.D.N.Y.

1998) (“The same considerations which lead this Court to conclude that the plaintiffs have not

satisfied the ‘control’ prong of Kreutter, indicate that plaintiffs also have not satisfied the

‘knowledge’ and ‘consent’ prongs of the agency test.”); Branham v. ISI Alarms, Inc., No. 12-CV-

1012 (ARR) (MDG), 2013 WL 4710588, at *7 (E.D.N.Y. Aug. 30, 2013).

Knowledge and consent of the principal have been found: (i) where an agent forwarded

information to the principal (Sec. Ins. Co. of Hartford v. ITA Textiles Corp., 2000 WL 1576879,

at *2–4 (S.D.N.Y. Oct. 23, 2000)); (ii) where the complaint asserts that the principal received a

policy procured by its agent with a “New York forum selection clause that [the principal] knew or

should have known was included” (Pilkington N. Am., Inc. v. Mitsui Sumitomo Ins. Co. of Am.,

2021 WL 2000371, at *9 (S.D.N.Y. May 19, 2021)); and (iii) where the principal is alleged to have

done nothing after having received a cease-and-desist letter aside from forwarding the letter to

counsel. Branham, 2013 WL 4710588, at *7.

The Liquidators argue that Hypo exercised significant control over the Citco Subscriber’s

subscription and redemption-related activities and had knowledge of and consented to those

activities such that Hypo was the principal with respect to those transactions and exercised the

requisite control over the Citco Subscriber as its agent. Opp’n at 18, ECF No. 1113. Hypo entered

into the B&C Agreement with the Citco Subscriber in September 2004, pursuant to which Hypo

appointed the Citco Subscriber to act as custodian for its investments. Id. at 9; Konanova Decl.

Ex. 3, ECF No. 1114. Under this agreement, “the Citco Subscriber could subscribe to and redeem

shares in Sentry on behalf of Hypo if and only if Hypo instructed the Citco Subscriber to execute

such transactions.” Opp’n at 18. The B&C Agreement also apparently required the Citco

Subscriber to issue preliminary and final order confirmations to Hypo and to issue a “pre-advice”

statement for each subscription or redemption. Id.; Konanova Decl. Ex. 3 at -021, -022 (B&C

Agreement); see also id. Exs. 23 & 25 (Preliminary Trade Redemption Confirmations). Based on

the foregoing and the lack of allegations that Hypo objected to these actions or instructed the Citco

Subscriber to act differently, the Plaintiffs have sufficiently alleged Hypo’s consent to the Citco

Subscriber’s actions. Having found that it is appropriate to consider the conduct of the Citco

Subscriber along with the allegations Hypo’s direct actions, the Court will examine the sufficiency

of the alleged contacts.

2. Defendant’s Use of Correspondent Accounts

The Plaintiffs point to Hypo’s choice of correspondent accounts, through its agent, as

sufficient to establish minimum contacts with the United States. See Opp’n at 28-33, ECF No.

1113. “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)). Plaintiffs

allege that Hypo, through the Citco Subscriber, its purported agent, deliberately selected and used

U.S. correspondent accounts through the Citco Subscriber’s U.S. correspondent account at HSBC

Bank USA, N.A. (“HBUS”) to effectuate the redemption payments that form the harms for which

Plaintiffs seek redress. Opp’n at 10-11, 31.

Here, the Plaintiffs have shown that the Defendant voluntarily used Citco Subscriber’s U.S.

correspondent account for both subscription and redemption payments. Opp’n at 29. Hypo —

fully aware that subscribing in Sentry shares via the Citco Subscriber would require it to use Citco

Subscriber’s U.S. correspondent account — wired its subscription money to Citco Bank’s HBUS

account to proceed with its Sentry investment orders. See id.; Konanova Decl. Exs. 9, 10, ECF

No. 1114 (Citco Bank’s acknowledgements of subscription orders and requested Hypo to wire

money to Citco Bank’s HBUS account); id. Ex. 11 (Citco Subscriber’s final trade confirmation to

Hypo). The Defendant was free to designate either a foreign-based or a U.S.-based correspondent

bank account and, through its alleged agent, chose the Citco Subscriber’s U.S.-based account at

HBUS to process Hypo’s redemption payments. Opp’n at 11; Konanova Decl. Ex. 2 (Sentry

Confirmation of Order Received to redeem 691.88 shares of Sentry at HBUS in New York); see

also Joyce Decl. at 5–9, ECF No. 1115.; id. at 12-13 (“Foreign subscribers in Fairfield Sentry were

not required to use a U.S.-based correspondent account to deliver subscription payments to

Fairfield Sentry, or to receive redemption payments. 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.”); id. at 13 (“The fact that Fairfield Sentry was a U.S.-

dollar denominated investment fund did not preclude the foreign subscribers from making use of

a correspondent account denominated in U.S. dollars but located outside the U.S. to make or

receive payments.”).

Hypo next argues that any use of correspondent accounts that may have occurred was

incidental and insufficiently related to the harm for which the plaintiffs seek redress. See Reply at

12, ECF No. 1246 (“The routing of subscription payments through the Citco Subscriber’s US

correspondent account makes no jurisdictional difference here because the Liquidators’ claims do

not arise out of relate to subscriptions or Hypo’s alleged decision to invest in Sentry.”; id. at 15

(“[T]he use of [the Citco Subscriber’s US correspondent account] was incidental, and thus not

‘sufficiently related to the harm for which the plaintiff seeks redress.’”). The Defendant claims

that the allegation here is that “the Funds’ foreign administrator miscalculated the Funds’ NAV”

when making redemption payment, and this allegation is distinct from “Hypo’s involvement in

arranging subscriptions for shares in Sentry, and Sentry’s investment with BLMIS.” Id. 13-14.

The Defendant cites the District Court’s opinion in Hau Yin To, v. HSBC Holding, PLC, 2017 WL

816136, at *6–*7, n. 6 (Bankr. 2017), aff’d, 700 F. App’x. 66 (2d. Cir. 2017), in support of this

argument. In Hau Yin To, the Second Circuit affirmed an earlier ruling by the District Court,

which had held that the defendants’ passive use of a U.S.-based correspondent account was not a

sufficient basis to confer personal jurisdiction over those defendants. 700 F. App’x at 69; see also

Hau Yin To, 2017 WL 816136. Contrary to the Hypo’s argument, the District Court’s opinion in

Hau Yin To does not support the Defendant’s assertion here. As the District Court noted in its

opinion in Hau Yin To, the “wiring of funds through New York” by certain foreign defendants —

fund custodians that facilitated the fund transfers between BLMIS and its feeder funds — was

“passive” and “incidental” because “the passage of money through the U.S. bank accounts …[was]

not specifically directed by [the defendants] to facilitate the [BLMIS] Ponzi scheme.” See Hau

Yin To, 2017 WL 816136 at *7, n. 6.

Here, unlike the plaintiffs in Hau Yin To, the Liquidators do not allege that the Defendant,

through its alleged agents, used U.S.-based correspondent accounts to facilitate the BLMIS Ponzi

scheme. Instead, the Liquidators are seeking the imposition of a constructive trust related to

numerous parties — including the Defendant — because the parties, through their alleged agents,

requested and received redemption payments while knowing that the NAV was inflated. See Am.

Comp. ¶¶ 205–216, ECF No. 679. Therefore, the Defendant’s use of a U.S.-based correspondent

account through its alleged agent for receiving redemption payments is an integral part of the

Liquidators’ claim. Moreover, the Plaintiffs have shown that the Defendant had the option to use

a foreign correspondent account for its redemption requests, but instead used the U.S.-based

correspondent account through its alleged agent. See Konanova Decl. Exs. 18–21 (Sentry

Redemption Confirmations and Acknowledgments).

The Plaintiffs allege that Defendant has redeemed its investment in Sentry and received

two redemption payments from Sentry that the Citco Subscriber requested to be sent to a

correspondent account at HBUS. See Opp’n at 3. The Plaintiffs also support their allegations with

certain redemption requests and order confirmations that correspond to certain redemption

payments. See Konanova Decl. Exs. 2, 18–27, 37 (Redemption Records and Order

Confirmations).

Indeed, this was no passive endeavor; the Plaintiffs allege that Defendant and its agent

“deliberate[ly] and frequent[ly] used U.S. accounts to facilitate the investments and the redemption

transfers” with Sentry. Opp’n at 36. Defendant did so using U.S.-based correspondent accounts

on four occasions to make two subscription payments and to receive two redemption payments

worth $1,840,487.84 in total from Sentry. See id. at 3; see also Konanova Decl. Exs. 2–3, 9–11,

18–27, 37–40 (Subscription and Redemption Records). The Defendant actively selected the

correspondent account as a means of moving redemption funds through New York. See Joyce

Decl. at 8–9 (listing multiple “correspondent banks offer[ing] U.S. dollar correspondent accounts

located outside of the U.S.” during the relevant period). Defendant was free to designate an

account of its choice, inside the United States or outside, to effectuate transfers and chose one

based in the U.S. to receive redemption payments. See id. at 9–11 (“Factors Influencing Choice

of Correspondent Account”).

Hypo, through its agent, accomplished the conduct at the heart of the Liquidators’ claims

regarding payments from Sentry through its use of the U.S.-based correspondent accounts. The

Second Circuit has found 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 (quoting Licci v. Lebanese Canadian Bank, 20 N.Y.3d 327, 339, 984 N.E.2d

893, 900 (N.Y. 2012) (“[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.”); see also Spetner v. Palestine Investment

Bank, 70 F.4th 632, 640 (2d Cir. 2023) (“[A] defendant foreign bank’s ‘repeated use of a

correspondent account in New York on behalf of a client . . . can constitute transacting business

for purposes of § 302(a)(1), even if the defendant has no other contacts with the forum.”).13

Moreover, as this Court has previously noted, the New York Court of Appeals has held that a

course of dealing between two foreign entities can be established through “14 currency exchange

transactions” made through a New York bank, where the entities had made “five prior similar

transactions” through the same bank. Rushaid v. Pictet & Cie, 28 N.Y.3d 316, 325–26 (2016)

(discussing Indosuez Intl. Fin. v. National Reserved Bank, 98 N.Y.2d 238 (2002)); see, e.g.,

Fairfield Sentry Ltd. (In Liquidation), et al. v. SIX SIS Ltd. (In re Fairfield Sentry Ltd.), 668 B.R.

at 107. However, in finding a course of dealing with the forum, the specific number of transactions

is not the sole consideration; rather, “the quantity and quality of a foreign bank’s contacts with

the correspondent bank must demonstrate more than banking by happenstance.” Rushaid, 28

N.Y.3d at 327. Therefore, a course of dealing may be established through fewer forum

transactions, if such transactions could demonstrate purposeful availment of the forum. See id. at

327–29.

Here, 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

13 Section 302(a)(1), New York’s long-arm statute, “authorizes personal jurisdiction over a foreign defendant

for causes of action that arise out of ‘transact[ing] any business within the state,’ whether in person or through an

agent.” 70 F.4th at 640 (quoting C.P.L.R. § 302(a)(1)).

payments from Sentry. See Opp’n at 13 (“[T]he Citco Subscriber made the choice to use a U.S.

account and instructed [Sentry] that the [redemption] payments be sent that account.”). While

foreign options existed, the redemption forms show that Defendant selected and used a U.S.-based

correspondent bank receive payments from Sentry. Joyce Decl. at 6 –9, 11–13; see Opp’n at 9

(“[T]he redemption request required the Citco Subscriber to designate an account at which it

wished to receive Hypo’s redemption payments. . . and the Citco Subscriber again chose to

designate a U.S.-based (rather than foreign) correspondent bank account.”). Hypo’s receipt of

almost two million dollars of redemption payments for its investments in Sentry through U.S.

correspondent accounts demonstrates its purposeful availment of the banking system of New York

and the United States.

3. Defendant’s Business Contacts with the Forum

The Liquidators assert that “Hypo intentionally invested in BLMIS feeder funds Sentry

knowing that Sentry was designed to subsequently invest that money in New York-based BLMIS.

Hypo is subject to this Court’s jurisdiction with respect to its Sentry redemptions as a result of that

conduct.” Opp’n at 20, ECF No. 1113. Defendant describes the allegations concerning

Defendant’s subscription payments into the Sentry for the purpose of investing in BLMIS as the

unilateral activity of a third-party, which Defendant argues is not appropriate to consider under

Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417 (1984). Mem. L. at 16–17,

ECF No. 818; see also Reply at 10, ECF No. 1246.

In Helicopteros, the Supreme Court found that “mere purchases, even if occurring at

regular intervals, are not enough to warrant a State’s assertion of in personam jurisdiction over a

nonresident corporation in a cause of action not related to those purchase transactions.”

Helicopteros, 466 U.S. at 418. The Supreme Court found that “one trip” to the forum “for the

purpose of negotiating the transportation-services contract . . . cannot be described or regarded as

a contact of a ‘continuous and systematic’ nature . . . .” Id. at 416. The Liquidators, however,

have described more substantial contacts here.

First, the Liquidators point to a private placement memorandum (“PPM”) given to Hypo

by the Fairfield Funds’ U.S.-based manager, the Fairfield Greenwich Group (“FGG”). Konanova

Decl. Ex. 3 at -228–-245. When the Citco Subscriber began investing in Sentry on Hypo’s behalf,

Hypo signed a so-called long form subscription agreement specific to Sentry, which required Hypo

to affirm that it “received and read a copy of the [PPM]”. See Opp’n at 7; Konanova Decl. Ex. 8

at -407. The PPM highlighted that Sentry’s business objective was to “achieve capital appreciation

of its assets through … an option trading strategy described as ‘split strike conversion’” — a

strategy that the Liquidators described as “synonymous with BLMIS.” Konanova Decl. Ex. 16 at

-832; see Opp’n at 7. The PPM also made clear that BLMIS “ha[d] approximately 95% of

[Sentry’s] assets under custody[.]” Konanova Decl. Ex. 16 at -846. These documents show that

Defendant was aware at the time that its investments in the Fairfield Funds were effectively

investments in BLMIS in New York. Hypo, through its agent, the Citco Subscriber, executed

subscriptions into Sentry with this knowledge. See Konanova Decl. Ex. 8 (Sentry Long Form

Subscription Agreement, dated January 18, 2005); id. Ex. 16 (July 2003 Sentry PPM).

In August 2018, this Court held that it does not have personal jurisdiction over certain

defendants due to subscription agreements that provided for consent to jurisdiction in New York

for claims “with respect to [the Subscription] Agreement and the Fund.” Fairfield I, 2018 WL

3756343, at *11. The Liquidators here rely on the subscription agreements and private placement

memoranda not to show consent, but to show that when Defendant invested in Sentry it did so

knowing that it would avail itself of the benefits and protections of New York. Opp’n at 20-28.

The Plaintiffs have supplied further support for the allegations of contacts. Exhibits

indicate that Hypo conducted extensive due diligence prior to and during the subscription period,

which information informed it of the relationship between the Fairfield Funds and BLMIS at the

time it instructed the Citco Subscriber to invest in the Funds during the relevant period. See Opp’n

at 23–25; see also Konanova Decl. Ex. 12 (November 2024 email from a Hypo employee to an

FGG U.S. employee inquiring about “subscrip[tion] into the new FAIRFIELD CLASS C” and

requesting “a detailed fund description….”); id. Ex. 15 at -791 (FGG U.S. employee explained

that “[t]here is only one class of shares in Fairfield Sentry Limited,” and did not comment on

Hypo’s understanding that Sentry was a feeder fund into BLMIS); see also id. Exs. 28, 29 (October

5 letter from FGG explaining at least 95% of assets were invested with BLMIS); id. Ex. 34 (June

2006 letter from FGG providing more shareholder information on Sentry’s 95/5 structure).

Therefore, the Court finds that the allegations and documentation provided by the Plaintiffs

through jurisdictional discovery, taken together, sufficiently demonstrate facts supporting

continuous and systemic contacts with the forum.

4. Whether the Defendant’s Contacts are Otherwise Appropriate to Support

the Court’s Exercise of Personal Jurisdiction

The Court will address Hypo’s remaining arguments that the alleged contacts are not

jurisdictionally relevant under Supreme Court precedent. Reply at 10-12, ECF No. 1246.

Defendant argues that the Plaintiff’s allegation that Citco Brokerage Customers knew funds would

mainly be invested in BLMIS accounts in New York is irrelevant to jurisdiction over Hypo. Id.

Defendant further argues that because the Supreme Court held in Helicopteros that “the unilateral

activity of another party or a third person is not an appropriate consideration when determining

whether a defendant has sufficient contacts with a forum State[,]” this Court should reject the

Plaintiffs’ attempt to “satisfy the defendant-focused ‘minimum contacts’ inquiry by demonstrating

contacts between the plaintiff (or third-parties) and the forum State[]” under Walden v. Fiore, 571

U.S. 277, 284 (2014). Id.

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.” Id. As the Supreme Court explained,

the “plaintiff cannot be the only link between the defendant and the forum,” and “the defendant’s

conduct . . . must form the necessary connection with the forum State.” Id. at 285. Nevertheless,

personal jurisdiction may be found even where a “defendant's contacts with the forum State may

be intertwined with his transactions or interactions with the plaintiff or other parties.” Id. at 286.

The Plaintiffs’ allegations and supporting evidence of intentional investments into BLMIS

in New York, selection and use of U.S.-based correspondent accounts, and communications with

FGG U.S. employees, demonstrate that Hypo took affirmative actions on its own apart from the

conduct of the Plaintiffs. See Opp’n at 25-26, ECF No. 1113. The Liquidators have shown that

the Defendant knew and intended that, by investing in the Funds, Defendant’s money would enter

into U.S.-based BLMIS. Id. at 20-28; see also Konanova Decl. Ex. 8 (Sentry Long Form

Subscription Agreement); id. Ex. 16 (July 2003 Sentry PPM). This certainty can be found in the

Fairfield Funds’ contractual obligation to invest at least 95% of the money they received in U.S.-

based BLMIS. See Konanova Decl. Exs. 28, 29 (October 5 letter from FGG explaining at least

95% of assets were invested with BLMIS). Moreover, the Plaintiffs have alleged that the

Defendant, through its agent, conducted due diligence investigations and benefited from the

materials that it received from FGG which confirmed the investments would be made with BLMIS

in New York. Opp’n at 23-25.

The Court thus finds that Defendant’s selection and use, through its agent, of U.S.

correspondent accounts, due diligence, and communications with FGG concerning investments

with BLMIS in New York support the Court’s exercise of jurisdiction over the claims for receiving

redemption payments from the Fairfield Funds with the knowledge that the NAV was wrong. The

contacts are not random, isolated, or fortuitous. The contacts demonstrate Hypo’s purposeful

activities aimed at New York in order to effectuate transfers from Sentry. The Plaintiffs have thus

provided evidence sufficient to support a prima facie showing that the Defendant had minimum

contacts with the forum. Accordingly, the Court finds that the Defendant’s conduct would also

satisfy the “more flexible jurisdictional inquiry” under the Fifth Amendment. See Fuld, 2025 WL

1716140, at *8.

C. WHETHER THE CLAIM ARISES OUT OF OR RELATES TO THE

DEFENDANT’S FORUM CONDUCT

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, 362, 141 S. Ct. 1017, 1026, 209 L. Ed.

2d 225 (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).

The Defendant argues that Liquidators’ claims do not arise out of or relate to subscriptions

or Hypo’s alleged decision to invest in the Funds and that. Opp’n at 9-10. The Defendant also

claims that the Liquidators fail to provide sufficient evidence to establish jurisdiction over Hypo

because Hypo “contact[ed] FGG evidently not for itself but on behalf of the PSHF to inquire about

investment opportunities.” Id. at 4, 12–14. However, the Liquidators seek imposition of a

constructive trust on funds received with knowledge that the NAV was inflated. See Am. Compl.

¶¶ 205–16, No. 679. The issue of knowledge of the inflated NAV is inextricably tied to the

Defendant’s investments with New York-based BLMIS. It is immaterial that Hypo may have

invested in Sentry on behalf of certain beneficial shareholders, as the allegations are directly

related to Defendant’s investment activities with BLMIS through the Fairfield Funds. Id. ¶ 207.

The Defendant’s contacts with the United States, in investing in, in communications with, and

redemptions from the Fairfield Funds, form a “sufficiently close link” between the defendant, the

forum and the litigation concerning Defendant’s activities in the forum. See MSP Recovery

Claims, Series LLC v. Takeda Pharm. Am., Inc., 2021 WL 4461773, at *3 (S.D.N.Y. Sept. 29,

2021) (quoting Ford Motor Co., 141 S. Ct. at 1032).

D. WHETHER ASSERTION OF PERSONAL JURISDICTION IS

REASONABLE

If a defendant has sufficient minimum contacts, then the Court must ask “whether the

assertion of personal jurisdiction comports with ‘traditional notions of fair play and substantial

justice’ — that is, whether it is reasonable under the circumstances of the particular case.” Bank

Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 129 (2d Cir. 2002) (quoting

Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 568 (2d Cir. 1996)); see also Burger

King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985). Where the plaintiff “makes the threshold

showing of the minimum contacts required for [exercising personal jurisdiction], a defendant must

present a compelling case that the presence of some other considerations would render jurisdiction

unreasonable.” MSP Recovery Claims, Series LLC, 2021 WL 4461773, at *3 (quoting Bank

Brussels Lambert, 305 F.3d at 129). Factors the Court will consider include the burden on the

defendant, the interests of the forum in adjudicating the case, the plaintiff’s interest in obtaining

convenient and effective relief, the interstate judicial system’s interest in obtaining the most

efficient resolution of controversies, and the shared interest of the states in furthering fundamental

substantive social policies. Id. Indeed, the Supreme Court also evaluated several of these

reasonableness factors in Fuld, after it noted that “the Fifth Amendment might entail [an] inquiry

into the reasonableness of the assertion of jurisdiction in the particular case.” See Fuld, 2025 WL

1716140, at *11–12.

The Defendant argues that the interests of the United States in this dispute is minimal

because “this case is not about an unlawful ‘scheme’” but about “Citco Fund Services allegedly

miscalculating the Funds’ NAV in breach of fiduciary duties arising under foreign law, and Hypo’s

purported agents’ alleged knowledge of that fact” — “none of those parties is alleged to have

violated U.S. law.” Reply at 17, ECF No. 1246.

However, courts have recognized that the United States has a strong interest in ensuring

the integrity of its financial systems. See, e.g., Licci IV, 732 F.3d at 174 (“[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.”).

This Court has also repeatedly emphasized such interest in other adversary actions related to the

BLMIS Ponzi scheme. See Fairfield Sentry Ltd. (In Liquidation), et al. v. HSBC Securities

Services (Luxembourg) S.A., et al. (In re Fairfield Sentry Ltd.), 658 B.R. 257, 277 (Bankr.

S.D.N.Y. 2024); see also Fairfield Sentry Ltd. (In Liquidation), et al. v. UBS Europe SE,

Luxembourg Branch, et al. (In re Fairfield Sentry Ltd.), 657 B.R. 1, 23 (Bankr. S.D.N.Y. 2024).

Defendant further argues that the Liquidators, by continuing the litigation in New York

“after unfavorable rulings in their home jurisdiction of the British Virgin Islands,” are attempting

to “evade the forum whose law governs.” Reply at 18. In support of this argument, Hypo

emphasizes that “the Liquidators have no explained why … Hypo could not be held accountable

in another forum.” Id. Hypo also argues that “allowing a New York court to exercise personal

jurisdiction over Hypo in a suit involving foreign law, foreign entities, and the alleged bad faith of

another foreign entity runs counter to reasonable expectations.” Id. at 18.

The Court disagrees. Here, the Defendant presumes but fails to establish that the Plaintiffs

have no legitimate interest in obtaining relief in the United States — especially considering that

this dispute stems from a Chapter 15 proceeding that has intimate connections to the New York-

based BLMIS Ponzi scheme. Defendant has not demonstrated how this forum would fail to

provide effective relief. See MSP Recovery Claims, Series LLC, 2021 WL 4461773, at *3. Hypo

does not explain what interest is impaired by precluding adjudication in another forum or why that

interest outweighs other factors in favor of exercising jurisdiction. See In re Bernard L. Madoff

Inv. Sec. LLC, No. 22 CIV. 6561 (LGS), 2023 WL 395225, at *6 (S.D.N.Y. Jan. 25, 2023).

Finally, Hypo argues that Hypo’s “lengthy and continued involuntary participation” in

litigating this dispute in New York is burdensome for the Defendant because “the evidence and

witnesses are located abroad” and there are “language barriers and evidentiary-access issues[.]”

Reply at 18-19. Additionally, the Defendant argues that ongoing litigation in New York presents

“the possibility of discovery-derived criminal or civil liability abroad[,]” which Hypo argues

would be another “cognizable burden” weighing against the Court’s exercise of personal

jurisdiction over the Defendant. Id. at 18.

In 2012, this Court granted in part and denied in part a motion seeking relief as to the order

staying the action and seeking expedited initial disclosures on certain beneficial holders. See

Bench Ruling, Adv. Pro. No. 10-03496, ECF No. 799 (the “July 2012 Bench Ruling”). The Court

stated in that ruling that it was “hard-pressed to find any compelling United States’ interest in

mandating discovery here at this juncture of the pending litigation.” Id. (emphasis added).

Although the defendants before this Court in 2012 were able to describe “the strong and undeniable

interest of many nations in enforcing their banking secrecy laws” and “significant bank customer

confidentiality laws of no fewer than 30 countries, attested to by numerous declarations of foreign

law experts and letters submitted by foreign governments” that could have been implicated or

broken by complying with the Court’s prior order, Hypo now describes a potential exposure to

liability under foreign laws. Id.; Reply at 18. This Court lifted the stay and required the Defendant

to proceed to discovery in 2021. See Order Lifting Stay, ECF No. 675. The July 2012 Bench

Ruling shows that this Court can alleviate specific burdens identified by a defendant. However,

the mere potential for exposure to unspecified liability is not a burden that renders exercise of

jurisdiction unreasonable.

The Defendant has demonstrated that this Court’s exercise of jurisdiction over it may

impose a minimal burden in terms of requiring it to “traverse the distance” to the forum. However,

“[e]ven if forcing the defendant to litigate in a forum relatively distant from its home base were

found to be a burden, the argument would provide defendant only weak support, if any, because

the conveniences of modern communication and transportation ease what would have been a

serious burden only a few decades ago.” Chloé v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158,

173 (2d Cir. 2010); see also In re Platinum & Palladium Antitrust Litig., 61 F.4th 242, 273 (2d

Cir. 2023). The Defendant has not established that the Court’s exercise of personal jurisdiction

over it would be unreasonable. Further, Hypo is represented by U.S. counsel and the United States

has a strong interest in ensuring the integrity of its financial systems. The Court thus finds that

exercising jurisdiction over the Defendant is reasonable and comports with “traditional notions of

fair play and substantial justice . . . .” See Int'l Shoe, 326 U.S. at 316, 66 S. Ct. 154.

V. CONCLUSION

For the foregoing reasons, the Court DENIES the Defendant’s Motion to Dismiss the

Amended Complaint. The Liquidators shall submit a proposed order consistent with the findings

in this decision in accordance with Local Bankruptcy Rule 9074-1.

IT IS SO ORDERED.

Dated: July 29, 2025

New York, New York

/s/ John P. Mastando III ______________________

THE HONORABLE JOHN P. MASTANDO III

UNITED STATES BANKRUPTCY JUDGE