# Picard, as Trustee for the Liquidation of Bernard v. Square One Fund Ltd.

> United States Bankruptcy Court, S.D. New York · September 22, 2025

URL: https://www.frixlaw.com/law-library/cases/11142325

## Case

- **Court:** United States Bankruptcy Court, S.D. New York
- **Decided:** September 22, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES INVESTOR PROTECTION
CORPORATION,
No. 08-01789 (LGB)
Plaintiff-Applicant,
v. SIPA LIQUIDATION

BERNARD L. MADOFF INVESTMENT (Substantively Consolidated)
SECURITIES LLC,
Defendant.
In re:

BERNARD L. MADOFF,

Debtor.
IRVING H. PICARD, Trustee for the
Liquidation of Bernard L. Madoff Investment
Securities LLC, and Bernard L. Madoff, Adv. Pro. No. 10-04330 (LGB)

Plaintiff,
v.

SQUARE ONE FUND LTD.,

Defendant.

MEMORANDUM OPINION
APPEARANCES
BAKER & HOSTETLER, LLP
Special Counsel for Irving H. Picard, Trustee
600 Anton Boulevard
Suite 900
Costa Mesa, CA 92626
By: Marco Molina
Victoria Stork
HON. LISA G. BECKERMAN
UNITED STATES BANKRUPTCY JUDGE

This adversary proceeding (the “Adversary Proceeding”) arises from the approximately
$65 billion Ponzi scheme perpetrated by Bernard L. Madoff (“Madoff”) through Bernard L.
Madoff Investment Securities LLC (“BLMIS”). On November 29, 2010, Plaintiff Irving H. Picard
(the “Trustee” or “Plaintiff”), as the trustee for the substantively consolidated liquidation of
BLMIS, under the Securities Investor Protection Act, 15 U.S.C. §§ 78aaa, et seq. (“SIPA”), and
the estate of Bernard L. Madoff, filed his initial complaint (the “Complaint”), initiating the
Adversary Proceeding against Defendant Square One Fund, Ltd. (“Square One” or “Defendant”).
Compl., Dkt. No. 1.
Before the Court is the Trustee’s motion for summary judgment (the “Motion for Summary
Judgment”) seeking avoidance of initial transfers and awarding judgment in the Trustee’s favor in
the amount of $6,410,000 plus prejudgment interest. Pl’s. Mot. Summ. J., Dkt. No. 329. For the
reasons set forth in this decision, the Trustee’s Motion for Summary Judgment is granted.
I. Procedural History
A. The Trustee’s Pleadings
The Trustee’s initial Complaint sought recovery of avoidable transfers of Customer
Property1 (the “Transfers”) that Square One received from BLMIS between December 15, 1998
and December 11, 2008 (the “Relevant Period”). Compl. ¶ 4, Dkt. No. 1. Following the filing of

the Complaint (Id.) and the Trustee’s motion to extend time (Mot. Extend Time, Dkt. No. 2), the
Court entered an order extending time for service of a summons and for Defendants to serve an
answer (Order, March 10, 2011, Dkt. No. 4). On August 28, 2014, the Trustee filed a motion to
replead and a request for limited discovery with a supporting memorandum of law and declaration

1 SIPA § 78lll(4).
(the “Omnibus Motion”) (Mot. Replead, Dkt. Nos. 70-71; Griffin Decl., Aug. 28, 2014, Dkt. No.
72), which Square One opposed insofar as the Trustee requested discovery pertinent to the issue
of good faith (Opp’n. Mot. Replead, Dkt. No. 128). The Trustee filed a reply to the Omnibus
Motion regarding the discovery issue (Trustee Reply, Dkt. No. 132) and two declarations in support

of its reply (Simon Decl., Dkt. No. 133; Griffin Decl., Nov. 20, 2017, Dkt. No. 134). On June 19,
2018, the Court entered an order denying the Trustee’s Omnibus Motion regarding its request for
expedited discovery. Order, June 19, 2018, Dkt. No. 149; Ct. Decision, June 5, 2018, Dkt. No. 148.
On November 21, 2018, the Court entered an order approving the Parties’ stipulation to extend
time for the Defendant to answer, move, or otherwise respond. Order, Nov. 21, 2018, Dkt. No. 165.
The same day, the Court entered an additional order approving the Parties’ stipulation to allow the
Trustee to file an amended complaint. Order, Nov. 21, 2018, Dkt. No. 166. On December 21, 2018,
the Trustee filed an Amended Complaint (the “Amended Complaint”). Am. Compl., Dkt. No. 167.
The Amended Complaint sought the avoidance and recovery of transfers to Square One from
BLMIS, totaling $25,852,737, between December 15, 1998 and December 11, 2008 (the “Filing

Date”). Am. Compl. ¶ 2, Dkt. No. 167.
B. Motion to Dismiss
On February 14, 2019, Square One filed a Motion to Dismiss the Amended Complaint (the
“Motion to Dismiss”). Mot. Dismiss, Dkt. No. 170. On April 1, 2019, the Trustee filed an
opposition to the Motion to Dismiss. Opp’n. Mot. Dismiss, Dkt. No. 171. On April 30, 2019,
Square One filed a reply in support of its Motion to Dismiss. Reply Mot. Dismiss, Dkt. No. 173.
On June 13, 2019, the Court entered an order (the “Motion to Dismiss Order”) granting in part and
denying in part Square One’s Motion to Dismiss, referencing its discussion during a hearing on
the Motion to Dismiss held on May 29, 2019. Order, June 13, 2019, Dkt. No. 177. The Motion to
Dismiss Order limits the scope of this Adversary Proceeding to the claim for relief seeking
avoidance of $6,410,000 in transfers pursuant to section 548(a)(1)(A) of Title 11 of the United
States Bankruptcy Code (the “Bankruptcy Code”), and recovery under section 550(a) of the
Bankruptcy Code. Dkt. No. 177; Am. Compl. ¶¶ 191-96.

C. Case Management Plans and Discovery
On July 16, 2019, the Court additionally entered an Order approving an initial Case
Management Plan (the “Initial Case Management Plan”). Order, July 16, 2019, Dkt. No. 178. The
Initial Case Management Plan set a fact discovery deadline of July 30, 2021 and an expert
discovery deadline of March 30, 2022, and it stipulated to the use of a discovery arbitrator to
resolve discovery disputes that Parties were unable to resolve by meeting and conferring. Id. The
Court entered additional case management plans stipulated by the Parties extending both the fact
discovery and expert discovery deadlines and/or the deadlines to serve document requests,
interrogatories, and requests for admission. Am. Case Management Plan, Dkt. No. 230; Second
Am. Case Management Plan, Dkt. No. 245; Third Am. Case Management Plan, Dkt. No. 249;

Fourth Am. Case Management Plan, Dkt. No. 260. Fifth Am. Case Management Plan, Dkt. No.
269. Sixth Am. Case Management Plan, Dkt. No. 281. The Fourth Amended Case Management
Plan extended the fact discovery deadline to March 31, 2023. Dkt. No. 260.
On March 31, 2023, the Trustee brought forth a claim for sanctions for spoliation against
Square One (the “Spoliation Sanctions Claim”) which Square One opposed. Molina Decl., March
31, 2023, Dkt. No. 265; Resp. to Molina Decl., Dkt. No. 267. Upon requests from both parties, the
Court appointed a discovery arbitrator on June 30, 2023. Order, June 30, 2023, Dkt. No. 279; see
also Notice of Presentment, May 25, 2023, Dkt. No. 270; Obj. Notice of Presentment, May 26,
2023, Dkt. No. 272; Trustee Reply, June 2, 2023, Dkt. No. 274. The Sixth Amended Case
Management Plan included provisions pertaining to the Spoliation Sanctions Claim and dictated
further extension of the expert discovery deadlines pending the issuance of a decision by the
discovery arbitrator. Dkt. No. 281. On August 27, 2024, the discovery arbitrator determined that
the Trustee may present evidence of spoliation to a finder of fact and submit an application for fees

but otherwise denied the request for sanctions. Disc. Arbitration Order, Aug. 27, 2024, Dkt. No.
311. The Court entered an Order approving a Seventh Case Management Plan as stipulated by the
Parties, extending the expert discovery deadline to June 23, 2025 on December 2, 2024. Order,
Dec. 2, 2024, Dkt. No. 312. On December 12, 2024, the discovery arbitrator approved an award
for the Trustee of attorney’s fees and costs (the “Fee Order”). Disc. Arbitration Order, Dec. 12,
2024, Dkt. No. 315. On July 25, 2025, the discovery arbitrator denied the Trustee’s motion for
sanctions against Square One for noncompliance with the Fee Order, finding that Square One
satisfied its burden of showing its “complete inability, due to poverty or insolvency, to comply
with an order to pay court-imposed monetary sanctions.” Disc. Arbitration Order, July 25, 2025,
Dkt. No. 341.

D. Square One’s Pleadings
Following the entry of the Initial Case Management Plan, Square One filed its answer to
the Amended Complaint on July 19, 2019. Answer, Dkt. No. 179. The Parties stipulated to allow
Square One to file an amended answer to the Amended Complaint, and on February 28, 2022,
Square One filed an Amended Answer (the “Amended Answer”). Am. Answer, Dkt. No. 240; see
also Stipulation, Feb. 28, 2022, Dkt. No. 239. Square One later filed a Statement indicating that it
will cease active defense of the Adversary Proceeding (the “Square One Statement”), but that it
does not withdraw its Amended Answer or any affirmative defenses stated therein. See Square One
Statement, March 4, 2025, Dkt. No. 318. Square One asserted four affirmative defenses in its
Amended Answer: 1) that the Trustee’s Amended Complaint fails to state a claim upon which relief
can be granted; 2) that the Trustee’s claims are barred to the extent the claims or allegations therein
have been dismissed by the Court; 3) that Square One took for value and in good faith within the
meaning of 11 U.S.C. § 548(c); and 4) that the Trustee’s claims are barred by the Bankruptcy

Code’s safe harbor provision under 11 U.S.C. § 546(e). Am. Answer ¶¶ 62-65.
E. The Trustee’s Motion for Summary Judgment
The Motion for Summary Judgment asks the Court to grant the Trustee summary judgment
on its section 548(a)(1)(A) claim, avoiding the initial transfers between BLMIS and Square One,
and enter judgment in favor of the Trustee in the amount of $6,410,000 plus prejudgment interest.
Dkt. No. 329. In support of the Motion for Summary Judgment, the Trustee filed a Statement of
Material Facts (the “Trustee Statement of Facts”). Dkt. No. 330. In further support of the Motion
for Summary Judgment, the Trustee filed the Declaration of Marco Molina (the “Molina Decl.”)
(Dkt. No. 331), the Declaration of Dr. Steve Pomerantz (the “Pomerantz Decl.”) (Dkt. No. 332),
the Declaration of Lisa M. Collura (the “Collura Decl.”) (Dkt. No. 333), the Declaration of Bruce

G. Dubinsky (the “Dubinsky Decl.”) (Dkt. No. 334), and the Declaration of Matthew B. Greenblatt
(the “Greenblatt Decl.”) (Dkt. No. 335), (collectively, the “MSJ Declarations”). While it asserted
defenses in its Amended Answer, Square One did not otherwise file an opposition to the Motion
for Summary Judgment. On July 30, 2025, the Court held a Hearing on the Motion for Summary
Judgment (the “MSJ Hearing”), during which counsel for Square One did not appear.
The Court has considered Defendant’s Amended Answer, the Square One Statement, the
Motion for Summary Judgment and Trustee Statement of Facts, and the MSJ Declarations, all
exhibits attached to the MSJ Declarations, the oral argument of parties, including oral argument at
the MSJ Hearing, and has reviewed the cases cited to in the pleadings.
II. SUMMARY JUDGMENT STANDARD
Federal Rule of Civil Procedure 56 (“Rule 56”) is applicable to this Adversary Proceeding
by virtue of Bankruptcy Rule 7056. FED. R. BANKR. P. 7056. Pursuant to Rule 56, summary
judgment is appropriate when a review of the entire record demonstrates “that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R.
CIV. P. 56(a). The moving party “bears the burden of establishing that no genuine issue of material
fact exists” and that the undisputed facts entitle the movant to judgment as a matter of law. See
Morales v. Holder, 351 F. App’x 554, 555 (2d Cir. 2009) (quoting Rodriguez v. City of N.Y., 72
F.3d 1051, 1060–61 (2d Cir. 1995)).
If the moving party satisfies this burden, “the nonmoving party must come forward with
admissible evidence sufficient to raise a genuine issue of fact for trial to avoid summary judgment.”
Saenger v. Montefiore Med. Ctr., 706 F. Supp. 2d 494, 504 (S.D.N.Y. 2010) (citation and internal
quotation marks omitted). “[A] party may not rely on mere speculation or conjecture as to the true
nature of the facts to overcome a motion for summary judgment,” and rather must establish the

existence of a genuine issue of fact by “citing to particular parts of materials in the record.” Ning
Yen Yao v. Kao (In re Kao), 612 B.R. 272, 280 (Bankr. S.D.N.Y. 2020) (quoting Hicks v. Baines,
593 F.3d 159, 166 (2d Cir. 2019); FED. R. CIV. P. 56(a)) (internal quotation marks and citation
omitted). In considering an unopposed summary judgment motion, the Court shall assess whether
any material issue of fact remains for trial. Gustavia Home, LLC v. Owusu, No. 16-CV-5709 (RA),
2018 WL 2122818, at *6 (S.D.N.Y. May 8, 2018). Where no issue of fact remains, an unopposed
moving party may be entitled to summary judgment as a matter of law. Vt. Teddy Bear Co. v. 1-
800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004).
III. DISCUSSION
In assessing whether a genuine issue of material fact exists, the Court must not only
examine whether the Trustee has sufficiently plead that no issue of material fact remains but must
also examine the extent of Square One’s defenses.

A. Square One’s Defenses
Square One did not file an opposition to the motion for summary judgment and thus has
not met its burden of producing specific evidence of a question of material fact regarding defenses
to the avoidance action. See 1st Bridge LLC v. William Lee Freeman Garden Apartments LLC,
2011 WL 2020568, at *1 (S.D.N.Y. May 23, 2011). Nevertheless, “the Court must scrutinize even
an unopposed summary judgment motion to satisfy itself that no material issue of fact remains for
trial.” U.S. Bank. Tr., N.A. v. Dingman, 2016 WL 6902480, at *3 (S.D.N.Y. Nov. 22,
2016) (citing Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004)).
Since Square One did not oppose the Trustee’s Motion for Summary Judgment, the Court
shall examine the defenses asserted in Square One’s Amended Answer. Square One asserted four

affirmative defenses in its Amended Answer. Of these, the Court has made findings against three
of the four defenses. First, the contention that the Trustee’s Amended Complaint fails to state a
claim upon which relief can be granted was addressed in the Court’s Motion to Dismiss Order, as
the Court found a prima facie claim as to the Count One of the Amended Complaint insofar as it
“seeks to avoid the transfers under 11 U.S.C. § 548(a)(1)(A) and recover under 11 U.S.C. § 550.”
Dkt. No. 177. Next, Square One’s second defense is not applicable, as the Court has not dismissed
the Trustee’s avoidance action under 11 U.S.C. § 548(a)(1)(A), and therefore, any claims or
allegations pertaining to that claim remain relevant. Finally, Square One’s defense that the
Trustee’s claims are barred by the Bankruptcy Code’s safe harbor provision under 11 U.S.C. §
546(e) does not apply because the safe harbor provision under section 546(e) has an explicit carve
out for avoidance actions under 11 U.S.C. § 548(a)(1)(A), which is the type of proceeding at issue
here. See, e.g., Picard v. Katz, 462 B.R. 447, 453 & n.5 (S.D.N.Y. 2011).
The affirmative defense remaining before the Court is the contention that Square One

received the transfers at issue in good faith within the meaning of 11 U.S.C. § 548(c). In support
of this defense, Square One contends that it did not know facts necessary to conduct further inquiry
into BLMIS’s fraud, and that Square One would not have discovered the fraudulent purpose of the
Transfers even if it had conducted a diligent inquiry. Square One further asserts that it took for
value because it invested more in BLMIS than the amount of the Transfers. Am. Answer 63. Square
One did not provide additional evidence to support its defenses. Am. Answer 62-65. The Amended
Answer did not include any exhibits, and Square One did not otherwise supplement its assertions
in other filings.
B. Evidence Provided in the Trustee’s Motion for Summary Judgment
i. Fact Discovery

In addressing whether a genuine issue of material fact exists, the Court turns to the evidence
pertaining to the Trustee’s Motion for Summary Judgment. In addition to the memorandum of law
supporting the Motion for Summary Judgment, the Trustee relies on the Trustee Statement of Facts,
the MSJ Declarations and accompanying exhibits, including testimony of principals of Square
One, for evidentiary support. Dkt. Nos. 330-335. The evidence of record indicates that Square
One’s principal, Luc Estenne (“Estenne”) was a sophisticated and experienced investor who had
published materials on risk management in investing and spoke as a “due diligence specialist”
advising on hedge fund investment and assessments of risks of fraud. See Dkt. No. 330, ¶¶ 139-
51. The Trustee Statement of Facts details that Estenne managed and/or acted on behalf of Square
One because he created and runs an investment advisory firm named Partners Advisors, S.A.
(“Partners Advisors”), and he created and controlled an entity called Square Asset Management
(“SAM”), which was Square One’s asset manager. Id., ¶¶ 136-37; Molina Decl., Exs. 13-15.
According to the record, SAM delegated its duties regarding Square One to Partners Advisors.

Dkt. No. 330, ¶ 138; Molina Decl., Ex. 16.
Testimony of Estenne, Square One documents and Partners Advisors documents, such as
internal memoranda, documents, and reports, suggest that Estenne and other employees of Partners
Advisors and related entities believed or understood that they could not successfully ascertain
Madoff’s investment strategy while investing with BLMIS. See Dkt. No. 330, ¶¶ 165-68, 199-206,
220-22, 178; see also Molina Decl. Ex. 13, at 257:14-262:20, 287:10-288:8. In a confidential
summary memorandum of Square One, dated June 1, 1999, BLMIS is listed as an investment
advisor. Molina Decl. Ex. 18, p. 7. The memorandum states that the investment objective is to
“provide investors with access to the trading strategy of Madoff securities,” which included a split-
strike conversion strategy detailed in Exhibit A of the memorandum. Id. at pp. 9, 19-20. Upon

request of Madoff and his affiliates, Square One removed its references to BLMIS and Madoff
from its later offering documents, including its October 1, 2000 summary confidential
memorandum. See Molina Decl., Ex. 13 at 182:16-25, Ex. 49, Ex. 50, Ex. 51 at pp. 7, 9, 17-18,
20. A Partners Advisors document labeled “Bernard L. Madoff Investment Securities Due
Diligence” (the “Partners Due Diligence Memo”) memorialized concerns as to a “lack of
transparency issue” and “mystery” regarding Madoff’s ability “to generate such consistent returns
with such a simplistic strategy.” Id., Ex. 53 at p. 6.
The record further demonstrates apprehensions in Madoff’s and BLMIS’s involvement
with Square One, including concerns about conflicts of interest. The Partners Due Diligence
Memo, dated June 28, 2000, included conclusions that Square One Fund’s negative points were a
“[l]ack of independence in the NAV calculation,” a “[p]otential conflict of interest as Madoff is a
broker, an investment advisers [sic] and a custodian,” and a “dependent board of directors.” Id. at
p. 9. A Square One manager monitoring report of BLMIS, dated May 26, 2004, stated concern

with “the lack of separation of functions as Madoff Investment Securities is its own broker, prime
brok[er], custodian and administrator.” Molina Decl., Ex. 54 at p. 2.
The Trustee provided further evidence to support the contention that Square One and
Partners Advisors were aware of trading anomalies with respect to Square One’s BLMIS Account.
Dkt. No. 330 ¶¶ 179-91. The record reflects that Estenne and Partners Advisors analyzed
investment performance and risk of Square One against the S&P 500 Index in a series of reports.
Id., Molina Decl., Exs. 45, 55-59. Testimony of Partners Advisors personnel ultimately concluded
that BLMIS’s returns were unjustifiable in the market at the time, that “there was no way to explain
how the returns were generated,” that members of the investment community in Geneva suspected
that Madoff’s actual implemented strategy was likely illegal, and that the returns were “too good

to be true.” Id., ¶¶ 191-192, 194, 196-197, 202-215; see also Molina Decl., Ex. 27 at 237:5-243:4,
272:7-272:4, 283:10-17, Ex. 64 at p. 2.
ii. Expert Discovery
In addition to the evidence produced during fact discovery, the Trustee provided expert
reports, including that of Dr. Steve Pomerantz (“Pomerantz”), a specialist in economic and
investment management consulting, economic damage assessment, and litigation support, Lisa M.
Collura (“Collura”), a forensic accounting and financial fraud investigative services specialist,
Bruce G. Dubinsky (“Dubinsky”), a specialist in forensic accounting, fraud investigation, and
dispute analysis, and Matthew G. Greenblatt, a specialist in auditing, accounting, litigation
consulting, forensic accounting, internal investigations, post-acquisition and shareholder disputes,
anti-money laundering, and advising troubled companies. See Dkt. Nos. 332-335.
Trustee’s counsel retained Dubinsky in June 2011 to “provide forensic accounting analyses
and render certain expert opinions and conclusions.” Dubinsky Decl. Attach. A, ¶ 1. Dubinsky’s

report, dated October 23, 2024, concluded that fraud permeated BLMIS, that the investment
advisory business was a Ponzi scheme, that BLMIS was insolvent beginning on or before
December 11, 2002 and at all points thereafter, and that Madoff Securities International Limited
facilitated the transfer of funds out of the BLMIS investment advisory business. Id. at ¶ 17.
Collura’s expert report, dated December 9, 2024 and read in conjunction with the Collura
report dated January 16, 2019, conducted an account tracing analysis between BLMIS’s
investment advisory cash activity and Square One’s BLMIS customer account during the relevant
period between December 11, 2006 and December 11, 2008 (the “Two-Year Period”). Collura
Decl., Attach. A, Attach. B at ¶¶ 5-6. Collura’s report found that “100% of the total dollar amount
of withdrawals reflected on the customer statements” for Square One’s BLMIS customer account

during the Two-Year Period went to a bank account held by Square One. Id. at ¶ 27.
Greenblatt’s expert report, dated December 9, 2024 and read in conjunction with the
Greenblatt report dated November 15, 2012, detailed a principal balance calculation for Square
One’s BLMIS account, finding that $25,852,737 of the $28,097,165 of principal available in the
account was withdrawn between February 1, 1999 and December 11, 2008. Greenblatt Decl.,
Attach. A, Attach. B at ¶ 22. Greenblatt determined that a total of $6,410,000 was withdrawn within
the Two-Year Period. Greenblatt Decl., Attach. B at ¶ 22.
The Pomerantz report, dated December 9, 2024, describes the investment management
industry and the roles of Madoff, BLMIS, and Square One, and the customs of due diligence and
customary practice in the investment management industry. Pomerantz Decl., Attach. A. Based on
the analyses outlined in the report, Pomerantz opined that the due diligence performed on, and
information otherwise available regarding BLMIS and Madoff, revealed numerous red flags
pertaining to Square One’s BLMIS account. Id. at ¶ 87.

In particular, the Pomerantz report concluded that a process-based analysis of Madoff’s
purported split-strike conversion investment strategy (the “SSC Strategy”) and its implementation
would have revealed “(i) impossibilities where the only reasonable explanation was fraud; (ii)
indications that Madoff was not executing the purported strategy; (iii) inconsistencies with the
strategy; and (iv) inconsistencies with industry customs and practices.” Id. at ¶ 93. In evaluating
the SSC strategy, the Pomerantz report noted the strategy did not appropriately produce returns
that correlated to the underlying stock or the S&P 100 Index. Id. at ¶ 101. Pomerantz also observed
that the SSC Strategy would have had some level of volatility to have generated gains. Id. at ¶ 104.
Regarding scalability, Pomerantz found that by 2001, there was insufficient call option notational
value within the S&P 100 to support the $7 billion valuation of BLMIS’s assets under management

at the time and its increased valuations thereafter. Id. at ¶¶ 164-69.
Beyond the evaluation of the SSC Strategy, the Pomerantz report opines that BLMIS
deviated from industry norms by serving as investment advisor for the Square One BLMIS
Account in addition to acting as its own broker-dealer, custodian, and administrator. Id. at ¶ 108.
The Pomerantz report further concludes that the concentration of duties having been allocated to
just Madoff, the lack of credentials and short staffing of BLMIS’s alleged multi-billion-dollar
investment business, and the lack of disclosure and operational transparency of BLMIS were red
flags. Id. at ¶¶ 210, 217-18, 219, 225.
The Pomerantz report further presents a performance-based analysis of BLMIS—opining
that BLMIS’s performance was a red flag that Madoff had not executed the SSC Strategy. Id. at ¶
267. The report pointed to BLMIS’s anomalous performance in times of market stress, its ability
to buy below and sell above respective stock volume weighted average price levels with

consistency, and its consistent, statistically improbable, outperformance of peers. Id. at ¶¶ 229-32,
243-47, 256-67.
Finally, the Pomerantz report opined that BLMIS’s operational and fee structures did not
conform to industry norms and thus were red flags demanding further due diligence. Id. at ¶¶ 327-
41. The analyses and information set forth in the Pomerantz report and its exhibits support the
assertion that quantitative and qualitative red flags existed to lead a reasonable investor in Square
One’s position to divest or conduct further due diligence on BLMIS. Id. at ¶¶ 2, 108-09, 111, 114,
116, 126, 151, 169, 342.
Based on the Trustee’s uncontroverted Motion for Summary Judgment, the Trustee
Statement of Facts, and the MSJ Declarations and accompanying exhibits, the Trustee has

sufficiently satisfied its burden regarding the granting of summary judgment.
C. Square One’s Involvement
The Court notes that Square One has not provided a response to the Motion for Summary
Judgment, nor provided evidence to controvert the facts set forth in the Trustee’s motion. While
Square One elected not to file any opposition to the Motion for Summary Judgment, it
meaningfully participated in the case through discovery and had the opportunity to respond to the
Trustee’s Motion for Summary Judgment and raise a dispute as to material facts.
The Parties stipulated to the Seventh Amended Case Management Plan (the “Case
Management Plan”) and the Court entered it on December 12, 2024. Dkt. No. 312. The Case
Management Plan established the deadlines for a) disclosure of rebuttal expert opinions; b)
applications for permission of the Court for expert testimony beyond the scope of the opinion
covered by the disclosures under section 3B of the Case Management Plan; c) disclosures and
request for production of documents underlying any expert opinions and rebuttal expert opinions;

d) depositions of expert witnesses; and e) all expert discovery. Id. Both counsel for the Trustee and
counsel for Square One stipulated to the Case Management Plan approximately four months prior
to Square One’s March 4, 2025 letter indicating its intent to cease its activity in the adversary
proceeding. Dkt. No. 318.
The record indicates that Square One participated in fact discovery, including meet and
confers, production of documents, electronically stored information, and emails, and participation
in depositions, prior to March 4, 2025. See Dkt. No. 311; Molina Decl., March 31, 2023, Dkt. No.
265. Further, Square One assented to engage in expert discovery and had the opportunity to depose
the expert witnesses retained by the Trustee. After participation in discovery over several years
and agreeing to and having knowledge of pending expert discovery, Square One left the Trustee’s

Motion for Summary Judgment unanswered. Additionally, as previously stated, Square One did
not cite to any documents or exhibits in its Amended Answer. As a result, Square One failed to
establish the existence of a genuine issue of material fact.
IV. CONCLUSION
Through its Motion for Summary Judgment and associated filings, the Trustee has met its
burden of establishing that there is no genuine issue of material fact. Square One chose not to
oppose the Trustee’s Motion for Summary Judgment. Thus, Square One has not met its burden of
producing evidence of a question of fact regarding any defenses to the avoidance action under 11
U.S.C. § 548(a)(1)(A). To the extent that Square One’s Amended Answer alleges affirmative
defenses, no evidence was submitted supporting the defenses. Additionally, the record indicates
that Square One participated in fact discovery and assented to participation in expert witness
discovery prior to ceasing involvement in the Adversary Proceeding. For these reasons, the Court
concludes that the Trustee has met its burden for the granting of summary judgment and that Square

One has failed to raise any triable issue of fact to defeat the Trustee’s Motion for Summary
Judgment. Accordingly, the Court grants the Trustee’s Motion for Summary Judgment and requests
that the Trustee submit to the Court a proposed form of order granting the Trustee’s Motion for
Summary Judgment.

Dated: September 22, 2025
New York, New York
/s/ Lisa G. Beckerman
THE HONORABLE LISA G. BECKERMAN
UNITED STATES BANKRUPTCY JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11142325. Public record. Not legal advice.