443 F.3d 180 Page 1443 F.3d 180(Cite as: 443 F.3d 180)Westlaw Delivery Summary Report for DANIELS,JEFFREYDate/Time <strong>of</strong> Request:Wednesday, October 21, 2009 18:26 EasternClient Identifier:NALDatabase:CTACitation Text: 443 F.3d 180Lines: 825Documents: 1Images: 0The material accompanying this summary is subject to copyright. Usage is governed by contract with ThomsonReuters, West and their affiliates.United States Court <strong>of</strong> Appeals,Second Circuit.Lorraine G. GRACE, Individually and as Executrix<strong>of</strong> the Estate <strong>of</strong> Oliver R.Grace, Gerald I. White, Trustee U/W Morgan H.Grace, for the Marital DeductionTrust, Gerald I. White, Trustee U/W Morgan H.Grace for the Non-MaritalDeduction Trust and Gerald I. White, Trustee U/WMorgan H. Grace for theGeneration Skipping Trust and Gerald I. White, Trustee<strong>of</strong> the John E. GraceTrust, individually and as stockholders <strong>of</strong> BriggsLeasing Corp., suing onbehalf <strong>of</strong> themselves and for the benefit <strong>of</strong> said corporationand for the class<strong>of</strong> all other stockholders <strong>of</strong> said corporation similarlysituated, Plaintiffs-Appellants,v.BANK LEUMI TRUST COMPANY OF NEWYORK, David Mack, the Estate <strong>of</strong> Leo V. Berger,Apex Marine Corp., Harvey Schwartz, Phyllis Sepeand Sigmund Kassap, Trustee <strong>of</strong>the Leo V. Berger Grantor Trust No. 1 as PersonalRepresentative <strong>of</strong> the Estate<strong>of</strong> Leo V. Berger, Non-Party Movants-Defendants-Appellees,Robert Rosenstock, Robert Genser, Edward Rosenstock,Briggs Leasing Corporationand Briggs Acquisition Corporation, Defendants.Docket Nos. 04-5824-CV(L), 04-5840(C0N), 04-5842-CV(CON).Argued: Sept. 12, 2005.Decided: April 4, 2006.Background: Former minority shareholders <strong>of</strong> corporation,as purported judgment creditors <strong>of</strong> corporationand its majority shareholder, brought fraudulentconveyance action against corporation's transferees.Transferees moved to vacate predicate judgmentagainst corporation and majority shareholder. TheUnited States District Court for the Eastern District<strong>of</strong> New York, Trager, J., granted motion, and subsequentlydismissed fraudulent conveyance claims.Former shareholders appealed.Holdings: The Court <strong>of</strong> Appeals, Pooler, CircuitJudge, held that:(1) transferees had standing to move to vacate predicatejudgment even though they had not been party toit;(2) motion to vacate was timely; and(3) predicate judgment was void, based on, inter alia,majority shareholder's having acted for corporationdespite conflict <strong>of</strong> interest.Affirmed.West Headnotes[1] Federal Courts 829170Bk829 Most Cited CasesDistrict court's decision on motion for relief fromjudgment is reviewed for abuse <strong>of</strong> discretion.Fed.Rules Civ.Proc.Rule 60(b), 28 U.S.C.A.[2] Federal Civil Procedure 2650170Ak2650 Most Cited CasesIn former minority shareholders' fraudulent conveyanceaction against corporation's transferees, brought© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.
443 F.3d 180 Page 2443 F.3d 180(Cite as: 443 F.3d 180)in shareholders' capacity as purported judgmentcreditors <strong>of</strong> corporation and its majority shareholder,transferees had standing to move to vacate predicateunsatisfied judgment, even though they had not beenparty to it; purpose <strong>of</strong> stipulation upon which judgmenthad been based was to collect money fromtransferees, and corporation was judgment-pro<strong>of</strong> andnot represented by counsel at time <strong>of</strong> judgment.Fed.Rules Civ.Proc.Rule 60(b), 28 U.S.C.A.;N.Y.McKinney's Debtor and Creditor <strong>Law</strong> § 273-a.[3] Federal Civil Procedure 2650170Ak2650 Most Cited CasesWhere plaintiff enters into settlement agreement withjudgment-pro<strong>of</strong>, pro se defendant with intent at time<strong>of</strong> settlement to collect from third party that allegedlyreceived fraudulent conveyances, and further, plaintiffattempts to use judgment as predicate for fraudulentconveyance action against third party, third partyis strongly affected by judgment and entitled tostanding to bring motion for relief from it. Fed.RulesCiv.Proc.Rule 60(b), 28 U.S.C.A.[4] Fraudulent Conveyances 8186k8 Most Cited CasesTo prevail on claim under New York fraudulent conveyancestatute, plaintiff must establish that: (1) conveyancewas made without fair consideration; (2)conveyor is defendant in action for money damages,or judgment in such action has been docketed againsthim; and (3) defendant has failed to satisfy judgment.N.Y.McKinney's Debtor and Creditor <strong>Law</strong> § 273-a.[5] Federal Civil Procedure 2658170Ak2658 Most Cited CasesIn former minority shareholders' fraudulent conveyanceaction against corporation's transferees, broughtin shareholders' capacity as purported judgmentcreditors <strong>of</strong> corporation and its majority shareholder,transferees' motion to vacate predicate judgment asvoid was timely, even though filed more than fiveyears after that judgment; shareholders themselveshad created significant delay by bringing fraudulentconveyance claim more than 15 years after subjectconveyances, and five years after unsatisfied judgment,and motion to vacate was reasonably filed inresponse to fraudulent conveyance claim. Fed.RulesCiv.Proc.Rule 60(b)(4), 28 U.S.C.A.;N.Y.McKinney's Debtor and Creditor <strong>Law</strong> § 273-a.[6] Constitutional <strong>Law</strong> 401292k4012 Most Cited Cases(Formerly 92k315)[6] Corporations 522101k522 Most Cited Cases[6] Corporations 542(1)101k542(1) Most Cited Cases[6] Federal Civil Procedure 2392170Ak2392 Most Cited CasesJudgment against corporation and corporation's nonattorneymajority shareholder, which was based onstipulation <strong>of</strong> settlement signed by majority shareholderon his own and corporation's behalf, was void,precluding its use as predicate for plaintiffs' fraudulentconveyance action against corporation's transferees;no evidentiary hearing had been held and no detailedaffidavits received, corporation's pro se statusprecluded its execution <strong>of</strong> stipulation, and corporationand majority shareholder had conflicting interestsand thus court's basing judgment on stipulationviolated corporation's due processrights. U.S.C.A. Const.Amend. 5; Fed.RulesCiv.Proc.Rules 55(b)(2), 60(b)(4).[7] Corporations 508101k508 Most Cited Cases[7] Federal Civil Procedure 2415170Ak2415 Most Cited CasesCorporation may not appear in federal lawsuit againstit except through attorney, and where corporationrepeatedly fails to appear by counsel, default judgmentmay be entered against it. Fed.RulesCiv.Proc.Rule 55, 28 U.S.C.A.*182 Sidney Bender and Risa Bender, LeventrittLewittes & Bender, New York, NY, for Plaintiffs-Appellants.Robert Fryd and Donna Levinsohn, WarshawBurstein Cohen Schlesinger & Kuh, LLP, New York,NY, for Non-Party Movant-Defendant-AppelleeBank Leumi Trust Company <strong>of</strong> New York.David T. Azrin and Harvey Schwartz, Gallet Dreyer& Berkey, LLP, New York, NY, for Non-Party© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.
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BAKER & HOSTETLER LLP45 Rockefeller
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BACKGROUND, THE TRUSTEE, AND STANDI
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Madoff who received fraudulent tran
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FIRST CAUSE OF ACTIONTURNOVER AND A
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Transfers; (b) directing that the S
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EIGHTH CAUSE OF ACTIONUNDISCOVERED
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TENTH CAUSE OF ACTIONDISALLOWANCE O
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111. Mrs. Madoff benefited from the
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WHEREFORE, the Trustee respectfully
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- Page 144 and 145: FRAUDULENT TRANFERENCESRonald M. Te
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Ron Terenzi is a founding partner a