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10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document Pg 72 of 133 especially when such single contact “represent[s] a deliberate affiliation with the forum that renders foreseeable the possibility of being haled into court in the United States at least as to those specific contacts.” In re Application to Enforce Admin. Subpoenas Duces Tecum of SEC v. Knowles, 87 F.3d 413, 419 (10th Cir.1996) (citing McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223 (1957)); see also Burger King, 471 U.S. at 475 n.18. These Defendants were high-level employees of UBS SA, the organization that created Luxalpha, a feeder fund which was wholly and exclusively invested with New York-based BLMIS, and served as the fund’s board directors. See Cohmad, 418 B.R. at 81 (finding minimum contacts where foreign defendant’s “purposeful and profitable activities contributed to the massive losses suffered by victims of the BLMIS Ponzi scheme in the U.S.”); Maxam, 460 B.R. at 118 (finding specific jurisdiction where foreign defendant “engaged in a series of repeated transactions that intentionally channeled investor money into the BLMIS Ponzi scheme in New York”). Physical presence in New York is not necessary, when, as here, the defendants’ actions purposefully and directly touched the forum. See Heritage House Rests., Inc. v. Cont’l Funding Grp., Inc., 906 F.2d 276, 283 (7th Cir.1990) (finding jurisdiction and stating “[w]e have never held that the lack of presence in the forum state is determinative of the lack of jurisdiction”). It would be unfair to allow the Luxalpha Director Defendants to benefit from a profitable relationship between BLMIS and Luxalpha but then escape other consequences of that relationship. See Burger King, 471 U.S. at 474. The Moving Luxalpha Director Defendants’ claim that they did not receive “any compensation for their service to Luxalpha” is not grounds for their dismissal. (UBS Mot. at 23) The Trustee has alleged that each of the Moving Luxalpha Director Defendants benefited from Luxalpha’s New York activity in the form of fees subsequently transferred to them. (Am. 52
10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document Pg 73 of 133 Compl. 270, 332–37). Indeed, the Moving Luxalpha Director Defendants do not deny that they received substantial compensation from their employer, UBS SA, during the time they served on Luxalpha’s board; nor do they deny that UBS SA received substantial fees from Luxalpha. On a motion to dismiss, it is enough that the Trustee has alleged that payments to the Moving Luxalpha Director Defendants originated with BLMIS in New York. Silverman v. K.E.R.U. Realty Corp. (In re Allou Distribs., Inc.), 379 B.R. 5, 30 (Bankr. E.D.N.Y. 2007) (“plaintiff must allege sufficient facts to show, if proved, that the funds at issue originated with the debtor . . . dollar-for-dollar accounting is not required . . . at the pleading stage”). Further, it is quite possible that the Moving Luxalpha Director Defendants received other benefits from UBS SA for serving on Luxalpha’s board—such as career advancement at UBS SA, undisclosed bonuses, or other consideration, which must be considered in the jurisdictional analysis. See Retail Software, 854 F.2d at 23 (presuming that “officers, directors, and shareholders . . . stood to benefit from [their corporation’s] entry into the New York market”); see also Moneygram Payment Sys., Inc. v. Consorcio Oriental, S.A., No. 05 Civ. 10773 (RMB), 2007 WL 1489806, at *5 (S.D.N.Y. May 21, 2007) (finding jurisdiction over corporate officer where he benefitted from corporation’s New York transactions). Finally, the Moving Luxalpha Director Defendants cannot escape this Court’s reach simply because they undertook these actions in their roles as corporate officers. (UBS Mot. at 20.) Although a corporate officer is not automatically subject to personal jurisdiction in any forum where the company is subject to jurisdiction, “the Supreme Court has recognized that a defendant’s status as an employee or corporate officer ‘does not somehow insulate [him] from jurisdiction’” arising from his business-related contacts with the United States. In re Bozel S.A., 434 B.R. at 99 (quoting Calder, 465 U.S. at 790). Rather, the Bankruptcy Court may assert 53
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