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10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document
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Luxalpha’s account with BLMIS and the delegation of custodial and asset management
authority. Each of Hondequin, Egger, Kranz, and Schroeter then executed resolutions purporting
to monitor the investment restrictions applied to BLMIS, and approved sales prospectuses for
Luxalpha that made no mention of Madoff, despite knowing that Luxalpha was entirely invested
in BLMIS and had delegated custodial and trading authority for Luxalpha to BLMIS. Each
Moving Luxalpha Director Defendant also participated in Luxalpha’s response to the collapse of
BLMIS, and Hondequin and Schroeter even signed two customer claims on the fund’s behalf.
The Moving Luxalpha Director Defendants exercised more than “some control” with respect to
Luxalpha—indeed, they were “primary actors” who exercised authority, direction, and control
over the fund’s investment into New York. See Retail Software, 854 F.2d at 22 (finding
jurisdiction over “primary actor[s] in the transaction in New York” who were not “some
corporate employee[s] . . . who played no part in” it) (quoting Kreutter, 522 N.E.2d at 45)
(alterations in original). Luxalpha’s contacts with the forum should be imputed to each of them
because of this agency relationship. 24
24 The Moving Luxalpha Director Defendants rely on cases where courts have dismissed individual defendants
where plaintiffs have pled only conclusory allegations, or have not pled facts demonstrating meaningful control or
action with respect to the events giving rise to jurisdiction. (UBS Mot. at 20–23 (citing In re Terrorist Attacks on
Sept. 11, 2001, 718 F. Supp. 2d 456, 484 (S.D.N.Y. 2010) (dismissing individuals from complaint naming hundreds
of foreign parties where claims were “too attenuated”); Duravest, Inc v. Viscardi, A.G., 581 F. Supp. 2d 628, 634–35
(S.D.N.Y. 2008) (dismissing individual where only contact with forum was one letter sent to investors); In re
AstraZeneca Sec. Litig., 559 F. Supp. 2d 453, 467 (S.D.N.Y. 2008) (dismissal of individual directors where plaintiff
only alleged via a complaint “merely conclusory statements” that directors had knowingly distributed misleading
reports); Alki Partners v. Vatas Holding GMBH, 769 F. Supp. 2d 478, 489–90 (S.D.N.Y. 2011) (dismissing three
individual defendants where plaintiff had put forward only conclusory statements of fraud, but exercising
jurisdiction over additional individual and his bank employer where they provided “affirmative advice” to plaintiffs
relating to the fraud); Time, Inc. v. Simpson, No. 02 Civ 4917 (MBM), 2003 WL 23018890 at *5–7 (S.D.N.Y. Dec.
22, 2003) (dismissing claim against individual where “no evidence” that individual “exercised control over... or had
any personal involvement in any decisions made by or action taken by” corporation); Sedona Corp. v. Ladenburg
Thalmann & Co., No. 03 Civ. 3120 (LTS) (THK), 2006 WL 2034663, at *8–9 (S.D.N.Y. July 19, 2006)
(jurisdiction does not exist where plaintiff has put forward “generalized allegations” of conspiracy by foreign
defendants backed only by SEC filings showing control relationships between defendants).) In contrast to the
situations presented by these cases, the Trustee has presented evidence that each of the Moving Luxalpha Director
Defendants took numerous actions to operate and control a feeder fund invested entirely in New York, a showing
that, if need be, can be bolstered by jurisdictional discovery.
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