EFTA01080721.pdf

Page 1 1 * * *CONFIDENTIAL* * * 2 JUDICIAL ARBITRATION AND MEDIATION SERVICE 3 NEW YORK, NEW YORK 4 5 FORTRESS VRF I LLC and ) FORTRESS VALUE RECOVERY ) 6 FUND I LLC, ) Claimants, ) 7 ) vs. ) Reference No. 8 ) 1425006537 JEEPERS, INC., ) 9 Respondents. ) ) 10 and ) ) 11 FINANCIAL TRUST COMPANY, ) INC., and JEEPERS, INC., ) 12 Counter-Claimants and ) Third-Party Claimants, ) 13 ) vs. ) 14 ) FORTRESS VALUE RECOVERY ) 15 FUND I LLC, ) Counter-Respondents, ) 16 ) vs. ) 17 ) D.B. ZWIRN PARTNERS, LLC, ) 18 D.B. ZWIRN & CO., L.P., ) DBZ GP, LLC, ZWIRN ) 19 HOLDINGS, LLC, and DANIEL ) ZWIRN, ) 20 Third-Party Respondents. ) ) 21 22 April 20, 2011 23 9:35 a.m. 24 25 Deposition of ELISE HUBSHER. VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080721  Page 2 1 2 3 4 5 May 25, 2011 6 9:35 a.m. 7 8 Deposition of ELISE HUBSHER, held at 9 the offices of Susman Godfrey, 560 Lexington 10 Avenue, New York, New York, before Laurie A. 11 Collins, a Registered Professional Reporter 12 and Notary Public of the State of New York. 13 14 15 16 17 18 19 20 21 22 23 24 25 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080722  Page 3 1 2 APPEARANCE S: 3 4 PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 5 Attorneys for Claimants and Witness 6 1285 Avenue of the Americas 7 New York, New York 10019-6064 8 BY: ALLAN J. ARFFA, ESQ. 9 HANNAH S. SHOLL, ESQ. 10 11 SUSMAN GODFREY L.L.P. 12 Attorneys for JEEPERS, 13 Financial Trust Company 14 Suite 5100 15 1000 Louisiana Street 16 Houston, Texas 77002-5096 17 BY: HARRY P. SUSMAN, ESQ. 18 19 COOLEY GODWARD KRONISH LLP 20 Attorneys for D.B. Zwirn Partners, LLC, 21 D.B. Zwirn Co. , L.P. , and DBZ GP, LLC 22 1114 Avenue of the Americas 23 New York, New York 10036-7798 24 BY: WILLIAM J. SCHWARTZ, ESQ. 25 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080723  Page 4 1 2 APPEARANCES (continued): 3 4 LANKLER SIFFERT & WOHL LLP 5 Attorneys for Daniel Zwirn 6 500 Fifth Avenue, 7 New York, New York 10110-3398 8 BY: JOHN S. SIFFERT, ESQ. 9 DANIEL E. REYNOLDS, ESQ. 10 ANDREW S. LEE, ESQ. 11 12 ALSO PRESENT: 13 MEGAN JOHNSON, ESQ. (Fortress) 14 DAVID SANDERS, Videographer 15 16 17 18 19 20 21 22 23 24 25 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080724  Page 5 1 2 THE VIDEOGRAPHER: My name is David 3 Sanders of Veritext. The date today is May 4 25th, 2011, and the time is 9:35 a.m. 5 This deposition is being held in the 09:34:31 6 office of Susman Godfrey, located at 560 7 Lexington Avenue, New York, New York. The 8 caption of this case is Fortress VRF I LLC, et 9 al., versus JEEPERS, Inc., et al., Reference 10 Number 1425006537, in the Judiciary 09:35:01 11 Arbitration and Mediation Service. The name 12 of the witness is Elise Hubsher. 13 At this time the attorneys will 14 identify themselves and the parties they 15 represent, after which our court reporter, 09:35:22 16 Laurie Collins of Veritext, will swear in the 17 witness and we can proceed. 18 MR. SUSMAN: Harry Susman for JEEPERS 19 and FTC. 20 MR. ARFFA: I'm Allan Arffa from Paul, 09:35:38 21 Weiss, Rifkind, Wharton & Garrison LLP. We 22 represent the claimants in this matter. And 23 I'm here also today on behalf of the witness. 24 MR. SCHWARTZ: William Schwartz from 25 Cooley LLP. I represent the Zwirn entities. 09:35:52 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080725  Page 6 1 2 MR. SIFFERT: John Siffert, Lankier 3 Siffert & Wohl, for Mr. Zwirn personally. And 4 together with me is Mr. Reynolds and Mr. Lee. 5 MR. ARFFA: And also with me is Hannah 09:36:04 6 Sholl from Paul, Weiss. 7 ELISE HUBSHER , 8 called as a witness, having been duly sworn 9 by the notary public, was examined and 10 testified as follows: 11 EXAMINATION BY 12 MR. SUSMAN: 13 Q. Can you state your name for the record, 14 please? 15 A. Elise Hubsher. 09:36:20 16 Q. Ms. Hubsher, what's your educational 17 background? 18 A. Educational background, did you say? 19 Q. Yes. 20 A. I graduated college from Vassar College 09:36:29 21 with a major in mathematics, and honors, and went 22 on to Wharton School at the University of 23 Pennsylvania for an MBA. 24 Q. When did you get your MBA? 25 A. When? 09:36:44 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080726  Page 7 1 Hubsher - Confidential 2 Q. Yeah. 3 A. 1980. 4 Q. 1980. 5 When did you go to work for Dan Zwirn 09:36:47 6 or his management company? 7 A. In 2006, the end of August 2006. 8 Q. Can you in summary fashion give me your 9 education -- work history, rather, from when you 10 got your MBA in 1980 to when you started working 09:37:10 11 for Mr. Zwirn? 12 A. Sure. I went from Wharton to work for 13 Data Resources, an econometric forecasting firm, 14 worked as a consultant there for four years. I 15 moved from there to Goldman Sachs, where I was on 09:37:24 16 the sales and trading desk, primary in the futures 17 group. 18 From there -- I worked there for four 19 years and then moved to JPMorgan, where I worked 20 for 15 years, in several different functions, 09:37:37 21 primarily in sales and trading. I worked on the 22 futures team, and then I coheaded the equity 23 derivatives marketing team and was participating 24 in an interdepartmental pension consulting group. 25 I moved from there to Northwater 09:37:58 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080727  Page 8 1 Hubsher - Confidential 2 Capital, which is a fund of funds that's 3 headquartered in Toronto. I headed up the New 4 York office, where I was responsible for marketing 5 to U.S. investors. And I was a member of the 09:38:11 6 investment committee. We invested directly in 7 hedge funds. 8 Q. And how long were you at Northwater 9 Capital before you -- 10 A. For three years. 09:38:22 11 Q. For three years. 12 A. Yes. 13 Q. So roughly from about 2003 to 2006? 14 A. Yes. 15 Q. Prior to working at Northwater Capital 09:38:31 16 you mentioned you had been in various sales jobs 17 at JPMorgan and Goldman Sachs. Did that involve 18 selling of hedge fund investments to investors? 19 A. It did not. It was in the securities 20 division. It involved selling futures, swaps, 09:38:45 21 derivatives of all sorts, and securities, fixed 22 income and equity securities, to hedge funds, to 23 pension funds and to other large investors. 24 Q. In terms of either the marketing or 25 managing of hedge funds, was Northwater Capital 09:39:02 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080728  Page 9 1 Hubsher - Confidential 2 your first introduction to that? 3 A. Yes. 4 Q. Then you went to work at Dan Zwirn's 5 management company you said in August of 2006? 09:39:16 6 A. Correct. 7 Q. And what was your job there? 8 A. I was the head of the marketing and 9 investor relations group. 10 Q. And how long did you remain in that 09:39:27 11 position? 12 A. Until Fortress took over the management 13 of the Zwirn funds on June 1st of 2009. 14 Q. And what is your current position with 15 Fortress? 09:39:41 16 A. I am in the capital formation group, a 17 managing director, responsible for marketing to 18 credit investors in Fortress's hedge funds and 19 private equity vehicles. 20 Q. What are credit investors? 09:39:55 21 A. They're investors -- Fortress has 22 several businesses, and I'm focused on the credit 23 business. 24 Q. Does that mean you're marketing to 25 investors who want to invest in hedge funds who in 09:40:04 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080729  Page 10 1 Hubsher - Confidential 2 turn invest -- 3 A. Yes. 4 Q. -- in credit of one sort or another? 5 A. It's Fortress's opportunistic credit 09:40:12 6 investing business, and I am marketing to 7 investors' interest in investing in those funds. 8 Q. Does any of your current 9 responsibilities have to do with marketing what's 10 left of the Zwirn fund? 09:40:26 11 A. Yes. I do investor relations for all 12 the investors in the Zwirn funds, former Zwirn 13 funds, now value recovery fund. 14 Q. I assume they're not marketing to new 15 investors -- 09:40:44 16 A. No. 17 Q. -- in these value recovery fund is what 18 it's called? 19 A. Yes. The fund -- 20 MR. ARFFA: You have to wait until he 09:40:49 21 finishes so the record's clear. So wait until 22 he's finished with the question, and then go 23 ahead and answer. 24 THE WITNESS: Okay. 25 Q. I'm not sure what the question was, but 09:40:59 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080730  Page 11 1 Hubsher - Confidential 2 I think I got the answer. 3 A. Okay. 4 Q. Is the description you just gave me of 5 your responsibilities at Fortress, has that 09:41:08 6 remained the same since you got to Fortress or has 7 it changed? 8 A. It's evolved. I initially was more 9 focused solely on the investor relations with the 10 former -- well, former Zwirn investors, current 09:41:21 11 value recovery fund investors. And now I'm more 12 focused on marketing to new clients and focused on 13 the Fortress funds. 14 (Ms. Johnson joins proceedings.) 15 Q. Why did you leave Northwater Capital to 09:41:37 16 go work for Dan Zwirn? 17 A. They refocused their marketing team to 18 the Toronto team, and I felt that it would be a 19 good time to seek opportunities elsewhere. 20 Q. And how did you find the Zwirn fund? 09:41:53 21 A. At Northwater, we were invested in the 22 Zwirn funds, and the former co-CIO of Northwater 23 was aware that Zwirn was looking for a head of 24 marketing and had recommended me to Dan and that I 25 speak to Dan. 09:42:12 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080731  Page 12 1 Hubsher - Confidential 2 Q. You said Northwater Capital had 3 invested in the Zwirn fund. 4 A. Uh-huh. 5 Q. Which of the Zwirn funds had it 09:42:20 6 invested in? 7 A. The offshore fund. 8 Q. How long had it been invested in the 9 offshore fund at the time you went to work for 10 Zwirn? 09:42:32 11 A. I'm not certain. 12 Q. Were you involved in making that 13 investment decision? 14 A. I was not. 15 Q. How large was the investment? 09:42:38 16 A. I don't exactly recall. It was -- 17 MR. ARFFA: I'm just going to caution 18 you here. I don't know if this is regarded as 19 confidential or not by I guess your former 20 employer. And to the extent you have 09:42:53 21 information about it from the current 22 employer, we would regard it as -- we've taken 23 the position the information about the current 24 investors is confidential. 25 THE WITNESS: Okay. 09:43:03 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080732  Page 13 1 Hubsher - Confidential 2 Q. Roughly how large was it? 3 MR. SUSMAN: I'm going to show the 4 witness a list in a moment of all of the 5 investors and the amount, so it's going to be 09:43:13 6 moot. So I don't have to go through it. 7 MR. ARFFA: Someone else apparently 8 must have produced that to you. 9 MR. SUSMAN: Yeah. 10 MR. ARFFA: Well -- 09:43:23 11 MR. SUSMAN: All I want to know is a 12 ballpark, Allan. I don't need the amount 13 exactly. 14 Q. Was it about $150 million? 15 A. I honestly don't recall. It might have 09:43:38 16 been. 17 Q. It was actually $149,577,000 as of -- 18 A. Okay. 19 Q. So there you go. 20 MR. SUSMAN: That's something we're 09:43:52 21 going to take up, by the way. 22 MR. ARFFA: I understand that's your 23 position. 24 MR. SUSMAN: Fair enough. 25 MR. ARFFA: For now we need to reserve 09:43:56 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080733  Page 14 1 Hubsher - Confidential 2 our position. 3 Q. While you were at Northwater -- 4 MR. ARFFA: I don't remember if under 5 the current confidentiality order there's some 09:44:06 6 requirement where we designate testimony. I 7 don't recall if it's at the hearing or maybe 8 after I get a transcript. But to the extent 9 I'm required to designate it, I would 10 designate, and I understand it's subject to 09:44:17 11 your objection. 12 MR. SIFFERT: I don't think there's a 13 requirement. It is confidential because we're 14 in arbitration. 15 MR. SUSMAN: We'll take it up later. 09:44:26 16 Q. So were you involved in any way in 17 supervising the investment that Northwater had 18 made into the Zwirn fund? 19 A. I was on the investment committee, so I 20 would monitor, along with the committee, all 09:44:40 21 investment in the fund of funds. 22 Q. But you weren't involved in actually 23 making the investment itself? 24 A. I was not. 25 Q. You're on the investment committee, so 09:44:53 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080734  Page 15 1 Hubsher - Confidential 2 I gather that that meant you reviewed the terms of 3 various hedge fund investments that you made. 4 A. I did. 5 Q. Would one of those terms that you would 09:45:06 6 review in evaluating a hedge fund investment in 7 Northwater be withdrawal rights that you had in a 8 hedge fund? 9 A. Yes. 10 Q. While you were at Northwater, did 09:45:15 11 Northwater invest, to your knowledge, in any fund 12 that had rolling lockups? 13 A. Well, they invested in the Zwirn fund, 14 which had a rolling lockup. 15 Q. Other than the Zwirn fund? 09:45:28 16 A. I'm not certain. 17 Q. How many hedge funds did Northwater 18 invest in during your tenure? 19 A. Forty or so. 20 Q. And the only one of the 40 that you can 09:45:39 21 recall that had a rolling lockup was the Zwirn 22 fund? 23 A. Others had lockups, but I just don't 24 recall if they had rolling lockups. 25 Q. Now, when you say you recall that the 09:45:54 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080735  Page 16 1 Hubsher - Confidential 2 Zwirn fund had a rolling lockup, is that something 3 you were aware of while you were at Northwater or 4 is that something you became aware of once you 5 went to work for the Zwirn fund itself? 09:46:07 6 A. I don't think I said I recalled that 7 they had the rolling lockup. But -- can you ask 8 me the question again? Sorry. 9 Q. Yeah. Did you -- do you recall when 10 you were at Northwater you were aware of what the 09:46:14 11 withdrawal rights were for the Zwirn fund itself? 12 A. I was aware that it was a long-dated 13 lockup because it was appropriate for the 14 investments that they were investing in, which 15 were illiquid. 09:46:26 16 Q. Other than what you've just told me, do 17 you have any other recollection of the lockups for 18 the Zwirn fund or how they worked, while you were 19 at Northwater? 20 A. I don't have any recollection. I 09:46:41 21 focused more on the portfolio and not on the 22 lockups. 23 Q. You're aware that at some point within 24 Zwirn people became aware of certain accounting 25 irregularities involving Perry Gruss, the former 09:47:13 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080736  Page 17 1 Hubsher - Confidential 2 CFO? 3 A. Yes. 4 Q. When did you first hear about some 5 issue with Perry Gruss? 09:47:22 6 A. Just before the first set of calls were 7 made, or somewhere around that time frame. 8 (Discussion off the record.) 9 Q. Are you saying that the first time you 10 heard about some issue with Perry Gruss was before 09:48:02 11 the investor calls were made? 12 A. Yes. 13 Q. And do you recall roughly when the 14 investor calls were made? 15 A. They were in October I think towards 09:48:12 16 the end of October -- middle to the end of 17 October. 18 Q. And you participated -- 19 A. Of 2006. 20 Q. Right. 09:48:21 21 And you participated in some of those 22 calls? 23 A. I did. I listened. 24 Q. We'll get to that in a minute. 25 Prior to -- how did you hear about this 09:48:26 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080737  Page 18 1 Hubsher - Confidential 2 Gruss issue? 3 A. I don't recall exactly who, but either 4 Dan, David, or Lawrence told me of them. 5 Q. In what context? Was there a meeting 09:48:43 6 where they brought you in and told you about it or 7 did they just come into your office and tell you? 8 A. I don't recall. 9 Q. At some point did they have a meeting 10 where they sat you down and explained to you what 09:48:59 11 the issues were? 12 A. Prior to making the first call, we went 13 through a script as to what had -- what we were 14 going to -- not we, what Dan was going to say. 15 Q. And who was at the meeting where he 09:49:15 16 went through the script? 17 A. I don't recall. It would have been 18 possibly Dan, David, Lawrence, or just Dan, or one 19 of them. 20 Q. Prior to -- the period right before the 09:49:33 21 investor calls started to be made -- 22 A. Yes. 23 Q. -- had you gotten -- had you heard from 24 anybody at the fund, sort of internal gossip, that 25 there was some issue with the accounting 09:49:43 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080738  Page 19 1 Hubsher - Confidential 2 department or an investigation underway, anything 3 like that? 4 A. Not that I recall. 5 Q. So it was shortly before the investor 09:49:49 6 calls were made you were brought in and told by 7 one of Mr. Zwirn or one of the higher-ups in the 8 management company that there was some problem? 9 A. Yes. 10 Q. And it involved Perry Gruss? 09:50:01 11 A. Yes. 12 Q. Can you tell me what else you recall 13 them telling you about it? 14 A. I just recall that Perry had separated 15 from the firm, and in that context the explanation 09:50:10 16 was made before we were making calls to explain 17 that he had left. 18 Q. Was it also explained that he had -- 19 Mr. Gruss had done something wrong? 20 A. We reviewed the script, which was clear 09:50:26 21 about two items that were uncovered and that Perry 22 had separated from the firm. 23 Q. And what was your reaction to hearing 24 about this, that the CFO had been fired and there 25 were some issues? 09:50:51 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080739  Page 20 1 Hubsher - Confidential 2 A. My reaction was that it was important 3 to communicate that. 4 Q. You were a newly hired investor 5 relations person, and two months into the job, I 09:51:05 6 suppose, they have an investor relations problem. 7 A. Yes. 8 Q. You did participate in the first set of 9 calls to investors? 10 A. I did. 09:51:16 11 Q. How about the second set? 12 A. I did. 13 Q. So in both ones -- 14 A. Yes. 15 Q. -- you participated. 09:51:22 16 And you say there were two issues you 17 learned about -- was it before the first set of 18 calls? 19 A. The first set of calls. 20 Q. And those two issues were what? 09:51:34 21 A. Let me think about it. The one was 22 management fees were -- actually, the management 23 fees were accrued but not yet payable but were 24 taken and that there was an asset that was paid 25 from one of the funds that was not from the fund. 09:52:06 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080740  Page 21 1 Hubsher - Confidential 2 Q. Did you know what that asset was? 3 A. I didn't. 4 Q. You subsequently found out? 5 A. I subsequently found out. 09:52:18 6 Q. And when you made the calls -- at the 7 time you made the first set of investor calls, did 8 you have any idea what the asset was that was 9 bought with investor funds that didn't belong to 10 the fund? 09:52:30 11 A. I don't believe I did. 12 Q. Did you ask Mr. Zwirn or anyone what is 13 this asset that was purchased with investor funds? 14 A. I don't recall. We were very just 15 focused on the process of making the calls. 09:52:43 16 Q. And did it strike you as odd that you 17 didn't know what the asset was that had been 18 bought with investor funds? 19 MR. ARFFA: Objection to the form. 20 You can answer. 09:53:00 21 THE WITNESS: What? 22 MR. ARFFA: You can answer. 23 THE WITNESS: At some point I learned 24 of it, and I -- I don't remember when and 25 didn't feel odd during the period. 09:53:08 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080741  Page 22 1 Hubsher - Confidential 2 Q. After the first set of investor 3 calls -- or strike that. 4 At some point there was a second set of 5 investor calls. 09:53:22 6 A. Right. 7 Q. Why were the second set of investor 8 calls made? 9 A. I believe that the firm had engaged 10 Gibson & Dunn and Deloitte & Touche to do further 09:53:32 11 investigation, and they found additional items 12 that, as a result of those, they had decided that 13 they would make a second set of calls. 14 Q. What were the additional items that 15 they had found? 09:53:51 16 A. Let's see. There was -- I just forgot. 17 There was some accounting whereby an expense was 18 applied to a fund and then reversed in the 19 subsequent two months. And there was one other. 20 It will come back to me, but it's just -- 09:54:28 21 Q. Was it interfund transfers? 22 A. Interfund transfers, yes. 23 Q. Fair enough. 24 And you say that in the calls you 25 listened? 09:54:39 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080742  Page 23 1 Hubsher - Confidential 2 A. Yes. 3 Q. You did not speak? 4 A. I didn't speak. 5 Q. Who did you listen to talking? 09:54:42 6 A. To Dan. 7 Q. So Dan made all of the calls, and you 8 just were listening -- 9 A. Yes. 10 Q. -- on some of them? 09:54:49 11 A. Yes. 12 Q. Did you listen to all of them? 13 A. Most of them. 14 Q. And why were you listening to the calls 15 that Dan was making? 09:54:59 16 A. To make certain that he was consistent 17 in his message. 18 Q. Did anyone else listen to the calls? 19 A. I don't think so. Possibly David or 20 Lawrence might have listened if it weren't 09:55:11 21 available. 22 Q. Did you listen to any call -- well, 23 strike that. 24 Had you -- you know who Jeffrey Epstein 25 is now? 09:55:24 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080743  Page 24 1 Hubsher - Confidential 2 A. Yes. 3 Q. And Financial Trust Corporation? 4 A. Yes. 5 Q. Did you listen to any of the calls that 09:55:29 6 Mr. Zwirn made to Mr. Epstein or any of his 7 representatives? 8 A. Yes. 9 Q. How many calls did you listen to? 10 A. Two, I think. 09:55:38 11 Q. And who were the calls with? 12 A. With Jeffrey Epstein. 13 Q. Mr. Epstein individually and Dan? 14 A. Yes. 15 Q. And what do you recall from those -- 09:55:56 16 from listening to those calls? 17 A. I recall Dan going through the script 18 that he was going through with every other 19 investor. I recall Mr. Epstein trying to get more 20 details and Dan resisting that. 09:56:12 21 Q. How was Mr. Epstein trying to get more 22 details? 23 A. He was asking what was really going on 24 and asking for more -- more information. 25 Q. Was Mr. Epstein agitated or could you 09:56:33 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080744  Page 25 1 Hubsher - Confidential 2 tell anything from the tone of his voice about his 3 reaction to this news? 4 MR. ARFFA: Objection to form. 5 You can answer. 09:56:41 6 A. He was trying hard to get the 7 information so... 8 Q. Did he raise his voice at all to 9 Mr. Zwirn? 10 A. It sounded as if he were animated. 09:56:57 11 Q. Did he cut him off when he was trying 12 to explain things and ask him questions? 13 A. He may have. I'm not sure. I don't 14 recall. 15 Q. That wouldn't be out of character, I 09:57:07 16 will tell you. 17 Did he -- and you say -- so Mr. Epstein 18 was asking for more information from Mr. Zwirn, 19 and Mr. Zwirn was resisting providing information 20 to him? 09:57:21 21 A. Correct. 22 Q. And did that cause Mr. Epstein to get 23 even more animated? 24 A. I just don't recall. I recall very 25 vividly asking again and again for more 09:57:34 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080745  Page 26 1 Hubsher - Confidential 2 information. 3 Q. In terms of the investor calls that you 4 listened to, what was the reaction of most of the 5 investors, generally? 09:57:45 6 A. They were very appreciative that Dan 7 personally called them and made the outreach and 8 alerted them, and they were interested in Dan 9 continuing to communicate with them. 10 Q. Were they animated in the way 09:58:08 11 Mr. Epstein was or were many of them much more -- 12 A. Many were much more routine. 13 Q. So is one of the reasons why you 14 remember the calls with Mr. Epstein because he 15 was -- it stuck out in your mind because of his 09:58:25 16 reaction -- 17 A. Yes. 18 Q. -- to the calls? Fair? 19 A. It stuck out because he was really 20 trying to get Dan to do something that Dan was not 09:58:33 21 going to do. 22 Q. During the calls that you listened to, 23 did Mr. Epstein ever ask you why Mr. Zwirn had 24 characterized some of these issues as immaterial? 25 A. I don't recall that. 09:58:56 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080746  Page 27 1 Hubsher - Confidential 2 Q. Do you recall whether Mr. Epstein ever 3 asked to speak to Schulte Roth & Zabel during the 4 calls? 5 A. I don't recall that either. 09:59:04 6 Q. During the calls that you listened to, 7 did Mr. Epstein ever ask to get some of his money 8 back out of the fund? 9 A. I don't -- I don't recall that. 10 Q. You were listening to these calls? 09:59:21 11 A. Yes. 12 Q. Was one of your responsibilities also 13 to take notes of the calls? 14 A. We took a few notes. Mostly it was 15 whether we got through or not and whether we went 09:59:29 16 through all the points. 17 Q. When the calls ended with Mr. Epstein, 18 did he ask for Mr. Zwirn to provide him with more 19 information or to follow up? 20 A. I don't recall. 09:59:48 21 Q. Other than the two calls you said you 22 listened to where Jeffrey Epstein participated, 23 did you listen to any -- participate in any other 24 calls between Mr. Zwirn and any representative of 25 Mr. Epstein during the 2006 time period? 10:00:14 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080747  Page 28 1 Hubsher - Confidential 2 A. I don't -- I don't believe so. 3 Q. Did you ever speak to a man named Harry 4 Beller during the 2006 time period? 5 A. Yes. Directly, though. 10:00:28 6 Q. I'm sorry? 7 A. Directly. You asked with din. 8 Q. Yes. Okay. 9 Did you speak to Mr. Beller about the 10 issues related to Mr. Gruss? 10:00:38 11 A. No. 12 Q. What did you talk to Harry Beller 13 about -- I'm trying -- I know it's been a while, 14 but during this 2006 time period. 15 A. Actually I don't know if it was 2006. 10:00:49 16 During the course of my tenure at Zwirn, I have 17 had situations with Harry Beller, primarily about 18 capital balances. 19 Q. Have you ever spoken to Darren Indyke? 20 A. I have, yes. 10:01:08 21 Q. Have you spoken to Mr. Indyke when you 22 were working for Zwirn -- 23 A. No. 24 Q. -- as opposed to Fortress? 25 A. Not that I recall. 10:01:19 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080748  Page 29 1 Hubsher - Confidential 2 Q. At some point did you hear that Jeffrey 3 Epstein was demanding some of his money back from 4 the fund? 5 A. Yes. 10:01:31 6 Q. When do you first recall hearing that? 7 A. When he sent a letter. 8 Q. Do you remember how much he was asking 9 for back in the letter? 10 A. $80 million. 10:01:47 11 Q. How did you learn of the $80 million 12 request? 13 A. I believe it came in to Dan, and I saw 14 the letter. 15 Q. Do you recall who gave you the letter, 10:02:04 16 or a copy of it? 17 A. I'm not certain, and I'm not sure they 18 gave it to me. I may have been sitting in the 19 room and it was there. 20 Q. An $80 million request I assume was a 10:02:20 21 fairly significant redemption request for an 22 investor at that point in time? 23 A. Yes. 24 Q. And what discussion do you recall 25 internal to the Zwirn fund was had once they 10:02:32 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080749  Page 30 1 Hubsher - Confidential 2 received the $80 million request? 3 A. Just looking at it and trying to 4 determine whether it was a valid request. 5 Q. So I'm clear, prior to seeing the 10:02:49 6 letter with the $80 million request -- 7 A. Yes. 8 Q. -- had you had any hint that 9 Mr. Epstein was going to ask for any money back? 10 A. Not that I recall. 10:02:59 11 Q. So when you saw the letter, that was 12 news to you that he wanted money out? 13 A. Yes. 14 Q. You say there was a discussion about 15 whether it was a valid request? 10:03:14 16 A. Yes. It I believe said immediately, 17 which is not the practice. And generally when we 18 receive requests, we prepare a schedule by tranche 19 as to what might be available for redemption. 20 Q. Who was this discussion with about 10:03:35 21 whether it was a valid request? 22 A. I don't know if there was really a 23 discussion around whether it was a valid request. 24 It came in, we looked at it, and we tried to 25 figure out what to do with it. 10:03:52 VERITEXT REPORTING COMPANY 212-267-6868 516-608-2400 EFTA01080750  Page 31 1 Hubsher - Confidential 2 Q. Well, who was the "we"? 3 A. Well, I think -- let me think about 4 this for a minute. I would imagine -- but I'm not 5 positive -- that Dan, David, and Lawrence had some 10:04:08 6 conversation around it. And they would then have 7 asked what the schedules were. 8 Q. Who would they have asked? 9 A. Me and my team. 10 Q. So do you recall participating in a 10:04:35 11 discussion with Mr. Zwirn and Mr. Lee and Lawrence 12 about whether it was a valid request or -- 13 A. No, not around whether it was a valid 14 request. It said something about being immediate, 15 which just isn't the terms of the -- of the fund. 10:04:49 16 Q. Did the people within the investor 17 relations department have any discussion about 18 Mr. Epstein's request? 19 A. No. 20 Q. You said that generally when you got 10:05:09 21 requests for redemption you would prepare a 22 schedule to see what was available for redemption; 23 is that right? 24 A. Yes. 25 Q. So what would typically happen if 10:05:25 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01080751  Page 32 1 Hubsher - Confidential 2 Mr. Zwirn or someone got a request, they would ask 3 the investor relations then to prepare the 4 schedule? 5 A. Yes. 10:05:34 6 Q. Prior to Mr. Epstein's $80 million 7 request, how many requests for redemptions had 8 been made while you were even at the fund? 9 A. Good question. 10 Q. Had there been any? 10:05:51 11 A. Not -- I'm actually not sure of the 12 timing. That would be our practice. 13 Q. As the investor relations person, do 14 you recall what decision was made about how to 15 deal with Mr. Epstein's $80 million request? 10:06:21 16 A. About a day or two or three or, you 17 know, a short while after it was received, we were 18 told that there was a focus now on helping 19 Mr. Epstein with a tax issue and that the request 20 was not really going to be pursued because there 10:06:48 21 was going to be work on the tax issue and as a 22 quid pro quo they would remove the request to 23 withdraw their 80 million immediately. 24 Q. Who told you that? 25 A. I believe David Lee. It might have 10:07:10 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 51