EFTA00078700.pdf

EXHIBIT H IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS Division of St. Thomas/St. John 0 In the Matter of the Estate of: ) )PROBATE CASE )NO. ST-19-PB-0080 JEFFREY E. EPSTEIN, )ACTION FOR TESTATE Deceased. )ADMINISTRATION Official Transcript FEBRUARY 4, 2020 BEFORE: THE HONORABLE CAROLYN P. H. PERCELL Magistrate Judge Presiding APPEARANCES: ARIEL SMITH, ESQ. , PAMELA TEPPER, ESQ. , Assistant Attorneys General Department of Justice GERS Building,Second Floor St. Thomas, Virgin Islands { On Behalf of the Government} 0 William Blum, Esq. Christopher Kroblin, Esq. Marjorie Whalen, Esq. Shari D'Andrade, Esq. Andrew Tomback, Esq. Daniel Weiner, Esq. {On Behalf of the Co-Executors EFTA00078700  Probate ST-19-PB-0080 2 APPEARANCES (Cont'd) Douglas Chanco, Esq. {On Behalf of Jennifer Araos} Kevin D'Amour, Esq., {On Behalf of Jane Doe 1,000 and Jane Doe } Richard Bourne-Vanneck, Esq. {On behalf of Tela Davis} John Benham, Esq., {On Behalf of Jane Doe} Melody Westfall, Esq., {On Behalf of Claimants Jane Doe 1-12} Sean Foster, Esq., {On Behalf of Anonymous Claimants EFTA00078701  Probate ST-19-PB-0080 3 I-N-D-E-X Motion Re: Appointment of Appraisers 12 Motion Re: Appointment of Master 22 Motion Re: Fee Applications 36 Motion Re: Quarterly Accountings 49 Motion Re: Claims Resolution Program/ Criminal Activity Lien Notice 63 WITNESSES DIRECT 103 Kenneth Feinberg 158 EFTA00078702  Probate ST-19-48-0080 103 1 was approved and signed by Justice Cabret 2 January 30th at 2020. And we have your oath 3 that was attested by the Clerk of the Court, 4 Attorney Handy February 3rd at 2020. So you 5 are properly before the Court. We will now 6 swear the witness. 7 Thereupon, 8 first having been duly sworn, was 9 examined and testified as follows: 10 DIRECT EXAMINATION 11 By Attorney Tomback: 12 Q. Please state your name? 13 A. 14 Q. Where do you live? 15 A. 16 Q. Did you come down in St. Thomas 17 specifically to testify in this proceeding? 18 A. Yes. 19 Q. And are you familiar with our 20 filing indicating on January 9th in our brief 21 that you would be here to answer questions 22 that the Court may have? 23 A. Yes. 24 Q. And where were you most recently 25 employed? EFTA00078703  Probate ST-19-PB-0080 111 1 Q. Is it a confidential program as 2 well? 3 A. It's confidential to the extent 4 that we, as the program administrators and my 5 staff and contractors, would be protecting the 6 privacy of the victims. We wouldn't be sharing 7 any information with the estate or publicly. 8 But the confidential requirement is 9 unilateral. It's only imposed on us and 10 there's no requirement whatsoever that 11 claimants limit their-- what information they 12 want to share with whomever they wish -- you 13 know, investigators, the public. This is an 14 alternative to civil litigation and so we have 15 no intention to interfere with any sort of 16 criminal proceeding . 17 Q. Are you familiar with the civil 18 lawsuit that the Attorney General of the 19 United States Virgin Islands filed in the 20 other court? 21 A. Yes. 22 Q. And have you read the Complaint? 23 A. I have. 24 Q. And direct your attention--you 25 probably don't remember this, but I'll tell EFTA00078704  Probate ST-19-PB-0080 118 1 not agents of the estate. We're not here to do 2 their bidding. We make decisions on the design 3 and I will make designs on the administration 4 of the program, how it operates, and how 5 claims are determined based on our own 6 judgment and experience and the estate has 7 agreed to be removed from any part of that 8 process. 9 Q. And so just to focus in on an 10 individual claimant's claim and the amount of 11 compensation that the program, and you as the 12 administrator, arrive at, the statement 13 provides that quote, the estate will have no 14 authority to reject or modify the 15 administrator's determination on any basis or 16 as to any claims, close quote. Why is that 17 important to the program and the claimants? 18 A. It's important because to allow 19 the estate a say in these decisions 20 compromises the key-guiding principle of the 21 program. It compromises our independence; it 22 compromises our claims and confidentiality; it 23 compromises the non-adversarial nature of the 24 program. 25 Q. And with respect to the program it EFTA00078705  Probate ST-19-PB-0080 158 1 whether you can say we can back out this 2 amount, whatever is going on in the civil 3 court should not be affected; we believe the 4 estate, if the Attorney General, the 5 Government of the Virgin Islands was to 6 prevail, this will be the amount that they 7 would recover and so we can safely expend 8 these monies on this program, but remember the 9 question was because we don't have the 10 quarterly accountings, we don't have the full 11 evaluation. We don't know what the estate 12 consist of. 13 ATTORNEY TOMBACK: Your Honor, I 14 understand. Can we start with Mr. Feinberg 15 just to address the subsequent concerns that 16 the Attorney General have with the program, if 17 I can call him? 18 THE COURT: Just call him quickly. 19 Thank you, . We have all exhibits 20 admitted? 21 Thereupon, KENNETH R. FEINBERG, 22 first having been duly sworn, was examined and 23 testified as follows: 24 DIRECT EXAMINATION 25 By Attorney Tomback: EFTA00078706  Probate ST-19-PB-0080 159 1 Q. Mr. Feinberg, before you were 2 sworn in, I think you have all the exhibits in 3 front of you so it would go much quicker. 4 THE COURT: He's already sworn 5 in. 6 ATTORNEY TOMBACK: He already 7 sworn in? 8 THE COURT: Yes, we were good on 9 this one. 10 By Attorney Tomback: 11 Q. Where do you live, Mr. Feinberg? 12 A. Washington, DC. 13 Q. Did you come down here just to 14 testify in this proceeding? 15 A. I did. 16 Q. Where are you employed? 17 A. I'm the Law Office of Kenneth R. 18 Feinberg, PC. 19 Q. What do that firm do? 20 A. We specialize in alternative 21 dispute resolutions, mediations, arbitrations 22 and claim programs like the one proposed. 23 Q. Would you just describe briefly to 24 Your Honor your experience in this matter? 25 A. I started in 1984 with the Agent EFTA00078707  Probate ST-19-PB-0080 170 1 Q. I mean, that's a very fine point I 2 asked. It's not really clear to me whether the 3 Attorney General is concerned about finding 4 too many people eligible or finding too many 5 people ineligible. 6 I mean the goal of the program, 7 right, is to figure out the people who are 8 truly eligible and to accurately figure out 9 what is just compensation? 10 A. Correct. 11 Q. That's the whole game, right? 12 A. Correct. 13 Q. Okay. We covered the concern about 14 being forced to come to New York or not being 15 heard. If need be, could you envision coming 16 down here, I guess you or coming 17 down here if there's enough people here and 18 meeting with claimants? 19 A. Absolutely. Don't forget, what 20 these people often want as much as 21 compensation, if not more, is validation, is 22 acknowledgment, the opportunity to be heard 23 and this is something that is a very important 24 voluntary aspect of the program. 25 Q. Ms. George complains that the EFTA00078708  Probate ST-19-PB-0080 171 1 program, quote, contains no assurances that 2 the information submitted by a claimant cannot 3 be later used against her if she thereafter 4 decides to file suit against the estate or any 5 other co-defendant. 6 Is that criticism grounded in 7 the way you see the program? 8 A. No. No. The protocol expressly 9 secures the confidentiality of anything 10 provided by the claimant. The claimant, and 11 the claimant alone, decides the extent of 12 transparency or disclosure - not the program, 13 not the administrator, or the estate. 14 Q. A few more, on Page 6,there's a 15 concern that notes, quote, the program 16 provides no protection to claimants who 17 voluntarily provide information that may later 18 be used to defend the estate from claims or 19 provides evidence against other victims. Does 20 the program work that way? 21 A. No. The program seals all the 22 information and various common law and 23 statutorial privileges apply. We've seen that 24 in these other programs - attorney-client, 25 etcetera; settlement discussions, etcetera. EFTA00078709  Probate ST-19-PB-0080 180 1 litigate or pursue other remedies. 2 Q. Is the estate vulnerable to third 3 party claims and how does that work if, in 4 fact, the estate does not receive a general 5 release from a compensated claimant? 6 A. That's a very interesting 7 provocative question raised by the Attorney 8 General and others. And as stated 9 earlier, the scope of the release has not yet 10 been finalized. The estate has to make a 11 decision. Does it want total peace? 12 , you will pay what 13 ever is necessary to secure a comprehensive 14 release so we won't be cross-claimed by a 15 claimant or alternatively now, if a claimant 16 wants to release the estate but litigate 17 against X or Y, that is up to the claimant. 18 So that is a critical issue and 19 you can argue both ways and I think that the 20 estate and the administrator and the 21 plaintiffs' lawyers are discussing that at 22 this time. 23 Q. Page 8, Ms. George complains that 24 the program, quote, does not specify whether 25 the administrator is permitted or required to EFTA00078710  Probate S7-19-P11-0080 181 1 share evidence with law enforcement, thus 2 positioning the program as a potential means 3 to conceal criminal activity, close quote. I 4 take it that wasn't an accusation that you're 5 trying to conceal anything, but in any event, 6 what's your view on that? 7 A. In the forty years that I've 8 designed and administered these programs, law 9 enforcement has never sought to secure any 10 civil confidential information. 11 In the church cases, the 12 Attorney General of various states have come 13 to us and said, you know, you have a lot of 14 information about wrongdoings by Clergy and we 15 refused to--we work out with the Attorney 16 General, go see the diocese or the Church. 17 Don't come to a program where claimants, 18 individual victims have participated in a 19 program on the absolute guarantee of the 20 administrator that information that have been 21 submitted will not be disclosed to anybody. 22 And that is a very important part of this. 23 Claimants do not want information disclosed. 24 Q. The program, would it respect that 25 wish of claimants? EFTA00078711  Probate ST-19-PB-0080 182 1 A. It's expressly spelled out in the 2 protocol, yes. 3 Q. And they can still go to law 4 enforcement. Period. Full stop. It's up to 5 them? 6 A. It's up to them and they can go 7 public. That's up to them. The estate cannot. 8 The administrator cannot. 9 Q. On Page 8, Ms. George says that 10 the program, quote, presents an unavoidable 11 conflicts of interest, close quote, between 12 the executors and the program. She said, the 13 Co-Executors have, quote, an inescapable 14 conflict of interest in recommending a program 15 that proposes to compensate any individual or 16 entity making such allegations requiring in 17 return overly broad releases. Do you have a 18 view on this? 19 A. You have to ask the estate on 20 that. I can tell you that before we agreed to 21 take on this assignment, and 22 myself and Ms. Biros, we have received 23 absolute assurances from the estate that they 24 will play no role in the day-to-day 25 administration of this program. EFTA00078712