You're viewing Docket Item 25 from the case WILLIAMS v. CEDE & CO.. View the full docket and case details.

Download this document:




Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 1 of 12


 

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA





 

 
CIVIL DIVISION

Case No. 2:12-cv-01216-DSC


Judge Cercone


STUART A. WILLIAMS, trustee of THE
STUART A. AND FRANCINE W. WILLIAMS
REVOCABLE TRUST,


Plaintiff,


CEDE & CO., nominee name of the Depository
Trust Company,


Defendant.

v.








ANSWER AND AFFIRMATIVE DEFENSES OF DEFENDANT CEDE & CO.

Defendant Cede & Co. (“Cede”), the nominee of The Depository Trust Company

(together with Cede, “DTC”), by its undersigned attorneys, as and for their answer to the

Complaint of Plaintiff Stuart A. Williams, Trustee of The Stuart A. and Francine W. Williams

Revocable Trust, states as follows in response to each numbered paragraph of the Complaint:

Jurisdiction and Venue

DTC denies the allegations in Paragraph 1.

DTC denies the allegations in Paragraph 2.

The Parties

DTC denies knowledge or information sufficient to form a belief as to the truth of

1.

2.

3.

the allegations in Paragraph 3.

4.

DTC admits the allegations in Paragraph 4, except that Cede & Co. is a New York

partnership and is the nominee of DTC for the registration of securities deposited with DTC.


 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 2 of 12


 

5.

DTC denies the allegations in Paragraph 5, except admits that DTC is a wholly

owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is a

holding company, organized under the laws of the State of New York. DTCC’s subsidiaries

provide, inter alia, clearing, settlement and information services for equities, corporate and

municipal bonds, government and mortgage-backed securities, money market instruments and

over-the-counter derivatives.

Other Involved Individuals and Entities

6.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 6.

7.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 7.

8.

DTC admits that Computershare functioned as the transfer agent in connection

with the First Liquidation Distribution. DTC denies knowledge or information sufficient to form

a belief as to the truth of the remaining allegations in Paragraph 8.

Factual Background

9.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 9.

10.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 10.

11.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 11.

12.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 12.

2
 


 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 3 of 12


 

13.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 13.

14.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 14.

15.

DTC respectfully directs the Court to the Chapter 11 Plan of Liquidation of

President Casinos, Inc. and PRC Management, Inc., dated August 27, 2008 (the “Plan”) for a full

and complete recitation of its contents, and states that no response is required to the allegations

concerning them. To the extent a response is deemed required, and any allegation made by

Plaintiff is inconsistent with the language of the document, DTC denies all such allegations.

16.

DTC respectfully directs the Court to the order of the Bankruptcy Court and the

Plan for a full and complete recitation of their contents and states that no response is required to

the allegations concerning them. To the extent a response is deemed required, and any allegation

made by Plaintiff is inconsistent with the language of the document, DTC denies all such

allegations.

17.

DTC respectfully directs the Court to the Liquidation Trust Agreement and the

Plan for a full and complete recitation of their contents and states that no response is required to

the allegations concerning them. To the extent a response is deemed required, and any allegation

made by Plaintiff is inconsistent with the language of the document, DTC denies all such

allegations.

18.

DTC respectfully directs the Court to the Plan for a full and complete recitation of

its contents and states that no response is required to the allegations concerning them. To the

extent a response is deemed required, and any allegation made by Plaintiff is inconsistent with

the language of the document, DTC denies all such allegations.

3
 


 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 4 of 12


 

19.

DTC respectfully directs the Court to the Plan for a full and complete recitation of

its contents and states that no response is required to the allegations concerning them. To the

extent a response is deemed required, and any allegation made by Plaintiff is inconsistent with

the language of the document, DTC denies all such allegations.

20.

DTC respectfully directs the Court to the Liquidation Trust Agreement and the

Plan for a full and complete recitation of their contents and states that no response is required to

the allegations concerning them. To the extent a response is deemed required, and any allegation

made by Plaintiff is inconsistent with the language of the document, DTC denies all such

allegations.

21.

DTC respectfully directs the Court to the Liquidation Trust Agreement and the

Plan for a full and complete recitation of their contents and states that no response is required to

the allegations concerning them. To the extent a response is deemed required, and any allegation

made by Plaintiff is inconsistent with the language of the document, DTC denies all such

allegations.

22.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 22.

23.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 23.

24.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 24.

25.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 25.


 

4
 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 5 of 12


 

26.

DTC respectfully directs the Court to the July 15 Letter for a full and complete

recitation of its contents, and states that no response is required to the allegations concerning

them. To the extent a response is deemed required, and any allegation made by Plaintiff is

inconsistent with the language of the document, DTC denies all such allegations.

27.

DTC respectfully directs the Court to the July 15 Letter for a full and complete

recitation of its contents, and states that no response is required to the allegations concerning

them. To the extent a response is deemed required, and any allegation made by Plaintiff is

inconsistent with the language of the document, DTC further denies all such allegations.

28.

29.

30.

DTC denies the allegations in Paragraph 28.

DTC denies the allegations in Paragraph 29.

DTC respectfully directs the Court to the Plan for a full and complete recitation of

its contents and states that no response is required to the allegations concerning them. To the

extent a response is deemed required, and any allegation made by Plaintiff is inconsistent with

the language of the document, DTC denies all such allegations.

31.

DTC respectfully directs the Court to the Plan for a full and complete recitation of

its contents and states that no response is required to the allegations concerning them. To the

extent a response is deemed required, and any allegation made by Plaintiff is inconsistent with

the language of the document, DTC denies all such allegations.

32.

DTC admits that Computershare acted as an agent for the Liquidation Trust and

sent communications to DTC concerning the First Liquidation Distribution. DTC denies

knowledge or information sufficient to form a belief as to the remaining allegations of Paragraph

32.


 

5
 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 6 of 12


 

33.

DTC admits that Computershare paid an aggregate amount of $5,917,878.75 to

DTC on behalf of the DTC participants who had a position in PCI. As to the remainder of the

allegations, DTC denies knowledge or information sufficient to form a belief as to the customers

of DTC’s participants.

34.

35.

DTC denies the allegations in Paragraph 34.

DTC admits that DTC allocated to Schwab that portion of the First Liquidation

Distribution to which Schwab was entitled and otherwise denies the allegations in Paragraph 35.

36.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 36.

37.

DTC states that no response is required to the allegations in Paragraph 37, which

purport to state legal conclusions and arguments, and, to the extent a response is required, denies

the allegations.

38.

DTC denies knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 38.

39.

DTC states that no response is required to the allegations in Paragraph 39, which

purport to state legal conclusions and arguments, and, to the extent a response is deemed

required, denies the allegations.

40.

DTC states that no response is required to the allegations in Paragraph 40, which

purport to state legal conclusions and arguments, and, to the extent a response is deemed

required, denies the allegations in Paragraph 40 to the extent Plaintiffs allege that DTC owes any

distribution to the Williams Trust, and otherwise denies knowledge or information sufficient to

form a belief as to the remaining allegations of Paragraph 40.


 

6
 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 7 of 12


 

41.

DTC admits that the Plaintiffs have made demands upon DTC and that DTC has

not made any payments in response, and denies the remaining allegations in Paragraph 41.

Count 1: Breach of Fiduciary Duty

42.

DTC repeats its responses to the allegations in the above paragraphs as though

fully set forth herein.

43.

44.

45.

46.

47.

48.

49.

50.

51.

DTC denies the allegations in Paragraph 43.

DTC denies the allegations in Paragraph 44.

DTC denies the allegations in Paragraph 45.

DTC denies the allegations in Paragraph 46.

DTC denies the allegations in Paragraph 47.

DTC denies the allegations in Paragraph 48.

DTC denies the allegations in Paragraph 49.

DTC denies the allegations in Paragraph 50.

DTC denies the allegations in Paragraph 51.

Count II: Negligence

52.

DTC repeats its responses to the allegations in the above paragraphs as though

fully set forth herein.

53.

54.

55.

56.

57.

58.

DTC denies the allegations in Paragraph 53.

DTC denies the allegations in Paragraph 54.

DTC denies the allegations in Paragraph 55.

DTC denies the allegations in Paragraph 56.

DTC denies the allegations in Paragraph 57.

DTC denies the allegations in Paragraph 58.

7
 


 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 8 of 12


 



59.

60.

DTC denies the allegations in Paragraph 59.

DTC denies the allegations in Paragraph 60.

Defenses and Affirmative Defenses

Each of the following Defenses and Affirmative Defenses is directed to all allegations of

the Complaint. By listing any matter as an affirmative defense, Defendants DTC do not assume

the burden of proving matters upon which Plaintiff bears the burden of proof under law.

As and For a First Defense

61.

The Complaint, in whole or in part, fails to state a claim upon which relief can be

granted.

As and For a Second Defense

62.

Plaintiff has not suffered damages or any ascertainable loss.

As and For a Third Defense

63.

To the extent Plaintiff has suffered damages or any ascertainable loss, such

damages or loss were caused by a third party, and not by Defendants.

As and For a Fourth Defense

64.

Plaintiff has no standing to bring this action.

As and For a Fifth Defense

65.

Plaintiff is barred by the doctrine of unclean hands from obtaining the relief it

seeks.


 

8
 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 9 of 12


 



As and For a Sixth Defense

66.

Plaintiff’s claims are barred, in whole or in part, by the doctrines of laches,

acquiescence, waiver, and/or estoppel.

As and For a Seventh Defense

67.

Plaintiff would be unjustly enriched if allowed to recover.

As and For an Eighth Defense

68.

This Court lacks personal jurisdiction over the parties to this claim.

As and For a Ninth Defense

69.

This Court lacks subject matter jurisdiction over the facts and law involved in the

claim.

As and For a Tenth Defense

70.

Venue is improper in the District Court for the Western District of Pennsylvania

and/or this District is not a convenient forum under the doctrine of forum non conveniens.

As and For an Eleventh Defense

71.

In performing its functions as a self-regulatory organization under the

circumstances presented in the Complaint, DTC is immune from Plaintiff’s damages claim under

the Securities Exchange Act of 1934.

As and For a Twelfth Defense

72.

DTC does not owe any legally cognizable duty to Plaintiffs.

As and For a Thirteenth Defense

73.

Plaintiff has failed to join necessary parties to this action pursuant to Federal

Rules of Civil Procedure Rule 19.

9
 


 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 10 of 12


 

As and For a Fourteenth Defense

74.

This action should be stayed pending the resolution of other actions involving

similar claims.

As and For a Fifteenth Defense

75.

Plaintiffs’ claims are preempted by federal law.

Additional Affirmative Defenses

76.

Defendant has not knowingly and intentionally waived any applicable affirmative

defenses and reserves the right to assert additional affirmative defenses that may become known

to it through its investigation into this matter or through discovery up to and including at the time

of trial. Defendant further reserves the right to amend its answer and affirmative defenses

accordingly and to withdraw any affirmative defenses that it determines are not applicable.


 

10
 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 11 of 12


 



WHEREFORE, Defendants respectfully request that the Court dismiss the Complaint in

its entirety, with prejudice, and with costs and disbursements, and grant such other and further

relief as the Court may deem just and proper.

Date: September 23, 2013
















Respectfully submitted,







By: s/ David J. Berardinelli

David J. Berardinelli (PA 79204)
[email protected]
DEFOREST KOSCELNICK YOKITIS
SKINNER & BERARDINELLI
436 Seventh Avenue
Pittsburgh, PA 15219
Tel.: (412) 227-3100
Fax: (412) 227-3130

Gregg M. Mashberg (admitted pro hac vice)
[email protected]
Lawrence S. Elbaum (admitted pro hac vice)
[email protected]
PROSKAUER ROSE LLP
Eleven Times Square
New York, NY 10036
Tel.: (212) 969-3000
Fax: (212) 969-2900



Counsel for Defendants Cede & Co., Nominee
of The Depository Trust Company


 

11
 

Case 2:12-cv-01216-DSC Document 25 Filed 09/23/13 Page 12 of 12


 





CERTIFICATE OF SERVICE

The undersigned hereby certifies that on this 23rd day of September, a true and correct

copy of the foregoing Answer and Affirmative Defenses of Defendant Cede & Co. was filed with

the Clerk of Court electronically and notice was served upon the parties by operation of the

Court’s ECF system.

Dated: September 23, 2013




s/ David J. Berardinelli



12