EFTA01082356.pdf

Daniel B. Zwirn February 18, 2010 205 207 1 bears Bales stamp DBZCOPR-00661225 through 861226. MR. SIEFERT: You have to say yes' or 'no.' 2 Please take a moment to review the document 2 A Oh, I'm sorry. That's what it look Ilke. I 3 MR. SIEFERT: Thank you. 3 agree that it looks like that But I don't recall the 4 (Witness perusing document.) 4 e-m.911. 5 A Okay. 5 0 You don't recall receNing this e-mail? O Okay, Mr. Zwlm, why don't we go from the bottom 6 A No, I don't 7 up? And, you're not on every e-mad, so we're going to 7 0 Looking at ft today, do you know - and I'm 8 &dr:, one or two. 8 looking at the - the George Sard e-mail - 9 But, if you'll 9010 tie Bates-stamp that ends In 9 A Um hmm. 10 226, which is the second page? 1o 0 - do you have an underStarkfing as to vthal he was 11 A Okay. 11 speaking about when he said am, unfortunately, not 12 O There is an e-mail from a Craig Bergstrom. The 12 surprised that this Is starting to leak'? Do you know what 13 date 1 time stamp Is Wednesday, October 25th, 2006, 13 the this' referred to? 14 6:37 . It's to yourself and Chris Suan. 14 A I don't know. 15 you sea that e-man? 15 0 Okay. 16 A Urn hmm. 16 A I don't recall. 17 O Okay. Mr. Zwim, do you recall receiving this 17 0 d you go to the next e-mall, -- 18 e-mait? 18 A Um hmm. 19 A No, I don't recall. 19 0 — which Is from Chris Suan, the date 20 O Okay. Do you know who Craig Bergstrom is? 20 stamp Is Thursday, October 26th, 2006, at 1:49 - 21 A He is a investment professional ancVor principal 21 A Um hmm. 22 at Corbin Capital Partners, the - a - a fund of hedge 22 Q - to David lee, yourself, Vasan Kesavan, 23 funds. 23 Lawrence Cutler, and David Proshan. 24 O And you say he's a - ! apologize. I should have 24 Do you see that e-mai!? 25 asked at the time, was Mr. Bergstrom in the same capacity 25 A Um hmm. 206 209 1 al Corbin Capital? 1 0 Okay. 2 A I don't know a he was a principal or a partner. 2 MR. liFERT: Say yes.' 3 I don't know what the - but he was an investment 3 A Oh, sorry, sorry about that. Are there any 4 professional. 4 "urn hmms' that we have to go back? Q Okay. Looking at this e-mail today, do you MR. SIEFERT: No, lust say -Yee 6 recall receiving d? 6 A Okay. yes. 7 A Id°. I dont. 7 Q Mr. Saran - well first, do you recall receiving 8 Q And do you know what the nimor that Mr. Bergstrom B this e-mail? 9 is referring to was? He says, 'I think there is a rumor 9 A No, I don't. 10 going around about accounting or valuation issues at your 10 Q Okay. 11 shop.' 11 A I don't retail. 12 A I don't recall. 12 0 Mr. Suan wrote I agree this is going to the SEC, 13 O Okay. MI right Let's go to the next page. 13 whether we like or not. So, I salt think we should be 14 which is the front page, please? The one that ends in 225. 14 seriously oonsidedng the self-reporting option." 15 There's an e-mail in the middle of the page. 15 Looking al this now, do you have any 16 It's from David Lee to yourself Chits Saran, Vasan Kesavan, 16 undo:stem:fang as to what the --the 'this' Mr. Suan was 17 Lawrence Cutler, Dawd Proshan. The date arid time gam? is 17 referring to, in 'this is going to the SEC"? 18 Wednesday, October 25th, 20:32 hours. And, is 18 A I don't meat 19 October 25th, 2006. 19 0 Did the "this* refer to any of the accounting or 20 Do you see that? 20 control issues, like the management fees or the plane that 21 A Urn trim. 21 were discovered prior to the date of this e-mail? 22 CI Okay. It looks like Mr. Loo forwarded you the 22 A 1- I don't recall what it was specifically 23 e-mai below. 23 regarding, because subsequent - there were issues before 24 A Um hmm. 24 we separated from Perry, and then there were subsequent 25 O Is that your understanding? 25 iSSues that ultimately led to a second round of calls and 52 (Pages 205 to 208) DIVERSIF 1IIIIIIIIIIIIIr ERVICES CONFIDENTIAL DZ_FTC 00079 EFTA01082356  Daniel B. Zwirn February 18, 2010 209 211 disclosures. So. I cont know what the 'this' is referdng 1 — I couldn't tee you when, or who was present. or -- or 2 to. 2 the subject, or the, you know, subsets of — 3 0 And those 'subsequent issues' were? 3 MR. SIFFERT: Well — well. let me ask you this. 4 A I don) recall. I don) recall the specifics. I 4 THE WITNESS: Yeah. 5 believe there's a — a script covering the second round of MR. SIFFERT: Was the issue of whether to report 6 calls. but I just don) recall. 6 to the SEC - 7 MR. SIFFERT: May I ask — 7 THE WITNESS: Urn hmm. B MR. ALTENBACH: Go ahead. MR. SIFFERT: —*ken by whether or not there 9 MR. SIFFERT: MOO saying what was said. was 9 was going to be press? Or, was that just an issue of 10 one of the subject matters that you discussed when you were 10 timing, of when to report it to the SEC? 11 talking with counsel — 11 THE WITNESS: Was what just an issue of timing? 12 THE WITNESS: Urn hmm. 12 MR. SIFFERT: Was the fact that there was going 13 MR. SIFFERT: - namely Schulte -- 13 to be press — a press story — 14 THE WITNESS Right. 16 THE WITNESS: Urn hmm. 15 MR. SIFFERT: -was one of the subject matters 15 MR. SIFFERT: a reason the reason that was 16 that was discussed - 16 that this matter was self-reported to the SEC, or was 17 THE WITNESS: Um hmm. 17 the tact that there was press something that merely 18 MR. SIFFERT: - back in early summa -- 18 affected the timing of the decision Mich to go to the SEC? 19 THE WITNESS: Urn hmm. 19 THE WITNESS: I don) believe the fact that a 2o MR. SIFFERT: — the possibility of 20 report was supposedly coming affected whether we went to 21 sell-reporting/ 21 the SEC. I don't know that II even affected the timing. 22 THE WITNESS To the SEC? 22 BY MR. ALTENBACH: 23 MR. SIFFERT: Yes. 23 0 And with respect to the last part of Mr. Sean's 24 MR. ALTENBACH: Yeah just to be clear. 24 e-mail, where it says 'I still think we should be seriously 25 THE WITNESS: Not that I recall. 25 considering the self-reportkig option' - 210 212 MR. SIFFERT: To the SEC. Was one of the 1 A Um hmm. 2 subject matters that you just - that was the - was the 2 Q —can you tell me if, prior to this 3 subject matter, without Saying who said what to whom, - 3 October 26th, 2006, e-mail, there had been a derision a THE WITNESS: Urn hmm. 4 withiM firm not to self-report? MR. SIFFERT: - of reporting, -- 5 A Not that I recall. 6 THE WITNESS Urn hmm. 6 (Pause) 7 MR. SIFFERT: - discussed with Schulte after 7 Q Do you recall when the firm retained Fried Frank? a their investigation? A I don't recall. I mean, in the — in the fall. 9 [No response.] 9 I don't know Nit was October, or November, or some in 10 MR. SIFFERT: Was that a subject matter that was 10 around that area. 11 discussed? Don't say what was said, and what was -- 11 Q Okay. Was It before or after Mr. Gruss's 12 THE WITNESS: You mean after their investigation 12 separation from the firm? 13 and before we terminated Perry? 13 A I hOneStly dent know. 14 MR. SIFFERT: Yes. 14 MR. SIFFERT: Who made that decision to hire is THE WITNESS: Not that I recall. is them? 16 MR. SIFFERT: Do you see Chris Suan saying here 16 THE WITNESS: It was recommended to me by our 17 this is going tome SEC whether or not ... so I still 17 head of compliance, and I said 'Go ahead and do It.' 18 Mink we should be seriously considering the self-reporting le Because he, you know, — 19 options'? Do you See that? 19 BY MR. ALTENBACH: 20 THE WITNESS: Yes. 20 () And that was Mr. Cutler? 21 MR. SIFFERT: Does that refresh your memory that 21 A Correct. I guess, at that point, CAO and CCO. 22 prior to this date of October 26th, there was some 22 0 And do you know when Mr. Cutler made that 23 discussion, at leas: internally, about self-reporting to 23 recommendation? 24 the SEC? 24 A 1 don't 25 THE WITNESS: I would say I believe se. I just 25 (Pause) 53 (Pages 209 to 212) DIVERSIFINEID ERVICES CONFIDENTIAL DZ_FTC 00080 EFTA01082357  Daniel B. Zwirn April 7, 2010 Page 441 Page 443 1 talked about some investment strategic initiatives, 1 O. Did anyone provide some type of analysis 2 but that was the prime vehicle through which I 2 that here is what these things are going to cost and 3 understood what was going on with the major 3 here is the impact of that cost on the management 4 initiatives on the non-investment side of the firm 4 company's performance? 5 and that continued to be clear during bucket three. 5 A. In bucket two, similar to what we 6 even during the delegation of the authority period. 6 already descnbed. I have seen in the management 7 BY MR. ALTENBACH: 7 company, and in bucket three It became far more a Al the management committee meetings — e detailed because we had substantially — quite 9 first, how often did the management committee meet? frankly because we were incurring massive additional 10 A. Typically weekly. 10 expenses associated with this process. 11 O. Was it done the same day every week? 11 O. At least during bucket two, was the firm 32 A. No, because I had probably certainly 12 Mil expanding aster as number of elites, office 13 by the late '06 period, I probably had 40 internal 13 locations throughout the world? 14 meetings weekly across, you know, domestic lending, 14 A. Sure. 15 U.S. real estate, private lending, assets in • 15 Q. There is cost associated with opening 16 structured finance. Eurcpe illiquid, South Asia 16 those offices, correct? 17 itfiquid, Australia Illiquid, Japan illiquid, Korea 1."? A. On an incremental basis, 'Slivery 18 iliquid, credit arbitrage, domestic credit 18 small. A number of their International offices ware 19 arbitrage. international, domestic merger arbitrage, 19 started as basically Regus offices. 20 domestic event-driven, domestic REITs, domestic 20 O. What does that mean? 21 utilities, domestic corporate private equity, 21 A. Temp space, so it would be very. very 22 domestic private real estate, domestic private 22 incremental. 23 investments In public equities, and so on. 23 O. But people worked in those offices. 24 So typteally the people setting those 24 correct? 25 meetings up would have different times. I might do 25 A. Yes. Page 442 Page 444 I Central Asia at 5:00 in the morning and 9:00 at 1 O. Wasn't there incremental head count 2 night, so those people who were the heads of those 2 test? 3 different meetings would kind of go into typically 3 A. Yes, but that would be added on in a 4 Trish Peters and kind of fie the holes up. And so, 4 very incremental way also in terms of level of 5 depending on all their relative schedules. she would 5 seniority. I believe we perviously discussed It was 6 book it all in. 6 - It was the case across the fine, we frequently had 7 O. And at these management comMatee 7 a person of a certain level based on where we were a meetings, did someone give a presentation or provide e and what we were doing in a certain area, so they 9 Information on the finances of the management 9 were sent to that area-Mont.rid or bad< officer — °mil 10 company? to prolred Itself out or h El to be added on. So 11 A. They were not a presentation per se. but 11 there would be increasing numbers but also increasing 12 at some of those we could have also seen what we 12 levels of seniority. Similar to what we just 13 were -- what I was being Shown in tens 01 management 13 discussed about the management company coaptr011er. 14 company meetings that stalled during bucket two. 14 how that went from Tim to the other, the next guy, to 15 But as a general matter. It would be 15 Mike Sabatell. 26 bigger initiatives Ike we are going to add Asian 16 Q. The office move from when DEQ & Co. 17 asset management and how many people we are going to 17 leaves the Highbridge office space and gets Its own 38 add to that and why. Or we are going to upgrade from 18 stand-alone office space? 19 one IT system to another and we are updating for this 19 A. Yes. 20 reason, or Ms is the status of this wait-Ilion 20 O. When did that occur? 21 exercise or this financing structure. 21 A. Very early 2004 I believe. 22 O. The types of things like adding people 22 O. Were there a Id of costs associated 23 or doing particular IT protects had costs ttre-4-t ed 23 with that moving process? 24 with them, right? 24 A. There was some decent amount. I don't 25 A. Yes. 25 know what they were. I do know, the big picturil 13 (Pages 441 to 444) Diversifi Services CONFIDENTIAL DZ FTC 00225 EFTA01082358  Daniel B. Zwirn April 7, 2010 Page 445 Page 447 1 wanted as short a lease as possible. so I believe it 1 what the implications ol that were or what drove his 2 was only about three and a hall years. It was a 2 decision making. 3 sublet to give us maximum flexibility and as little 3 0. Were you personally involved with 4 expense as possible. And it was also as close to 4 approving any al the costs associated with the move? 5 Highbridge as possZale, it as Iwo buildings over in 5 A. Just the lease that I can mai. 6 order to keep them'---4•6 ° and as much as possible 6 O. Things like office furniture or involved in business of our firm. And It was we 7 carpeting, the fixed asset-Ace acenclitures. new a got then space I know, since it was very, very e servers, new compilers, things We that? 9 significant expense relative to other expenses at S38 k No, not that I recall I certainly 10 a foot and that space lopped out at 130, so It was a 10 could have seen some sheet summarizing k all. I 11 very opportunistic thing also. It was not my idea to 11 just &et know. I am sure the management committee 12 move. We ran out of space at Highbridge and it was 12 as a whale, particularly with regard to that at that 13 their idea that we move. 13 point likely incltring Glennthe CFO, et cetera, 14 Q. Did someone prepare a budget that was 14 would have seen the numbers. 15 shown to you that scheduled out costs that were 15 O. You say you could have seen a Sheet that 16 expected to be incurred with the move to your 16 scheduled out things Ire this. 17 separate office space? By you, I Mean DBZ & Go. 17 Do you Feta swing such a sheet? 18 A. No, not that i recall. At that point we 18 A. I dont It was over six years ago now. 19 still were effectively subsidized by Highbridge. I 19 O. When you were here in February, I 20 know we were certainly getting ready to be on our 20 believe you said that you believe by the time Schulte 21 own, but we still, as I said, we were as close to 21 Roth was engaged by the management company. Mild) was 22 them as possible. We still leveraged off of them In 22 Sometime, I think you saidi rougNy n Jute al 23 terms of several non-front office functions. And, 23 2006 — 24 again, up to that point. l it had they had 24 A. Yes. 25 covered Wind of all the overhead. So we wouldn't 25 O. - you were aware ol the management fee Page 446 Page 448 1 have moved - It was their Idea. We didn't ask 10 1 issue and the alrerall purchase issued the early 2 move. We wouldn't have moved if we couldn't have 2 withdrawal management tees and the use of the fund 3 afforded 0. on a stand-alone basis Uwe couldn't 3 towards the plane purchase? 4 have afforded It. We only would have moved had they 4 A. Yes. Again, you can check the then subsidized rt. 5 transcript, I referred to an Gale: meeting where 6 O. So is a your underStanding that 6 David Proshan and Lawrence Cutler came to me first, 7 Highbridge covered either at or a substantial 7 and l feel confident that they talked about the 8 portion of the costs associated with moving to a management lee issue at that time, I think I said 9 separate office space? 9 this. I don't know precis* whether they told me 10 A. I don't know the precise time at which 10 about the advance or the airplane equity Issue then 1 we stopped having subsidization from them. I don't 17 or at the subsequent meeting where they recommended 12 recall the specific time. Around that time. But 12 retaining Schulte. 13 again, this was at their behest for their benefit, 13 0. But by the time Schulte was retained. 14 both not only the physical move but the structural 14 you were aware Cl both issues, coned? 15 one. 15 A. Yos. 16 It was my understanding -- I might have 16 0. Did you ever speak with Gross directly 17 said this before, tea me If I am repeating — there 17 about these issues? Did you ever ask him why 18 was a notion, and again I don't know the mechanics of is management fees were taken earlyc.or why the certain 19 this, that Highbridge had two broker-dealers that 19 funds were used towards Mean purchase? 20 were somehow involved, I believe, In rerY I recall ivie4r 20 A. I dont recall. In the time between 21 convertible bond business, I am not sure why or how. 21 those two meetings. I. might have said I am 22 And that the notion of a spin off was because Ron 22 speculating — 23 Resnick. the general counsel of Highbridge, 23 MR. SIEFERT: Do you remember? 24 specifically said we heed not want us to be a 24 THE WITNESS: I dont nave a specific 25 'supervised' branch ofproker-dealer. I am not sure 25 recollection. 14 (Pages 445 to 445) Diversifi ervices CONFIDENTIAL DZ FTC 00226 EFTA01082359  Daniel B. Zwirn April 7, 2010 Page 449 Page 451 1 A. I maybe said something to the effect 1 A. That I can recall, it wou‘d have been a 2 what is thtS, because I remember hawing II in my 2 team of Schulte lawyers led primanly by Harry Davis 3 mindMiere had been some sort of clerical error in 3 and Mark Elovitz. 4 the junkx part of the department. but I can't tell I 4 O. Was anyone else present when you had 5 said to Perry - I just can't remember. 5 this conversation? 6 Then by the time I did know the facts. 6 A. I don't remember whether it could have 7 you know, we definitely did not speak about It. 7 been multiple conversations. I know there were at 8 O. When you found out about these two 8 least multiple meetings. I think we talked about 9 issues and what they were, were you displeased. were 9 attendance last time but we might not have. But 10 you unhappy? ci depending on the meeting, It included people, 11 A. Yes. 11 including myself. Chris Suan, Vasan Kesavan, Glenn 12 Oi Did you try and find out — again, this 12 Dubin, I think Lawrence Cuter, David Proshan, Mark 13 is just on your own. you personally making inquiries 13 Elovitz, Harry Davis, Holy Weiss. 14 of Gruss or anyone eke in the fiwn — why these 14 MR. MURPHY: Who is Holly Weiss? Is events occurred? 15 THE WITNESS: She Is an employment 16 A. Beyond potentially calling Perry in that 16 partner at Schulte. 17 intervening period, no. Lawrence and Oavid Proshan 17 A. Paul Roth, Fred Ragucci 1e carne to rim they said we have these couple rid Issues. 18 O. Who Is Mr. Ragucci? 19 Andrald it they are issues that came10 US. we are 19 A. He was a management Committee memt>er, 20 going to get to the bottom;,Then t aii came to me in 20 but he was my p!SOnal o primary contact. He was lead 21 Ike May or June and said something to the effect 21 lending partnerndeal person. 22 end again, I don't recall the Specific words ol the 22 BY MR. MURPHY: 23 conversation but the bottom line was that they 23 O. At Schulte? 24 thought they were potential issues and recommended we 29 A. Yes. 25 retain Schulte. 25 O. And the preceding name was? Page 450 Page 452 At that point. I said absolutely. go 1 A. Paul Roth. 2 ahead. And then I did rot -. I was not made aware or 2 Steve Fredman, F.R 3 any finding until the Sunday night at Schuttettrces 3 O. Another Schulte — 4 in September. I believe. 4 A. He ran the fund legal, law few funds 5 And to be clear, the only other thing departmentlund management department 6 for clarity, I was one of the interviewees of 6 BY MR. ALTENBACH: 7 SCI1U808 O. I know in previous testimony where we 8 O. I will preface my next question with I 8 were talking about this roster of attendees at 9 am not asking you for anything that is privileged in 9 meetings. I believe we were talking about the -- 10 your response to the next question but I am going to 10 A. This is preterrnination, to be dear. 11 ask you now. Did you become aware at some point as 11 O. This is preterminatIon of Mr. Gruss? 12 TO why? Did someone give you a mason why the early 12 A. Yes. 13 vAthdrawal of management fees occurred? 13 O. Are these the same meetings where the 14 MR. SIEFERT: Start with yes' or 'no' 19 contents of, if you remember the exhibits we looked as and whether it's a privileged conversation. 15 at last time, the scripts or calls related to 16 Do you have a memory of anybody telling 16 Mr. Gruss's termination and the — 17 you why? 17 A. Well, each of the scripts — 18 A. I have a memory of , es eculatima asoneme418 Mk REYNOLDS: Did you finish the 19 to why but not sayingi they y and that 19 question? 20 conversation would have been a privileged 20 THE WITNESS: sorry. 21 conversation. 21 O. And the calls later in October, both of 22 O. Can you tee me who the conversation was 22 2006? 23 with? Again, I am not asking what the 23 MR. REYNOLDS: You said was this the 24 conversation's contents were, but who gave you the 20 same meeting as. 25 speculation? 25 MR. ALTENBACH: sorry. 15 (Pages 449 to 452) Services CONFIDENTIAL n7 Fr!` nn777 EFTA01082360  Daniel B. Zwirn April 7, 2010 Page 453 Page 455 1 0. You were describing that — we were 1 A. I discussed It with Harold Kahn. 2 talking about you learning of the management fee 2 0. And did the purchase take place? 3 Issue and we were talking about you mentioned it was 3 A. No. 4 privileged and that it could have been at a Meeting 4 0. In early 2006 did you purchase a unit at S with these attendees? 5 50 Central Park South? 6 MR. REYNOLDS: No. When he first 6 A. There was an entity of mine that did. 7 learned about the Issue or the second set of 7 0. Did you own the entity that purchased e questions, maybe I am wrong, with regard to B it? 9 speculation as to why. A. I believe I did or a substantial 10 Those are two separate Issues. 10 majority. MR. ALTENBACH: You are exactly right. 11 O. Did anyone else have an ownership 12 Thank you. 12 interest in an entity that purchased 50 Central Park 13 0. The speculation as to why the management 13 South? 14 fees were withdrawn early, that took place at 14 A. I don't recall. S meetings where you just described attendees, correct? 15 0. Do you know the name of the entity that 16 MR. SIFFERT: He said he didn't 16 purchased50 Central Park South? 17 remember. but you asked who were the attendees al 17 A. Lebo something. LE.S.O. 18 these meetings where it could have happened and these 18 BY MR. MURPHY: 19 were attendees. 19 0. What does that name mean? 20 BY MR. ALTENBACH: 20 A. It's a shorthand term for Mount Lebanon, 21 0. SO It could have been — strike that. 21 my home town In the suburbs of Pittsburgh. 22 A. Just to answer your question, I think 22 BYMR. ALTENBACH: 23 you said, you tel me, is that where you described 23 • 0. Did you provide the capital for this 24 the Iwo scripts and the phone calls, all that was 24 entity, for Lebo? 25 post termination. 25 A. Yes. Or my or management company did Page 454 Page 456 1 0. Okay. 1 win knowledge of my ability to of h to be 2 Just to be clear here, those three 2 advanced effectively against my - the income that 3 things you testified were post termination? 3 was coming to me. That was for equity again, not for 4 MR. SIFFERT: Three things.. 4 the entire purchase. 5 A. The actual defivenrof the message '5 0. You used the tonn just recently for the 6 regarding the two scripts as well as the round of 6 capital flowing Into Lebo: is that correct? 7 phone calls, both what we previously referred to as 7 A. Correct. 8 round one and round two, those four Items were after 8 0. Was there a deposit required for 9 • Perry was terminated. The meetings we were 9 purchase of this unit et SO Central Park South? 10 discussing were before he was terminated but also 10 Quite possible. I just don't recall. 11 included after he was terminated. But in the ones 11 O. Was q unit 33 specifically? 12 alter he was terminated, there were then a growing 12 A. It was second from the top. I don't 13 number of additional potential attendees. 13 14 0. Thank you. 14 0. You don't know the number. 15 Also when you were here in February I IS I am trying to think of an easier way to 16 asked it you ever owned home in Connecticut. 14 refer to if than 50 Central Park South. 17 A. Yes. 17 Do you know what the total purchase 18 0. You answered no. 18 price of the unit al 50 Central Park South was? 19 Did you investigate the purchase of a 19 A. I think h was about 17 million. And, 20 home in Conrtecticut at any point in 2005? 20 again, abotA 510 million was in a non-recourse first 21 A. Yes. 21 mortgage and then 7 million of equity. I think. 22 0. Did you task someone with investigating 22 Rough numbers. 23 the purchase of a home in Connecticut during 2005, 33 O. Other than the S10 mitlion that was 24 someone within D9Z? I don't want to know about 24 provided by the non-recourse mortgage or what wastyou 25 outside. • 25 think was Ste miMon provided by the non-recourse 15 (Pages 453 to 450 Diversifi ervices CONFIDENTIAL 132 FTC 00228 EFTA01082361  Daniel B. Zwirn April 7, 2010 Page 457 Page 459 1 mortgage, do you know where the other funds towards O. Ora unit at 50 Central Park South? 2 the purchase came from? 2 A. No. 3 A. I betleve from the management company. 3 O. Can yoU tell me why that is? 4 O. Do you know how much irom the management A. It was demolished. 5 company? O. Was It demolished in preparation for 6 A. 7 million. 6 your eventual occupation and residence there? 7 O. Do you know when the 7 mfilion was taken 7 A. Yes. a from the management company? a O. Did you ever move in to SO Central Park 9 A. No. It's a process guile Sirniar to the South? 10 one we talked about with the aira nNich was I 10 k -No. 11 worked with Harold to ascertain that it was possible. 11 O. Why did you not move into 50 Central 12 feasible and adequately, per his recommendation, 12 Park South as your residence? 13 papered Ina proper way. 13 A. Again, as I mentioned before, we had 14 And a key point, like the other issue, 14 substantial additional costs resulting from these 15 was that it was non-recourse financing. IS activities and — 16 O. Do you know tl the management company 16 MR. SIFFERT: 'These activities' 17 secured an ad:littoral 510 million loan in March of 17 meaning? 18 20067 11 THE WITNESS: Perrys and assoclated3' 19 A. Additional? I am not sure what you 19 Wise Iff`cfrt.°°1 20 mean. 20 BY MR. ALTENBACH: 21 0. Strike the word additional. 21. O. 'We' meaning who? 22 DM the management company obtain, to 22 A. The management company well, what I 23 your knowledge, a $10 million loan in March of 2006? 23 perceive to be the management company. It turned out 24 A. is that the Citibank one that we have 24 ka be me. 25 already discussed that you mean? 25 MR. SIFFERT: What do you mean? Page 458 Page 460 1 Q. I am just asking 1- THE WITNESS: Well, basically I 2 A. That's the only one I can re-ase 2 cowed 3 0. 1 am just asking whether you know a the 3 MR. SIFFERT: Personally? 4 management company obtained a SID million loan In 4 THE WITNESS: I personally covered s March of 2006? 5 Crete's piece of this, Chris Suan's piece of this, 6 A, I recall the $10 million Citibank 6 Vasan Kesavan's piece of this, obviously Perry's 7 management company loan that we previously discussed. piece of this, and more than covered Glorts piece. Whether — the precise date it came, I recap. a His actual contritxrtIon to this was negative, he took 9 am not sure II what you are referring to is a distribution when capital account was negative. 20 that or not. 10 BY MR. ALTENBACH: 11 O. Did Mr. Kahn apprise you of when the 11 O. Just so we are clear, when you say you 12 balance of the payments. the 7 mason in equity of 12 covered it, It is from your interest in the 13 the payments were made towards the purchase of the 13 management company, not from your personal Interest 14 condo? 14 am I understanding that correctly? 15 A I have no recollection of that, of the 15 MR. SIFFERT: What's the differences? 16 conversation. It would not surpnse me 4 he did 16 MR. ALTENBACH: Well, you have other 17 It would have been within the context of something he 17 investments, interestrotriskle the financial company. 1Et wottid have kept me abreast 01. 18 A. it was from income from the management 19 O. When I say apprised you, whenl use the 19 company as well as previously - es well as tens of 0 word conversation, I also mean e-maa? 20 millions of dollars, and we can get the figure for 21 A. I took it that way. 21 you,