(Breach of Fiduciary Duty)  Against B&P and Chaitman LLP   (Breach of Contract)  Against B&P and Chaitman LLP   (Unjust Enrichment)  Against B&P and Chaitman LLP   20.  FSPT brings this action as a class action pursuant to Federal Rules of Civil  Procedure 23(a) and 23(b)(3) on behalf of all persons who were represented by and paid legal fees  to B&P and/or Chaitman LLP in connection with the BLMIS liquidation litigation.  Excluded from  the class are defendants, members of the immediate family of each defendant, any firm, trust, or  corporation in which defendants or any of their officers, directors, managers, or employees have a  controlling interest or which is related or affiliated with any defendant, and the legal  representatives, assigns, agents, affiliates, and heirs of any such excluded party.   22.  FSPT will fairly and adequately represent and protect the interests of proposed class  members.  FSPT has retained competent counsel experienced in class action litigation to further  such protection and to prosecute this action in the best interest of the class.   23.  Plaintiff’s claims are typical of the claims of those held by other proposed class  members because Plaintiff’s and class members’ damages and entitlement to equitable relief arise  from and were caused by the course of conduct complained of herein.  FSPT does not have any  interests adverse to, or in conflict with, members of the proposed class with respect to the instant  action.   25.  A class action is superior to other available methods for the fair and efficient  adjudication of this controversy.  FSPT knows of no difficulty that will be encountered in the  management of this litigation that would preclude its maintenance as a class action.   26.  In late 2008, as the global financial crisis began to shake the foundations of the  world economy, a fraud of unfathomable scope was uncovered.  Bernard L. Madoff, the principal  of BLMIS, revealed that his company’s long run of apparent investment success was, in fact, a  gargantuan Ponzi scheme.  That revelation set off a chain of events leading to the actions described  in this complaint.   27.  For several years prior to the discovery of the fraud, BLMIS attracted numerous  investors and billions of dollars of assets, primarily due to its apparent success.  That success was  fictional.  Rather than invest customer funds in his purported “split-strike conversion” investment  scheme, Madoff simply used funds from new investors to pay off old ones, generating fraudulent  account statements and trading documents along the way.    29.  Meanwhile, BLMIS clients, including Plaintiff and members of the proposed class,  suddenly found their life savings embroiled in litigation designed to clean up the mess.  B. BLMIS Liquidation Proceedings and Litigation   30.  Shortly after the revelation of Madoff’s fraud, the government stepped in,  appointing Irving Picard as the trustee for the liquidation of BLMIS pursuant to the Securities  Investor Protection Act (“SIPA”).  Among other things, Mr. Picard was charged with determining  each customer’s “net equity” in BLMIS as required by SIPA—in other words, the amount of the  liquidated BLMIS assets to which each customer was entitled.   31.  Mr. Picard determined that BLMIS clients' net equity by the "net investment  method" by which each customer's deposits were assessed against that customer's withdrawals.   That method created two classes of customers.  On one hand were "net winners," or those who had  received more from BLMIS then they had invested.  On the other were "net losers," or those who  had invested more than they had received.  The Second Circuit approved of the trustee's  methodology in 2011.  See In re Bernard L. Madoff Inv. Securities LLC, 654 F.3d 229 (2d Cir.  2011).     32.  On determination of “net equity” vis-à-vis BLMIS set the stage for Mr. Picard’s  next stage of litigation: attempting to make all BLMIS customers as close to whole as possible.   That process necessitated seeking money from “net winners” to provide payments to “net losers”  such that the two groups would equalize as close as possible to whole.    34.  In addition, some investors in BLMIS argue that, with respect to at least some of  their profits, they are neither “net winners” nor “net losers” because their investments occurred  before Madoff converted BLMIS to a Ponzi scheme.  These “early investors” claim that Mr.  Madoff’s scheme operated as a legitimate trading operation at the time they invested, and only  later became a Ponzi scheme.  Thus, the “early investors” assert that their pre-Ponzi profits are not  part of the BLMIS liquidation proceedings and not subject to clawbacks by the trustee.  C. Defendants’ Representation of FSPT and Members of the Proposed Class   35.  From the time of Madoff’s arrest until 2015, Chaitman agreed to represent, and in  fact did represent, both net winners and net losers at B&P.  During this time, Chaitman represented  net winners on an hourly-fee basis and she represented net losers on a contingency fee basis.   36.  In 2015, Chaitman formed Chaitman LLP.  Since then, she has continued to agree  to represent, and in fact has represented, both net winners and net losers.  She has continued to  represent net winners on an hourly-fee basis and net losers on a contingency fee basis.   37.  On information and belief, from the time of Madoff’s arrest until 2015, while at  B&P, Chaitman agreed to represent, and in fact did represent, early investors on an hourly basis.   38.  On information and belief, since founding Chaitman LLP and leaving B&P,  Chaitman agreed to represent, and in fact did represent, early investors on an hourly basis.   39.  FSPT first retained Chaitman at B&P in or around February 2011.  FSPT reaffirmed  Chaitman’s representation in 2015 when Chaitman left B&P and formed Chaitman LLP.  At all  times, Chaitman charged FSPT hourly fees for her services.   41.  Chaitman similarly represented, and continues to represent, members of the  Proposed Class while at Chaitman LLP from 2015 to date.  42.  FSPT restates and incorporates by reference each of the foregoing paragraphs.    43.  This count states a claim for breach of contract by FSPT and members of the  proposed class against Defendants.   44.  As lawyers for FSPT and members of the proposed class, Defendants owed them  fiduciary duties, including the duty of loyalty.   45.  Defendants breached their duty of loyalty to FSPT and members of the proposed  class because Chaitman simultaneously represented other clients with interests directly adverse to  FSPT and members of the proposed class.   46.  Defendants further breached their duty of loyalty to FSPT and members of the  proposed class because Chaitman herself was a net loser and therefore stood to benefit in an  amount directly correlated to the amount Mr. Picard clawed back from her net winner clients.   47.   FSPT and the members of the proposed class therefore are entitled to recover from  B&P and Chaitman LLP all compensatory damages caused by Defendants’ breaches of their  fiduciary duty.   49.  FSPT restates and incorporates by reference each of the foregoing paragraphs.   50.  This count states a claim for breach of contract by FSPT and members of the  proposed class against Defendants.   51.  As alleged herein, FSPT and each of the members of the proposed class engaged  Defendants pursuant to an agreement whereby FSPT and each of the members of the proposed  class promised to pay Defendants an hourly fee in exchange for Chaitman performing services that  were necessary and in the best interests of FSPT and members of the proposed class.   52.  Defendants breached their contracts with FSPT and members of proposed class by  billing them for services that were not necessary or in their best interests.   53.  FSPT and the members of the proposed class therefore pray that the Court order  disgorgement and restitution of any and all attorneys’ fees paid to B&P and Chaitman LLP by  FSPT or members of the proposed class.  55.  This count states a claim for unjust enrichment by FSPT and members of the  proposed class against Defendants.    56.  As alleged herein, Defendants were enriched by FSPT and members of the  proposed class in the form of fees paid for legal services, including, but not limited to, hourly fees,  retainers, and contingency fees.   57.  The enrichment of Defendants as alleged was at the expense of FSPT and members  of the proposed class.    58.  Equity and good conscience do not permit Defendants to retain the enrichment they  received at the expense of FSPT and members of the proposed class.  As alleged herein, the  attorney-client relationships formed between FSPT and members of the proposed class on the one  hand and Defendants on the other were improperly and irrevocably tainted by non-waivable  conflicts.   59.  Defendants also, as alleged herein, billed and were paid for needless and quixotic  legal work, ostensibly for the benefit of FSPT and members of the proposed class, but which in  reality only benefitted Defendants in the form of increased fees.   60.  FSPT and the members of the proposed class therefore pray that the Court order  disgorgement and restitution of any and all attorneys’ fees paid to B&P and Chaitman LLP by  FSPT or members of the proposed class.  A. Bernard Madoff’s Ponzi Scheme and Its Collapse  